While decentralized finance (DeFi) remains a phenomenal creation, the market has faced numerous challenges mostly, fraud-related cases. According to CipherTrace, fraud within the DeFi space between January and April added over $240 million. To protect investors and users, the industry introduced new solutions, including Know Your Customers (KYC) and auditing companies to keep things in check.
This is why a team of experts created SolidProof, a German-based project aimed at protecting participants within the DeFi market. Launched in 2021, SolidProof specializes in smart auditing contracts. The company checks for vulnerabilities by using manual and automated tests to help connect the project to the targets community.
The KYC solution has largely helped eliminate fraudulent participants. The solutions ensure that each participant provides personal information and any other relevant data. Know Your Customer (KYC) standards are designed to protect financial institutions against fraud, corruption, money laundering, and terrorist financing. Data collected during the KYC process ensures that users or investors do not participate in money laundering or any illegal financial activities.
SolidProof’s KYC process entails establishing the customer identity, understanding the nature of the customers’ activities, and ensuring that the customers’ source of funds is legitimate, and analyzing any money laundering risks associated with customers.
On the other hand, SolidProof’s audition company comes in place to check a project’s smart contract to see if there are any vulnerabilities. The process helps developers and project owners from falling victims to various attacks, including hacks that could lead to huge losses.
Their website reads in part:
‘Our audit reports are custom, thorough, and transparent. The report will classify any identified vulnerabilities by severity (Critical, Medium, Low), along with suggested remediations. In addition, with every successful audit, we’ll also provide you with a uniquely Verification Badge that we encourage you to share with pride! This badge contains an ID for anybody to show as proof of your successful audit.”
The two solutions are also fostering increased adoption for DeFi by building trust among participants. Notably, the auditing process brings reinsurance to the investors allowing them to check how safe is the project and their assets. In addition, auditing also helps developers become aware of any security issues that need to be resolved in their coding. Usually, audits come before the project is launched to build trust among investors.