Once Upon a Time in DeFi

Before I tell you how The Price PureFi has saved the Kingdom of DeFi, here is a story of how it all began. 

Once upon a time, in the faraway Kingdom of DeFi, a massive and explosive change took place. All the holders were happy since the growth of the Kingdom was driven by a massive influx of liquidity in the market.

During these happy times, anyone was able to go through a simple process of exchanging their money for a coin without completing any KYC/AML verifiable processes. Then, invest the coins in a project with great potential, and, crossing fingers, watch the investment grow. In other words, holders could easily create wallets and start trading without disclosing any personal data. 

The Kingdom of DeFi was prospering as its technology could open up an enormous amount of opportunities for honest holders, up until one day, the evil bad actors came and occupied the Kingdom. 

Some of the honest market players stopped trading entirely and the rest kept going but wouldn’t stop complaining about having sleepless nights, worrying whether their coins were “pure” enough. The pure blue sky was covered with heavy gray clouds. 

The bad actors were the curse of the Kingdom because they served a function of laundering “dirty money” and systematically put the good actors and their financial activities at risk. 

Kingdom’s local police called FAFT couldn’t recognize the good actors from bad ones anymore. The Kingdom of DeFi was in complete chaos. 

Even the good actors who added a tangible value to the rebuilding of the global financial system could be approached and denied any further activity related to DEXs or providing liquidity to liquidity pools by FATF.

Truth be told, the legends about evils like DeFi100 were horrifying! Around $32 million were taken away from the investors just like that! Unfortunately, the investors were not the only ones at high risk.

Holders unwillingly took the high risk of picking up someone else's “dirty” money trail once they decided to withdraw their assets back.

Liquidity pool operators took responsibility for the funds that the pool held. The value of the product was completely demolished once it wasn’t credible for honest holders anymore. It was especially hard to earn users’ trust when the product didn’t comply with money laundering and governmental KYC regulation. 

There was no way DEX traders could classify coins on their own. By only keeping the history of each transaction, no one was able to defend whether the buy or the sell was “clean”. 

Prince PureFi, the one-step compliance protocol for decentralized finances, was developed by AMLbot as a project of Hacken. He aimed to provide a full-cycle solution for crypto asset analytics and AML/KYC procedures on the DeFi market.

PureFi connects provides crypto asset analytics to protect liquidity pool users and honest market players. Analytics results are available via VC (verifiable credentials). Each VC certificate contains information about asset price, AML/KYC, and other metadata - so it can be used as a full-fledged AML/KYC verification for any legal/validation issues.

The content of the certificate is encrypted and available only from the public key list (whitelist). Whitelisted participants get data from the certificate with zero-knowledge proof (ZK SNARK).

In this way, the VC certificate empowers its owner to prove to the verifier that a statement is true without disclosing any facts excluding the statement’s validity.

This article is part of the Decentralized Internet Writing Contest hosted by HackerNoon in partnership with Free TON.

Join the contest for your chance to win up to $1500 worth of TON crystals every month.

Looking for more articles like this? Be sure to subscribe to our newsletter in the footer below!