Spectral Finance is on-chain credit scoring system and novel collateral subsidization model, to solving undercollateralized loans in DeFi without doxing a user’s identity while incorporating practical recourse measures. Spectral Finance benefits from the first-mover advantage. They are aiming to tackle on-chain credit assessments and undercollateralized lending primarily on-chain and without doxing their users. Spectral Finance is developing a — first-of-its-kind — credit risk oracle and loan underwriter that will serve as a middleware solution for the entire DeFi ecosystem, namely the credit markets. The credit ratings generated by Spectral will determine the amount of collateral required by a user. Spectral’s credit ratings are determined by three factors: On-chain financial history in DeFi Credit delegation by other users Off-chain data points (optional) Empowered by Spectral, borrowers will now be able to purchase under-collateralized loans from leading DeFi protocols such as Aave or Compound. By doing so, Spectral leverages the robustness and supply-side network effects of the existing DeFi credit markets to optimize capital efficiency. The Spectral protocol will be responsible for posting the collateral needed to service the over-collateralization ratio required by most DeFi lending protocols. Spectral will manage its own liquidity pool. Liquidity providers are motivated to provide the financial capital needed to post collateral, in return for an interest rate that corresponds with a borrowers credit risk.