Introducing Egoras — a DeFi Platform for Uncollateralized Micro-Credit

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Introducing Egoras — a DeFi Platform for Uncollateralized Micro-Credit

Jul 17 2021

In brief

  • Egoras is a project that offers uncollateralized micro-credits, opening doors to unbanked entrepreneurs
  • A modern way of taking loans in traditional finance is too complicated and unfair.
  • Banks offer high interest rates and require collateral that people simply can’t match.

Egoras is a young DeFi project that aims to abolish global economic inequality by offering short-term micro-credit to those abandoned by the banks.

For a long time now, people have been taking loans from banks and other financial institutions in order to achieve a number of things. Whether it was to buy a new car, build a home, start a business, or some other reason — you need a lot of money at once, and that is usually the amount that is difficult, if not impossible to save up for by simply deducting a small amount of your regular pay.

So, these financial institutions started offering loans, naturally, with interest, which allows the institutions to earn money by giving money. However, what if the person that took the loan could not afford to pay it back? That was an issue that was quickly solved through collateral. Simply put, a borrower had to offer something that the banks would be able to confiscate in case the terms of the agreement were not met.

For a time, this seemed like a good deal, although not for everyone. A lot of people simply didn’t have anything worth enough money to be used as collateral, or they couldn’t raise a high enough loan, or their credit score in countries like the US wasn’t good enough for the banks to take the risk of giving them money. The DeFi sector changed this by offering loans to anyone, as long as they could provide collateral, but for some, this still wasn’t approachable enough.

Enter Egoras — a brand new DeFi platform that offers uncollateralized loans to anyone who needs them.

What you need to know about Egoras

While it is true that Egoras is ready to offer money without collateral, there is an important detail to note — it can only offer micro-credit. In other words, this is a protocol that provides smaller amounts, but still large enough for small entrepreneurs and enterprises to make use of it.

The project’s goal is to end global economic inequality, one small step at a time. It has identified a number of problems in the sector, including high interest rates, over-indebtedness, as well as over-dependence on mainstream banks. So, it came up with its own string of solutions, including on-chain governance, on-chain treasury system, and non-fungible tokens for collaterals.

The project estimated that there are over two billion people in the world that are unbanked or without any access to financial services to meet even their daily needs. The project plans to help solve this problem by using the unique solutions mentioned above.

In addition to those, it also has its own EGR token, which allows people to buy it and stake it. Those who do so get to approve or decline loans and earn over 12% APR for doing so, which is one of the newest ways to earn passive income through DeFi.

The project itself carefully selects and appraises the loan requirements for every applicant before making the final proposal on the governance protocol, and offering stakers the chance to approve or decline loans. In other words, it is utilizing the power of community, as well as the power of decentralized finance to change the lives of all those who don’t have any other option to turn to.