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DeFi and Credit Risk

Coinbase Launches Innovative Crypto Lending Solution Targeting Institutional Investors

Credora, a company offering institutional credit infrastructure that bridges the gap between centralized and decentralized finance (DeFi), has successfully secured $6 million in a strategic funding round with notable investors including S&P Global and Coinbase Ventures. The raised funds will be allocated towards the expansion of the company's technology and the enhancement of Credora's private computation technology, which is utilized to assess and oversee borrowers.

The New York-based company has noted that borrowers are increasingly reluctant to share sensitive information, leading lenders to rely on reputation and personal relationships as the primary criteria for extending credit. However, this non-transparent lending model has shown vulnerabilities, with the collapse of several centralized lenders, including Genesis (a sister company of CoinDesk), Celsius Network, and Voyager Digital, which collectively took out billions of dollars from their clients' capital.

“Credora solves the information asymmetry problem by using private computation techniques on real-time data, ensuring borrowers continuously validate their creditworthiness while maintaining the privacy of their sensitive information," CEO Darshan Vaidya said in a statement. "Credora’s technology helps create more transparent and open lending markets built on robust underwriting standards.”

Credora, established in 2019, specializes in offering lending infrastructure and a credit ratings system customized for private credit markets. The company boasts of a privacy-preserving technology that enables lenders to make prompt and well-informed decisions without compromising borrowers' confidential information. As per Credora, the company has facilitated loans worth over $1 billion so far.

The funding round saw participation from several other investors, including Spartan, Amber Group, CMT Digital, Hashkey, GSR, KuCoin Ventures, liquidity provider Paradigm.co, Pirata Capital, Breed VC, and WAGMI Ventures. With this round, Credora has now secured a total funding of up to $16 million.