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A New Product Aims To Disrupt Free Credit Scores With Blockchain Technology A product team was assembled by Zoracles Protocol to map out a decentralized and confidential approach to receiving credit scores

By Annie Clan

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In this era of uncertainty and rapid advancements entrepreneurs need to build the focus on their credit scores, which depict their credit-worthiness and help determine the short-term and long-term financial help that they may seek from the organised sector. Free credit scores have been the foundation of an industry led by incumbents Credit Karma, Experian and Equifax. Usually most of the people don't pay attention towards their credit scores and there are many who are not aware about what exactly a credit score is. As per Investopedia, a credit score is a statistical value or number which helps the lending parties to evaluate the creditworthiness of their customers based on their previous credit history. The pitch is simple, register and sign up on their website to receive your credit score that is currently reported by the major credit agencies.

Consumers are then given opportunities to increase their score with ancillary products and services provided by Credit Karma partners like banks and lenders. They believe everyone wins if you sign up for a new credit card or create a new loan on their platform.

This model is very similar to the lead generation funnel perfected by Nerd Wallet. Most of Nerd Wallet's traffic is derived from high search result placement in Google. The company would then provide valuable content comparing different credit card offers and get a commission for each offer it referred to a partner.

This practice was made popular with the Internet affiliate marketing boom that exploded in value when consumers began spending more and more time online. According to Statista, affiliate marketing in the US should gross over $8.2 billion by 2020. This is more than a 300 per cent increase in value from just 10 years ago. The natural incentive for companies such as Credit Karma and Nerd Wallet is to maximize revenue by pushing more and more offers to their customer base. This can lead to dissatisfied users that are opening their dashboard to pop-ups or new advertisements every day.

Zoracles sets out to solve and minimize consumer frustration with free credit scores by building a very minimalist interface that uses back-end oracle data feeds to aggregate the main credit reporting agency data into an ad-free dashboard.

The innovative approach by Zoracles Protocol will be displayed in a new product they are calling – Confidential Credit Checks. This new product would compliment their initial exchange data service that was launched in August and focused on building private crypto asset prices to smart contracts.

Zoracles Protocol initial debut to the cryptocurrency community was a price feed that leveraged Open Oracle to retrieve crypto asset prices for strategic partners in blockchain decentralized finance (DeFi). Price feeds will remain an area of interest for Zoracles, but confidential credit checks appear to be a lucrative market vertical ripe for disruption evidenced by Credit Karma's acquisition totaling $7.1 billion by Intuit earlier in the year.

Much like price feeds, plans to offer their data for free. Most oracle projects charge per API data request while the ethos of the Zoracles community has always been to provide a valuable service for end users without burdening them with additional expenses. Blockchain technology is still in its infancy, so it is imperative to lower the bar for adoption and keep on-boarding friction to a minimum.

The foundation of Zoracles Protocol that differentiates the project from other decentralized finance projects is its use of cutting-edge privacy technologies centered around zero-knowledge proofs. Those familiar with these privacy-preserving techniques were most likely introduced to these concepts by the team at Electric Coin Company who are responsible for the zero-knowledge proofs developed for the privacy cryptocurrency Zcash.

Zoracles will build Zk-Snarks that are activated when pulling consumer credit scores yet hiding their values as they are brought onto the blockchain. This is accomplished with a verification proof derived from the ZoKrates toolbox. Keeping the data confidential is critical to ensure confidence from users to have their data available on-chain. It can be compared to using https (SSL) to transmit credit card data that allowed eCommerce to flourish.

A very interesting long-term goal of is to eventually use credit score verification to prove identity. The implications are enormous for the usefulness of their protocol if it can become the market leader in decentralized identity. The team is focused on building the underlying API infrastructure as well as a front-end user experience. If executed successfully, it is very similar to the product offering of Twilio. The "Platform as a Service" could go well with Zoracles "Snarks as a Service." One should watch this project closely.

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