The onchain credit stacks. Most DeFi lending still requires users to deposit more collateral than they borrow. That is useful for leverage, but it is not real credit. Previous models removed collateral without building sufficient systems for identity, credit history and enforcement. The defaults experienced by early onchain lenders showed why those functions cannot be skipped. I now divide the onchain credit stack into 3 layers: identity → trust record → recourse [1] Identity A lender first needs to determine whether the borrower is a real, unique and accountable person or business. Projects I’m watching here: – @worldnetwork provides privacy-preserving proof that a borrower is a unique human. – @privy_io introduces wallet based on your social ID. – @DivineResearch uses World ID inside World App to issue small unsecured loans through progressive trust. – @PrivadoID allows borrowers to prove specific identity or financial attributes without publicly exposing the underlying data. Divine is currently the clearest example of identity being converted into credit. Borrowers start with a small limit and unlock more capital through successful repayments, eventually reaching up to $1,000. I like this model because it limits initial exposure while producing real repayment data. However, identity only tells a lender who is borrowing. It does not prove that the borrower will repay or provide a recovery path after default. [2] Trust records The next layer converts historical behavior into a measurable risk signal. Projects I’m watching: – @ethos_network builds reputation from reviews, vouches, slashing and staked ETH. – @credifi uses Ethos scores to offer loans of up to $3,000 without collateral. – @ChainAware combines credit history with wallet behavior, fraud probability and risk classifications. This is where onchain data becomes financially useful. A wallet’s age, repayment behavior, liquidation history and counterparties can help lenders price risk instead of applying the same collateral requirement to everyone. I find Ethos particularly interesting because reputation providers also put capital and credibility at risk. But a score is still a prediction. It can improve underwriting, while offering limited protection when a borrower actually defaults. [3] Recourse and structured credit This layer defines who owns the claim, who absorbs losses and how lenders recover capital. Projects I’m watching: – @3janexyz connects stablecoin capital with fintech originators, SPVs, loan servicing, tranching and licensed collections. – @humafinance finances payment and receivable flows using onchain liquidity and offchain underwriting. – @centrifuge provides infrastructure for compliant tokenized funds and real-world credit assets. – @maplefinance combines onchain lending markets with professional institutional underwriting and transparent loan management. – @goldfinch_fi Prime brings established private-credit funds and senior secured loan exposure onchain. 3Jane is currently the model I find most complete. It offers fintech lenders credit facilities ranging from $5M to $200M and recently completed an approximately $8.5M purchase of SMB credit receivables. The financial structure is clear: → stablecoins provide capital → fintechs originate and service loans → SPVs hold the legal assets → tranches allocate losses → collections provide enforcement It is less crypto-native than pure wallet-based lending, but I think it currently has the strongest path toward scale. A functional credit market needs these systems to connect. I think onchain lending can expand beyond collateralized crypto leverage and become a real credit market.