You're asking about undercollatorized loans on chain? It's not a solved problem but there's progress. See this survey of approaches of loans on chain. [1] Last

You're asking about undercollatorized loans on chain? It's not a solved problem but there's progress. See this survey of approaches of loans on chain. [1] Last year for the ETHOnline hackathon, I made an app that allows anyone to request a loan in any erc20 token with (optional) collateral in any set of erc20s. In addition, the borrower identity is used to increase confidence: a linked Lens profile and/or verified passport using Coinpassport. The principal is then crowdfunded. [2] While making this, I learned that Aave was originally called ETHLend and followed a similar model of requesting individual loans but this approach makes it difficult to attract liquidity so when they developed over-collateralized pools, the protocol became much more popular. It's going to take better identity tools than we currently have. Of course, undercollatorized lending is the basis of traditional banking so replicating it on chain is a massive win for the ecosystem. There's a few projects working on credit scores on chain: Sprectral [3] and Cred protocol. See this article about using Cred protocol [4] [1] https://jumpcrypto.com/writing/paradigms-for-on-chain-credit/ https://jumpcrypto.com/writing/paradigms-for-on-chain-credit... [2] https://ethglobal.com/showcase/lwned-75x0f https://ethglobal.com/showcase/lwned-75x0f [3] https://www.spectral.finance/ https://www.spectral.finance/ [4] https://medium.com/chelo-finance/chelo-tech-guide-2-uncollateralized-loans-ece48666d07 https://medium.com/chelo-finance/chelo-tech-guide-2-uncollat...