Welcome to our Monthly Crypto Credit Scores Report, where we share insightful findings from our research on wallet address credit scores. In this report, we explore the noteworthy transformations observed in the third quarter of 2023, following Centic’s update to the FICO Crypto Credit Scores model.
Let’s dive into the Q3 2023 insights!
Overall Summary
As of the end of September 2023, the total DeFi wallets that Centic has been processing their credit scores were 4,567,751 with Poor credit score wallets holding the majority (94.1%), while Fair credit score ones accounting for 5.8%.
So why did the state of Q3 2023 go like this? Let’s scroll down to our research and explore more insights into the borrowing & investing behavior of wallets.
Crypto Asset Flow
The average amount of assets in the wallets of each credit score range
In Q3 2023, the average amount of assets in Very Good credit score wallets was over 15M, almost tripling that of Good credit score wallets. Wallets with fair credit scores typically hold approximately $560K. Meanwhile, those with the lowest credit score level hold around $33K, surpassing Q2 2023 significantly.
Top 5 cryptocurrencies that tended to increase in the wallets of each credit score range
The investing traits and targeted cryptocurrencies of wallets in the four score ranges changed fairly, compared to Q2 2023. Wallets with Very Good primarily held tokens of ETH and tokens of well-known DeFi projects, but less allocation to stablecoin. Wallets with Good credit scores mostly held stablecoin. Meanwhile, Poor and Fair credit score wallets were inclined towards tokens of DeFi projects with poor reputations and popular native blockchain tokens.
Very Good Credit Score Wallets
Wallets with Very Good credit scores primarily hold Lido Staked Ether (STETH) and Wrap ETH (WETH), along with stablecoin USD Coin (USDC). They also tend to allocate money to famous DeFi projects such as CRV and LDO.
(Check the quality of these cryptocurrencies HERE)
Good Credit Score Wallets
Good credit score wallets tend to hold the stablecoins: Tether (USDT), Binance USD (BUSD) and USD Coin (USDC); along with ETH and BNB.
(Check the quality of these cryptocurrencies HERE)
Fair and Poor Credit Score Wallets
On the other hand, wallets with Poor and Fair credit scores typically hold tokens of inactive projects like BUILD (almost 99%). Meanwhile, they mostly allocated tiny shares to blockchain native tokens and stablecoins.
(Check the quality of these cryptocurrencies HERE)
More Insights Into The Borrowing Behavior Analysis
During Q3 2023, there were 106,702 wallets making loans, accounting for 2.3% of the total DeFi wallets and nearly doubling that of the previous quarter. They borrowed a total amount of approximately $3.7B. Let’s delve into the borrowing behavior of these wallets across four credit score ranges.
Loan statistics
In Q3 2023, almost half of the crypto loans were made by the Fair credit score wallets, whereas only 1.5% of the total crypto loans were taken by Very Good credit score wallets.
Most wallets that made crypto loans were in the Poor and Fair credit score range, however, they typically requested significantly smaller loan amounts for each transaction and borrowing frequency than wallets categorized as Good and Very Good.
On average for each borrowing transaction, Good Wallets requested around $183K, whereas Very Good Wallets requested approximately $10.8M, highlighting a substantial disparity in borrowing amounts.
Liquidation Statistics
In Q3 2023, the liquidation statistics witnessed a significant increase in comparison with the previous quarter, with 3,266 wallets liquidated and $97.3M total liquidated amount.
Most of the liquidated wallets were in poor and fair credit score ranges, while only 24 Good credit score wallets got liquidated and there were no wallets in the Very Good score range. Most notably, wallets in the Fair credit score range were liquidated a considerable amount of approximately $93M, and each wallet was liquidated an amount of around $44K
(These statistics were counted on BNB Chain, Ethereum, Polygon, Optimism, Arbitrum, Fantom and Avalanche)
Conclusion
In Q3 2023, Centic’s report showed significant shifts in crypto credit scores. Among 4.5 million DeFi wallets, 94.1% were Poor, and 5.8% were Fair credit. Very Good wallets held $15M+, Good wallets averaged $560K, and Poor wallets rose to $33K.
Investment preferences varied: Very Good favored STETH and WETH, Good leaned towards stablecoins, while Poor and Fair wallets explored inactive projects.
Borrowing involved 106,702 wallets, 61% from Fair credit and just 1.5% from Very Good. Liquidations surged, impacting mainly Poor and Fair credit wallets.
Centic is a data analytic platform that provides the scores of all entities on Web3 Space by integrating on-chain data in blockchain space and off-chain data in reality.
By providing a comprehensive evaluation system, we assist users in confidently making the right decision in the traditional and digital worlds.
