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Investors have a wide range of information sources they can research before putting their money into a DeFi protocol. From user reviews to third-party audits, multiple resources provide reliable data on the security of a blockchain project. This transparency level is good for the industry. But, how well do the projects know their users?
The decentralized finance sector is seeing a consistent surge of hacker attacks and illicit financial operations. More than often, malicious actors disguising as investors scour DeFi protocols for smart contract errors. And, when they find them, they siphon out substantial funds.
Recently, one similar attack deprived Poly Network of $600 million. Fortunately, the user who took advantage of deficient code had no ill intentions. He returned the money and urged the developers to reanalyze their work.
The need for better protection against malicious investors is imperative. And, the solution may come from Solidproof, a Germany-based company that set out to increase DeFi security.
What Is KYC?
Know Your Customer (KYC) is the procedure companies use to get a better idea about their customers. It helps them understand why a specific investor chooses to use their services. Also, it tells them whether they can trust the investor’s future intentions.
In decentralized finance (DeFi), KYC helps projects understand if their users are harmless or malevolent. Let’s not forget that, in blockchain applications, decentralization and anonymity are fundamental principles. Therefore, KYC procedures must reach a high standard without derailing from these conventions.
Not all DeFi protocols use KYC since they wish to keep the doors wide open to all potential investors. Unfortunately, by doing so, they might let in plenty of hackers and fraudsters. Therefore, it’s no surprise they have a higher risk of fraud, corruption, money laundering, and terrorist financing.
Solidproof KYC Services
Know Your Customer standards help DeFi projects understand who they’re dealing with at all times. By providing details into a user’s identity, KYC helps reduce the risk of fraud. Furthermore, it helps identify hackers faster when they choose to attack a protocol.
Solidproof seeks to enhance DeFi security with premium KYC and Audit services. The company uses a professional team of experts that guarantee the most reliable KYC procedures.
Here’s how the Solidproof KYC process takes place:
- Establish the new customer’s identity.
- Comprehend the nature of the customer’s activities and certify that the source of funds is legitimate.
- Understand if the client poses any potential money laundering risks.
While this process may seem straightforward, it takes a highly competent team to complete. Solidproof is a young but proficient company in this field that guarantees to provide reliable results.
Developers looking to know the cost of KYC can contact Solidproof for an individual quote tailor-cut for their project.
Solidproof KYC to Increase DeFi Protection
DeFi protocols can use KYC procedures to ensure that their communities consist of reliable investors. By employing KYC, they increase not only their protection but their transparency as well. In the end, they manage to reduce the risk of money laundering or other cybercrimes.
Solidproof aims to provide the highest standards of KYC and efficient auditing tools. In the long term, these services should improve protocol security and strengthen investor trust.
So far, the company has audited numerous projects, such as vEmpire DDAO, Binemon, and Gallant Token, among others. Additional partnerships with Unicrypt, Etherlite, and Pathfund increase the company’s prestige and dependability.
At the moment, Solidproof is a Holding and Gmbh company, which is one of the highest business levels in Germany. Also, it is leading a new generation of reliable audit companies. They aim to make the DeFi space safer not only for investors but for protocols, too.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.