The future of KYC in DeFi
DeFi is growing rapidly, creating financial products and services without the need for intermediaries. However, the growth of DeFi also poses new challenges for regulators and users, particularly in terms of security and compliance.
The role of KYC in DeFi
KYC is an important tool for preventing money laundering, terrorist financing, and other illegal activities. In traditional finance, KYC helps to establish customer identity, assess risk, and ensure regulatory compliance. However, in the decentralized space, the absence of centralized authorities creates new challenges for the effective implementation of KYC.
The key aspect in this context is the KYC process. PureFi Protocol provides innovative KYC solutions that help ensure transparency and trust in the DeFi world.
PureFi is a full-fledged decentralized compliance protocol for Web3 that preserves user anonymity through the use of verified credentials and ZK protocols.
PureFi Protocol uses advanced technologies to provide an efficient and convenient KYC process in DeFi. Key aspects of their solutions include:
Decentralized Identity (DID)
PureFi applies decentralized identification, DID in the form of a Verifiable Credential is securely stored locally on the user’s device. PureFi also acts as a KYC Credential provider in the Polygon ID ecosystem.
This provides more control over personal information and increases security. Users can grant access to their data only for specific transactions, while maintaining privacy.
Proof of Humanity
This is a verification system that uses a combination of social verification and video verification to create a “sybil-resistant” list of people. Sybilance means that the system is resistant to the creation of fake accounts (sybils), which is a common problem in online systems.
Integration with DeFi platforms
PureFi actively cooperates with various DeFi platforms to integrate its solutions. This allows us to provide a seamless KYC process for users and improve the overall experience of using DeFi services. Users can use both on-chain credentils developed by PureFi and of-chain PolygonID credentials. Integration is possible with any smart-contract that allows, for example, for staking, lending, borrowing, swaps and etc
For example, Panther has integrated PureFi, which has led to fruitful cooperation. PureFi and Panther offer:
- Decentralized KYC (dKYC): Users confirm their identity without disclosing personal information.
- Wallet AML verification: Verifies users’ wallets for the connections to the illicit activities, such as money laundering, sanctions and etc.
- Panther offers different levels of compliance with different KYC requirements and withdrawal limits.
This partnership aims to create a complient, private and secure DeFi ecosystem for everyone.
Transparency and audit
PureFi ensures transparency of the KYC process through the use of smart contracts that automate data verification off-chain; only proof of KYC is stored on-chain. This allows any participant to verify the compliance of transactions with regulatory requirements and builds trust among users.
The solutions offered by PureFi have several key advantages:
1. Security: Decentralized ZK data minimizes the risk of information leakage and misuse.
2. Transparency: Smart contracts ensure transparency and accessibility of KYC results.
3. Convenience: Integration with popular DeFi platforms in the future, making the process easier for users
4. Compliance with regulatory requirements: PureFi helps DeFi projects meet regulatory requirements, which contributes to their legitimacy and investor confidence.
The future of KYC in DeFi largely depends on innovative solutions that combine security, transparency, and convenience. PureFi Protocol is one of the leaders in this area, offering technologies that help to create a safe and secure DeFi space. Implementation of such solutions helps to ensure compliance with regulatory requirements, increase user confidence, and contribute to the sustainable development of the DeFi ecosystem.
About PureFi Protocol
PureFi Protocol allows dApps to fully comply with local and global regulations while preserving decentralization and user anonymity.
Developed by AMLBot in partnership with Hacken Foundation to provide a full-cycle solution for crypto asset analytics and AML/KYC procedures for the Web3 infrastructure.
