Coinbase CEO Brian Armstrong said onchain reputation will replace traditional credit scores, citing the FICO score used in 90% of major US lending decisions. Onchain credit still relies heavily on collateral, with crypto lending declining 17% to $56.16 billion in the second quarter according to Galaxy Research. New solutions address blockchain anonymity, such as Ethos Network which ranks wallets through peer vouches from other users. Credifi, the app mentioned by Base creator Jesse Pollak, offers unsecured loans of up to $3,000 based on a score of 1,800. Default rates in the coming months will determine whether onchain reputation can accurately price real credit risk.
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