In a groundbreaking move within the cryptocurrency lending space, San Francisco-based Divine Research has embarked on an ambitious venture, offering thousands of unsecured loans to individuals around the globe. But the twist? Instead of relying on conventional identification methods, Divine uses cutting-edge iris scanning technology to verify borrowers’ identities. This approach not only challenges traditional lending paradigms but also aims to empower those often overlooked by conventional banks.
According to a recent report by the Financial Times, Divine has successfully issued around 30,000 short-term loans since its inception in December. These loans, mostly under $1,000, are disbursed in USDC, a stablecoin pegged to the US dollar and issued by Circle. This innovative lending model is particularly aimed at individuals in developing economies, where access to credit is severely limited. As Divine’s founder, Diego Estevez, eloquently stated, “We’re loaning to average folks like high-school teachers, fruit vendors… basically anyone with access to the internet.” He dubbed it “microfinance on steroids,” illustrating the company’s ambition to revolutionize access to financial services.
Crypto lenders dial up risk with ‘microfinance on steroids’ https://t.co/6GgzJZROtm— Financial Times (@FT) July 27, 2025
In their early trials, Divine has launched operations in inflation-stricken Argentina. Here, the traditional banking system often falls short, making access to stable, dollar-backed credit a lifeline for many. All borrowers are required to scan their iris through a World ID orb, designed by the Worldcoin initiative, which not only facilitates identity verification but also serves to curb defaults. By preventing users from borrowing simultaneously under different identities, the system enhances accountability.
However, the challenge of defaults remains. Estevez candidly admits that first-time loan default rates hover around a staggering 40%. To manage this risk, Divine employs fixed interest rates ranging between 20% to 30%, coupled with reclaimable Worldcoin tokens, which provide a buffer against any losses incurred. Estevez emphasizes the importance of ensuring profit margins for liquidity providers, stating, “We’ve engineered the system such that after accounting for default rates and the [interest] rates on offer, providers will always make a profit.” This combination of creativity and strategy could signal a step forward for unsecured lending in a landscape often fraught with uncertainty.
As Divine emerges as a key player in this sector, it’s essential to consider how its model compares to the broader crypto lending market, which took a significant hit during the 2022 crash. Major lenders like Celsius and Genesis faced devastating collapses, leaving many retail investors without access to their funds. The repercussions were profound—Celsius’s CEO was sentenced to 12 years in prison for securities fraud, and Genesis paid a hefty $2 billion to settle investor fraud allegations. In the aftermath, the crypto lending scene has struggled to regain its footing.
Meanwhile, Divine is not alone in exploring unsecured loans. Platforms like 3Jane, supported by the crypto investment firm Paradigm, have begun issuing uncollateralized USDC loans on the Ethereum blockchain. Though they require borrowers to provide proof of bank or crypto assets, they do not demand collateral. Defaulted loans are then sold to US debt collectors, and the company is venturing into AI-driven lending agents to streamline repayment processes, aiming to mitigate risk.
Despite still being a niche in the vast multibillion-dollar crypto lending sector, unsecured loans are capturing the attention of investors eager for new opportunities. While heavyweight players such as Coinbase and Tether continue to dominate with collateralized loans, the cautious entry of traditional financial institutions like Cantor Fitzgerald into the bitcoin-backed financing space indicates a growing interest.
As Divine Research pioneers a bold new path through biometric verification and a focus on small global borrowers, the question remains: can this innovative approach create a sustainable model for unsecured crypto loans, especially in a marketplace still reeling from past mistakes? With the combination of technological advancements and a commitment to serving underserved communities, Divine may very well be on the brink of something transformative.
As we continue to witness the evolution of financial services through the lens of cryptocurrency, all eyes will be on how Divine and its contemporaries navigate the complexities and risks of this dynamic environment. For now, the future of unsecured crypto lending looks intriguing, driven by a vision of accessibility and empowerment.
To stay updated on emerging trends and developments in the cryptocurrency landscape, be sure to follow our coverage and insights!