Wildcat V2: Seeking On-Chain Credit Expansion
Navigating Narratives has a closer look at Wildcat and its push to expand on-chain credit markets.
Preview
TLDR
- Most DeFi lending platforms such as Aave rely on overcollateralized loans, limiting the creation of credit on-chain.
- Wildcat Finance is an attempt to establish a sector for undercollateralized “CeDeFi” loans, opening up credit markets to institutional borrowers based on trust and reputation.
- Wildcat V2 went live on Feb 27 and offers "hyper-flexible" credit markets where borrowers set loan terms (reserve ratio, interest rate, penalties, etc.) and lenders choose whether to participate, with no protocol intervention beyond settlement.
- Wildcat aims to create a laissez-faire, transparent, reputation-based credit market. Its growth depends on the ability to onboard reputable institutional borrowers, the ability of lenders and borrowers to self-regulate, the maintenance of attractive APRs, and borrowers’ ability to maintain confidence amid heightened market volatility.
