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Teller Aims To Decollateralize DeFi

Jan 28, 2021 · 4 min read

By Ashwath Balakrishnan

Teller is a credit risk protocol that uses bank/CeFi data to enable undercollateralized loans on DeFi money markets. The core products here are Teller’s credit risk assessment algorithm – which inputs a user’s existing credit history and financial data to decide the terms of their loan – and the protocol’s proprietary liquidity pools.

Unsecured lending is perhaps the least penetrated vertical in all of DeFi. Aave and Compound, the top DeFi debt markets, facilitate trustless loans. Loans on these platforms have to be over-collateralized by borrowers, reducing capital efficiency in exchange for mitigating insolvency risk.

With Teller, users can enjoy the composability of DeFi and the efficiency of TradFi. A user can port their financial history from their bank and use it to obtain a loan on Ethereum. This process would entail doxxing oneself but enables low-collateral or collateral-free loans.

Teller will manage its own liquidity pools, which are called

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