Hong Kong, China, January 14, 2022: Credit is not only the cornerstone of the market economy, the credit mechanism has also penetrated into every corner of society, and the credit system has also become the basic system for regulating the activities of social entities.
Credit-Individual's Second ID
In social life, people need an identity certificate to reflect individual identity information, including name, gender, nationality, place of residence, family composition and so on. These characteristic tags of the physical world define the identity of an individual. After the government or centralized agency verifies the identity information, it can fulfill the basic needs of social life, such as household registration, school registration, driver's license application, visa for going abroad, bank account opening, loan application, inquiries on credit records, etc., are the manifestations of identity credit composed of the different needs of different centralized institutions for identity information in different application scenarios. Xuexin.com records advanced information records in China, and European and American countries will use WES for authentication; vehicle management offices or DMV records vehicle information records, including driver’s license types, violation information records, etc.; visas and bank account opening require various asset certificates and bills Address, social information record, whether there has been a criminal record, bad credit record, etc.
In the above-mentioned scenes, identity is the identification basis of life scenes, and credit is a pass that is active in different scenes. Honesty, as an important part of human values, is regarded as an important virtue and obligation in social or economic activities. People generally regard credit as important as an individual. Personal credit is like a "second ID card." If there are behaviors such as fraud, debt evasion and manufacturing of fake and shoddy products, these bad records will always be engraved on the individual's label. It is also difficult to gain a foothold in society. Whether it is an individual, a company, a government, or a large country, credit is the foundation of social life and life and it is also a status symbol of whether it can be based on society.
In the economy and society, banks are the most important credit rating agency in the traditional world. Following the new Basel Agreement’s proposal to use external ratings to calculate bank risk assets, it has further affirmed and enhanced the importance of bank ratings. The risk of assessing banks includes credit risk, market risk and other risks. Credit risk is not only an important consideration for banks to assess personal credit scores, but also the core of banks being managed and rated as a centralized institution. In the traditional world, banks mostly play the role of financial intermediary, but in the information age, they have evolved into information intermediaries, providing a source of basic identity and credit information for other social needs. With the advent of the Internet era, the emergence of Alibaba Sesame Credit has promoted the development of the Internet credit system, and has gradually formed a similar "online bank" existence, becoming an independent third-party credit agency through cloud computing, machine learning, etc. Technology objectively presents personal credit status and has provided credit services for users and merchants in hundreds of scenarios such as consumer finance, financial leasing, hotels, renting, travel, marriage and love, classified information, student services and public utility services. Its evaluation criteria include five latitudes of user credit history, behavioral preferences, performance capabilities, identity traits, and personal connections for evaluation and establish data cooperation with public agencies and other partners. Different from traditional credit data, Sesame Credit also covers a series of application scenarios that reflect the characteristics of personal identity information, such as credit card repayment, online shopping, water, electricity and coal payment and social relationships.
Web3.0 Era and the Establishment of Metaverse Credit System
By analyzing a large amount of online transaction and behavior data, we can evaluate users and help companies classify users to provide better services. Users themselves also enjoy the convenience brought by electronic identity and credit, which has become the Web2.0 era.
Jassem Osseiran, the founder of MetaVisa, also as the entrepreneur and advisor in the financial services, believes that In Web3.0, Internet users need an Internet identifier, which can be linked to any software and practical scenarios. At the same time, information can be stored on the blockchain network to ensure that the information is not tampered with and proves personal achievements, time-stamped permanent authenticity of assets, interests, activities, etc.
In the Web1.0 era, people only need to ingest information and don't need to participate. Web2.0 has become a two-way Internet. Through "temporary" personal network files, information and content can be released, which has better interactivity and requires greater audience participation. The network has become more abstract and expandable. By the time of Web3.0, decentralized identity is not short-lived. People have the right to establish and maintain permanent identities online. Content posted online will be permanently linked to themselves. These public historical records prove the existence of a certain scene and time. It is more abstract and requires higher audience participation. We need to keep our wallets, private keys, assets, and use applications in different scenarios.
Jassem indicates that Web3.0 should be granular and composable for data and content, and it requires a higher audience to participate in the abstract formation. Before this, our expressions were complete and concrete. All users, content, data and thermal media are stored in applications. Each application is an isolated island of information, which is largely fragmented. Access procedures between applications require separate applications. It concretely defines completeness, but the audience participation is low. In Web3.0, content and data should be arranged in an open space. Applications are granular and permissions can be combined with each other. Any application can access each other and form a cold medium. You can use your imagination at will. Everyone is right. The presentation of the same content can have different definitions. This is also the Vision of MetaVisa to achieve the accomplishment in the future.
The premise of Web3.0 is that users have a unique and permanent Internet identity. As part of a decentralized identity, everyone has a unique, open and accessible history. The behaviors and achievements of the material world under the chain can be displayed on the chain and people's creation, contribution, assets and collections possessed on the Internet also reflect their preferences, experiences and achievements. People will be closer to the operation in the material world, but they can use it at will in the network world and they are all related to themselves, not belonging to the platform. Extending to various fields and application scenarios, decentralized identity can be used as the basis for realizing network native credit scoring and the credit value on the chain will be more cautious and strict, because it will affect your future credit mark. It can't help carrying people's online personality and identity information and at the same time is the credibility foundation of the online world.
Driven by the development of a decentralized identity, the construction of a credit system is also necessary. MetaVisa, as the middle layer protocol of Layer-3, founded by Jassem Osseiran and co-founded by Silent Unicorn, the technology advisory firm, helps users establish and display reliable identity and credit records on the chain by analyzing blockchain data. Based on blockchain data, the use of cloud computing, machine learning technology and model algorithms such as decision trees and random forests, five latitudes of credit history, asset portfolio, on-chain behavior preferences, wallet address activity level and address relevance have been established.
As for Asset Portfolio, the higher the asset holding of an address, the higher its credit rating should be. Therefore, in the credit sub-system, asset holdings should be an important factor. An address account may have various ERC standards and different types of tokens, and the number and value of tokens in the address account will change over time.
The interaction between the account address and different types of applications on the chain can reflect the interests and preferences of the account, and can also be used as the basis for calculating the credit rating of the account address. Consider the two sub-fields of DeFi and NFT, which are currently highly engaged and count users' on-chain interaction behaviors in these two fields respectively.
In DeFi, deposit, borrow and liquidity pool position can reflect the user's total asset value TVL (Total Value Locked) on the DeFi platform; Deposit, Borrow, Swap and Liquidity Pool Position correspond to all four interactive behaviors. TXN (deposit and withdraw corresponding to deposit, borrow and repay corresponding to borrow, increase and decrease corresponding to swap and liquidity pool position) can reflect the user's activity level on the DeFi platform. Similar to the aforementioned "address activity level" and "holding assets," the total asset value and activity level both take the time effect into account in the exponential moving average method. The weighted addition of the two will obtain the account address's value in the DeFi field.
In NFT field, by counting the value of all NFT assets held by the account address (based on the latest transaction price), the total value of the NFT assets of the account address can be obtained. By counting the above interactive behaviors, it can reflect the user's activity level on the NFT platform. The aforementioned "address activity level" and "holding assets" are similar. Both the total value of NFT assets and the activity level take the time effect into account in the exponential moving average method and the two are weighted and added to obtain the account address's participation in the NFT field.
Address Active Level is evaluated based on the number of successful TXN's. Intuitively, the higher the frequency of TXN, the closer to the calculation time point, the more active the address should be. Based on this principle, an exponential moving average method is used to evaluate the activity of an address.
Many considerations are needed to improve the credit rating system. With reference to the case of the physical world, in Sweden, if the mobile phone arrears is not paid and is dunning more than twice, in addition to being shut down, you will receive court flyers and your name will be recorded. You may not be able to apply for any mobile phone network in the future. Loans will also become difficult; in Finland, consciously buying tickets, but if someone spot checks and finds evasion, they will be blacklisted, which will have a great impact on personal life and work in the future; in the Nordic region, once a company appears Bad credit records, these untrustworthy information will be disseminated in the society, from the dishonest person's dishonesty to the transaction party to the dishonesty of the whole society; once German companies and individuals have dishonest behavior, the bank will not grant loans, and individuals are not allowed to go abroad. If the impact of these social behaviors on credit is mapped to the chain, everyone will treat their credit more cautiously, because the convenience and preferential treatment brought by good credit is incomparable.
As far as the current meta-universe or blockchain credit system technology is concerned, the more standardized data sources are the holdings of assets, asset types, active frequencies, product trends, etc. of addresses. How to map off-chain experience to on-chain data to form personal identity information and credit labels is currently the biggest challenge. This is also an important introduction of how to make decentralized identities practical, such as personal achievements, creative contributions, academic diplomas, etc. And many companies are now responding to this challenge. Violet is committed to verifying personal identity information off-chain on the chain; 0xStation allows users to record their professional achievements on the chain; Koodos allows a variety of on-chain relationships and can transform any content on the Internet into a customizable NFT . These granular data can be used as the data source of MetaVisa or any identity credit system developer. Through the classification of these data, they can be identified to create personal unique credit badges. These badges can not only be added to the data on the chain, It is also an important credit symbol that prevails in the world of the meta universe.
In addition to collecting, obtaining, and organizing metadata, a complete information system is needed to facilitate the reading and evaluation of data. The data model and standards for managing goodwill are also a great challenge to whether decentralized identities can be mainstreamed. The subjective and complex background information behind the identity, objective credit evaluation, information data security protection, access to credit information sources on the chain, and the diversified data requirements of the credit system all promote the realization of Web3.0 and the meta-universe system fundamentally.
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