What does traditional finance rely on to make money? It's that centralized credit system — banks and rating agencies say "you’re good" and you’re good. But in DeFi, everyone’s unsure, so they came up with the idea of over-collateralization, which is essentially a compromise of mutual distrust.

Have you ever thought about a different approach? Some on-chain data networks are trying to establish a reputation system based on actual behavior, using verifiable data records to create a "credit profile" for each address or protocol. This system evaluates from four dimensions:

**Financial Behavior Dimension** — How is your repayment record? Have you been liquidated? Are profit distributions timely? **Governance Dimension** — The quality of participation in community governance, proposal approval rates, voting consistency. **Risk Control Dimension** — Historical risk management performance, stress test results, how you respond to extreme market conditions. **Protocol Collaboration Dimension** — Records of interactions with other protocols, whether contract commitments are fulfilled.

These data are objectively recorded and verified by the network, ultimately forming a reliable reputation score. Once this system matures, the way DeFi operates will change completely:

Protocols or users with high reputation can apply for unsecured credit, eliminating the need to lock assets for borrowing; if protocols have good reputations, they can establish "trust channels," making cross-protocol interactions faster and cheaper; governance rights are no longer solely based on token holdings, but part of the weight shifts toward reputation scores.

From over-collateralization to reputation assessment, this is indeed a paradigm shift in DeFi credit systems.