DeFi has long been limited by the absence of robust credit solutions—especially ones that would allow protocols to use real-world financial data to help inform on-chain lending decisions, like collateral amounts. Traditionally, DeFi protocols have applied global collateral requirements and LTV ratios to all users, regardless of deposit or borrow amounts.
Today, Zeru is proud to announce the integration of Reclaim Protocol’s zero-knowledge Transport Layer Security (zkTLS) tech. This collaboration enables users to securely, privately bring their real-world credit scores on-chain, associated with their wallet, accelerating the path to under-collateralized loans and expanding financial access.
Why Real-World Credit Scores Matter in DeFi
Relying on over-collateralization has meant users need to lock up more assets than they borrow. While this reduces risk for lenders, it has been highly restrictive—especially for those who have good credit histories in the traditional financial system, but lack substantial crypto collateral. By incorporating real-world credit scores, Zeru aims to lower collateral requirements for responsible users, making under-collateralized, and eventually zero-collateralized, lending a reality.
Why We Chose Reclaim Protocol
Reclaim Protocol is a privacy-preserving middleware that empowers Web3 dApps and protocols to tap into verifiable real-world data, like credit scores or financial documents, without exposing sensitive information onchain. It focuses on consent-based data sharing, ensuring users always control what data is shared and how.
At the heart of Reclaim Protocol’s solution is zkTLS, a cutting-edge approach to secure data transport. Similar to the way standard TLS (Transport Layer Security) encrypts internet traffic, zkTLS incorporates zero-knowledge proofs to ensure both privacy and authenticity. This means:
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Encryption: Data (e.g., credit score details) is encrypted in transit so no unauthorized party can see it.
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Verification Without Exposure: A zero-knowledge proof (ZKP) confirms the data’s validity without revealing the actual content, so your personal credit details remain hidden.
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Trustless Integration: The proof is published onchain, allowing smart contracts to verify it without relying on a centralized authority.
While only Experian scores are pulled onchain today, in the future, to enable a more robust decentralized credit system, Zeru could enable users to claim real-world data points from other credit scoring companies like TransUnion and Equifax, buy now-pay later providers Klarna and Affirm, wireless carriers that extend credit for post-paid plans and discounted devices, and more.
This integration process for Zeru has been smooth and quick thanks to Reclaim’s extensive data provider network of more than 1000 integrations, cross-platform SDK support, and lack of user-side installations required (no apps or browser extensions). This will enable Zeru to easily add existing data sources to its AI model, train on them, iterate, and make the data available as Reclaim adds new, relevant data sources. This ease of access to existing and new data sources is a key reason for choosing Reclaim over other protocols.
Learn more about Reclaim Protocol by reviewing their docs.
How Zeru + Reclaim Advances Under-Collateralized Loans
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Easy Credit Score Verification: By seamlessly verifying real-world creditworthiness through Reclaim’s zkTLS, Zeru can add this data to our AI model to help gauge a user’s ability to repay without requiring over-collateralization, in addition to onchain behavior already being analyzed..
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Privacy Guaranteed: Users never need to disclose their full credit report onchain; they only share a ZKP of their credit score and its validity.
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More Inclusive Lending: Lending platforms can allow users with good real-world credit scores to access lower collateral requirements, or potentially no collateral at all, broadening DeFi access.
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Reduced Risk for Lenders: While the system maintains user privacy, lenders benefit from an additional layer of assurance that borrowers are creditworthy, building trust in under-collateralized lending and allowing them to increase LTV where possible.
Looking Ahead
With Zeru and Reclaim Protocol’s zkTLS integration, we are one step closer to a DeFi ecosystem where real-world creditworthiness smoothly translates into onchain lending opportunities. This collaboration not only lowers barriers to entry but also preserves the core DeFi principle of trustlessness, opening the doors for millions of individuals who have solid credit histories but limited crypto assets.
Have questions or want to learn more? Stay tuned for our upcoming community calls, blog posts, and other opportunities to hear from Zeru’s team where we will dive deeper into the technical and strategic aspects of this integration, and others. In the meantime, check your zScore and explore Zeru’s incentivized testnet on Berachain bArtio and Base Sepolia to see how under-collateralized loans can become a game-changer for you—and DeFi at large.
