Decentralized finance (DeFi) is a $100 billion industry. Some investors use it to turn dreams into fortunes through yield farming, derivatives, and lending. Unfortunately, many others lose their savings in DeFi scams and leaky protocols.
Only in 2021, the DeFi space saw hackers steal over $474 million from deficient projects. As a result, even long-time investors are considering stepping out of decentralized finance. To keep the sector going, the security of blockchain protocols has to improve.
In this regard, Solidproof aims to enhance DeFi safety and help rebuild its credibility. With innovative solutions, such as KYC and auditing, the Germany-based company should reduce the risk of fraud and money laundering.
How KYC Increases DeFi Security
Know Your Customer (KYC) is a procedure that companies from various sectors use to better understand their users. In decentralized finance, protocols can use it to determine the new users’ intentions for using their platforms.
KYC standards provide details into a user’s identity and source of funds. Also, they help a company understand whether that user poses any risk of fraudulent actions.
A DeFi protocol can use KYC to ensure that its user community consists only of reliable participants. This way, the risk of money laundering or other cybercrimes decreases significantly.
How Auditing Reduces Hacking Risks
Another significant method of improving DeFi security is through auditing. This process sees an audit expert company examine the smart contract quality of a DeFi protocol. If it finds vulnerabilities, the company signals them to the protocol developers. Additionally, it provides stable solutions for solving them.
Auditing takes place in several steps until the developers fix all the smart contract bugs. Only then, the audit company releases a security certificate that gives the protocol reliability in the eyes of potential users.
While KYC helps protect DeFi projects against users with ill intentions, auditing does the reverse. A successful audit shows that the DeFi protocol is safe and free of errors. As a result, it poses a minimal risk of being a fraudulent project.
Solidproof KYC Services
Solidproof is a new German company that seeks to enhance DeFi security with premium KYC and Audit services. The company uses a professional team of audit experts. They go over DeFi protocols with a fine comb to find potential weaknesses.
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.
This process should increase security and transparency in the DeFi space. In the long term, it should also convince more investors to join this booming sector. Lastly, it should help developers create safer and more reliable protocols.
Developers who want to know the cost of KYC can contact Solidproof for an individual quote tailor-cut for their project.
Solidproof Audit Services
Solidproof uses manual auditing to determine the solidity of a blockchain project. This process involves extensive testing of the project’s smart contracts. For instance, the auditor may add fake transaction fields to determine if the contract may succumb to double-spending attacks.
Even if the company is new, Solidproof audits already benefit from absolute trust in the crypto space. Nevertheless, the company wants to improve by releasing an auto audit tool in September.
The new Auto Audit Tool should work something like this:
The client accesses the tool and uploads their contract via a file or an URL.
The Audit Auto Tool calculates all the weak points from the available analysis tool.
The tool then delivers the audit results while mentioning that it is not a substitute for a proper audit.
After this process completes, the client may ask for an additional manual audit. This way, finding potential code vulnerabilities is more likely. If that happens, Solidproof will provide a list of errors and their possible fixes. Only after the developers fix all these issues, the company releases a certificate stating a successful audit. The client also receives a uniquely Verification Badge representing the project’s reliability.
Solidproof Gives DeFi More Credibility
As one of the up-and-coming audit companies in blockchain, Solidproof wants to do everything by the book. Therefore, it employs only high-quality KYC standards and in-depth auditing tools. Only this way, it can help decentralized finance regain the investors’ trust.
At the moment, Solidproof is a Holding and Gmbh company, which is one of the highest business levels in Germany. Also, it 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.