BLOOM Protocol: A Decentralized Identity and Credit Scoring Protocol

Hello friends! Today, let’s talk about a blockchain project called **BLOOM Protocol**. In the crypto world, project names can sometimes be similar, so today we’ll focus on the one aiming to revolutionize the credit scoring system through blockchain technology—**BLOOM Protocol**, which launched around 2017 and issued the **BLT** token. Please note, there may be other projects with similar names on the market, but today we’re introducing this one.

What is BLOOM Protocol

Imagine your credit history is like a passport that only works in your hometown. When you move to another country, that passport becomes useless, and you have to start building your credit from scratch. BLOOM Protocol wants to solve this problem. It’s a decentralized credit scoring protocol—in simple terms, it aims to build a global, user-controlled credit identity and credit record system on the blockchain.

The target users for this project are those who struggle to access credit services in traditional financial systems, such as the 3 billion people worldwide without bank accounts or credit scores, and those whose credit records can’t be transferred due to international relocation. BLOOM Protocol hopes to provide a standardized, programmable ecosystem that allows everyone to access credit services securely, anytime and anywhere.

Here’s how it works: users first create a globally secure digital identity through **BloomID**. Then, their borrowing and repayment history is recorded in **BloomIQ**, the credit registry system. Finally, based on this information, the system generates a **BloomScore**, a decentralized score measuring the user’s credit status—like a FICO score in traditional finance, but more transparent and portable. With this BloomScore, users can apply for loans from traditional financial institutions or digital asset lenders.

Project Vision and Value Proposition

BLOOM Protocol’s vision is to “fundamentally transform” the credit risk industry by creating a global, inclusive credit profile through blockchain-based identity verification and credit scoring. Its core value proposition includes:

• Solving Core Problems:
  • Cross-border Credit Scoring Challenges: Traditional credit records can’t be transferred internationally, forcing people to rebuild credit from scratch in a new country. BLOOM Protocol aims to make credit records portable worldwide.
  • Credit Assessment Lag: Traditional credit systems rely on historical data and are unfriendly to “credit invisibles” without borrowing history, especially among minorities, the unbanked, and young people. BLOOM Protocol allows users to build credit even without traditional borrowing history.
  • Identity Theft Risk: Traditional loan applications require users to expose large amounts of personal information, increasing the risk of identity theft. BLOOM Protocol reduces personal data exposure through decentralized identity verification.
  • Lack of Competition in Credit Scoring Ecosystem: Credit data in many markets is monopolized by a few institutions, resulting in high costs and poor user experience. BLOOM Protocol introduces competition, aiming to lower costs and improve the lending experience.
• Differences from Similar Projects: BLOOM Protocol emphasizes decentralization, user control over their own data, and global portability of credit through blockchain technology.

Technical Features

The technical foundation of BLOOM Protocol is blockchain, built on **Ethereum** and **InterPlanetary File System (IPFS)**.

• Technical Architecture:
  • BloomID (Identity Verification): This is a system for creating globally secure digital identities. It allows lenders to offer compliant loans worldwide, while borrowers don’t have to overexpose personal information. Think of it as a globally recognized digital ID that you control yourself.
  • BloomIQ (Credit Registry): This system records and tracks current and historical debt obligations associated with a user’s BloomID. It’s like a decentralized credit reporting agency, but you control the data.
  • BloomScore (Credit Scoring): This is a metric for measuring consumer creditworthiness. It’s a decentralized score, similar to traditional FICO or VantageScore, but with an updated model that better reflects users’ credit status.
• Consensus Mechanism: Since BLOOM Protocol is built on Ethereum, it relies on Ethereum’s underlying consensus mechanism to ensure transaction security and immutability.

Tokenomics

BLOOM Protocol’s native token is **BLT (Bloom Token)**.

• Token Symbol: BLT
• Issuing Chain: Ethereum
• Total Supply or Issuance Mechanism: Initially planned to issue 150 million BLT, with a declared fixed total supply.
• Token Utility:
  • Governance Participation: In the early stages, BLT holders could vote on development-related proposals.
  • Ecosystem Participation: BLT tokens are designed to facilitate participation in the ecosystem; for example, the influence of lenders, data assessors, and borrowers may be related to the amount of BLT they hold.
  • Paying Protocol Fees: Used to pay for all transactions completed on the protocol.
• Token Distribution and Unlock Information: In the initial coin offering (ICO) from late 2017 to early 2018, BLOOM Protocol raised about $30.9 million. According to the plan at the time, 50% of tokens were distributed through the token sale, 40% held by the project team for long-term expenses and network updates, and 10% allocated to advisors, lenders, and partners.

Team, Governance, and Funding

• Core Members and Team Features: BLOOM Protocol was founded in August 2017 by engineers from Stanford University. Core team members include co-founders Jesse Leimgruber, Ryan Faber, and Alain Meier, as well as CEO Geoffrey Arone and CTO Isaac Patka. The team is considered experienced in identity and reputation fields.
• Governance Mechanism: In the early stages, BLT token holders were given voting rights on project development proposals. The project also joined the Decentralized Identity Foundation (DIF), which is dedicated to developing unified identity recognition and verification standards.
• Treasury and Funding: BLOOM Protocol raised about $30.9 million in its initial coin offering (ICO).

Roadmap

BLOOM Protocol has gone through several key milestones and plans:

• Historical Key Events:
  • August 2017: Project founded, began ecosystem planning and smart contract development.
  • September 2017: Project promotion began.
  • October 2017: Public token sale plan announced.
  • November 2017 to January 2018: Initial coin offering (ICO) conducted, raising about $30.9 million.
  • TransUnion Partnership: Established partnership with TransUnion, one of the three major U.S. credit reporting agencies, to provide credit monitoring features.
  • Joined DIF: Project joined the Decentralized Identity Foundation (DIF).
  • August 2022: The U.S. Securities and Exchange Commission (SEC) charged BLOOM Protocol, LLC with conducting an unregistered ICO and reached a settlement.
• Future Key Plans (according to early whitepapers and materials):
  • Phase One: Allow users to invite friends to join the network using BLT tokens and vote on early development proposals.
  • Phase Two: Implement applications allowing users to verify their identity and match their BloomID; users can confirm identity information and add extra data to influence their credit score.
  • BloomCard: Plan to launch a blockchain-based credit card, allowing users to spend crypto assets like fiat currency and build their BloomScore.
  • Active User Acquisition and Real-world Application: The team previously stated they would actively acquire users and maximize the practical application of the BLOOM protocol.

Common Risk Reminders

Any blockchain project comes with risks, and BLOOM Protocol is no exception. Here are some common risks to be aware of:

• Compliance and Operational Risks:
  • Regulatory Challenges: The most significant risk is that in August 2022, the project was charged by the U.S. Securities and Exchange Commission (SEC), which deemed its BLT token ICO an unregistered securities offering. BLOOM Protocol ultimately settled with the SEC, agreeing to pay a fine, register its token as a security, and offer refunds to ICO investors. This indicates the project faces major compliance challenges and has been deeply affected in its development.
  • Market Adoption: Despite its ambitious vision, getting global users—especially those in developing countries—to adopt a new credit platform requires extensive education and promotion.
  • Network Effects: The project’s success largely depends on strong network effects, meaning it needs enough users and lenders to participate for its value to be realized.
• Technical and Security Risks:
  • Smart Contract Risks: As a blockchain-based project, smart contract security is critical. Any vulnerabilities could lead to loss of funds or system failures.
  • Data Privacy and Security: Although the project aims to enhance privacy, handling sensitive identity and credit data still requires the highest level of security.
• Economic Risks:
  • Token Price Volatility: The price of BLT tokens may be highly volatile due to market sentiment, project progress, and regulatory environment.
  • Competition: Traditional credit scoring agencies and emerging decentralized finance (DeFi) projects are also active in the credit space, so BLOOM Protocol faces fierce competition.

Verification Checklist

• Block Explorer Contract Address: The contract address for BLT token on Ethereum is
  0x107c4504cd79c5d2696ea0030a8dd4e92601b82e
  . You can view its transaction records and holder information via Etherscan or other block explorers.
• GitHub Activity: Direct, active GitHub repository information for the original BLOOM Protocol core credit scoring project is not clearly available in public searches. While there are some GitHub repositories related to “Bloom Credit,” their direct connection and activity with the original protocol require further verification. This may be related to the SEC regulatory action faced by the project in 2022.

Project Summary

BLOOM Protocol is a blockchain project launched in 2017, aiming to revolutionize the global credit scoring industry through decentralized identity verification (BloomID), credit registry (BloomIQ), and credit scoring (BloomScore) systems. Its core goal is to provide a portable, user-controlled credit profile for billions of people worldwide who lack traditional credit services, and to solve issues in traditional credit systems such as cross-border credit inconvenience, challenges for credit invisibles, and identity theft risks. The project is built on Ethereum and IPFS, and has issued the BLT token for governance and ecosystem participation.

However, in August 2022, the project was charged by the U.S. Securities and Exchange Commission (SEC) for conducting an unregistered ICO, and ultimately settled, agreeing to pay a fine and offer refunds to investors. This event had a significant impact on its subsequent development. Despite its innovative vision, regulatory challenges, market adoption difficulties, and competition with other similar projects are key issues it must face in its development.

Please note, the above information is an objective introduction and analysis of the BLOOM Protocol project and does not constitute any investment advice. The cryptocurrency market is highly volatile and risky; please be sure to conduct thorough personal research (DYOR) and make decisions cautiously.