Quadrata, a passport network bringing the identity and compliance layer to DeFi applications on existing public blockchains, this week launched their Web3 passport. The Quadrata Passport allows network participants to build DeFi applications, expand financial services and leverage the proprietary technology to initially access KYC and AML status and country of residence as well as credit reputation and accredited investor status in the future.
The Quadrata Passport addresses the need for trust through compliance-aware solutions, providing more on-chain data, the company said. DeFi today is permissionless, and regulated financial institutions may be at risk of commingling funds with potential bad actors. The passport can placate institutions because a trusted third party has reviewed the KYC/AML risks. By bringing identity on-chain, the company aims to expand the range of use cases on DeFi while protecting sensitive information.
The company is working with TransUnion to bring an additional layer of reputation to the authentication provided by the passport. TransUnion via Spring Labs, a passport data issuer for Quadrata, will bring the credit data on-chain. This could allow users with good credit across both off-chain and on-chain realms to be rewarded by more efficient access to capital. It also allows DeFi developers to build more differentiated use cases.
“We see tremendous growth potential for institutional DeFi powered by on-chain identity creation rooted in the existing off-chain reputation,” said Fabrice Cheng, co-founder and CEO of Quadrata. “Just as you are able to leverage ‘good behavior’ and a strong reputation in traditional finance to receive access to capital on favorable terms, you should be able to use that same approach on-chain through the Quadrata passport that lends a layer of trust through identity verification.”
“By working with Quadrata to utilize the passport, our customers can now benefit from their strong off-chain credit reputation in an on-chain environment,” said Liz Pagel, senior vice president and consumer lending business leader at TransUnion. “We look forward to being part of the journey of Quadrata and our consumers as they create an identity which can be carried into Web3 through the passport.”
“With the continued evolution of blockchain comes a great need for innovation that will bridge the gap between the off-chain and DeFi environments,” said Kristin Smith, Blockchain Association executive director and Quadrata advisor. “Quadrata is paving the way for on-chain identity and compliance through their passport network.”
The passport is also creating a network of data verifiers, liquidity providers and DeFi developers with a goal to set the standard for institutional DeFi. The passport is live on Rinkeby testnet and will be deployed to mainnet soon.