Could ZKPs Be Used to Create a “Decentralized Credit Score” for DeFi Users without Revealing Their Financial History?

Yes, ZKPs are well-suited for this application. A user could generate a proof that their wallet history meets certain criteria (e.g. total assets over a threshold, history of successful loan repayments, no liquidations) without revealing the specific transactions, wallet addresses, or exact amounts.

A smart contract or DeFi protocol could then verify this proof to grant access to undercollateralized loans or better interest rates. This allows for a reputation-based financial system that preserves user privacy, moving beyond the purely collateral-based lending common in DeFi today.