top of page
Blog: Blog2
Search
id-bound

DeFi limitations and How to prevent Sharks from stealing from Whales?

Updated: Mar 15

DeFi tokens distribution,

The initial sale of a security token is typically called a security token offering (STO), or a tokenized security offering (TSO) or a tokenized asset offering (TAO). STOs are distinct from ICOs because the tokens sold (security tokens) represent ownership in a real asset. STO investors know the real value of the underlying asset they’re buying and benefit from any future price appreciation in the asset.

Imagine now, that your Company has a very successful STO (security token offering) for your ERC-20 crypto token (including security coin or stablecoin), and you are a CFO, in charge of storing and distributing these tokens to the group of investors, advisors, lawyers, accountants and co-workers. You are a publicly known as a Crypto Whale. You do not seek this publicity – but this is all on the Etherscan!

The sharks (thieves, etc.) will come after you, sooner or later.

In addition, any transfer to an anonymous account is a big no-no and KYC must be in place for the CFO.

In the essence CFO would like to have a private payments network on top of the Public Blockchain, while keeping benefits of both.

This is what TRIO can do for you in 3 steps:

  1. The CFO and the group of the token recipients become TRIO service users. The Company provides their Names and Emails, and we take care for the rest. The token minter mints the tokens into CFO's TRIO account for distribution.

  2. Any group member must request the specified number of crypto tokens at the group website. The request is a zero-value transaction on mainnet using TRIO wallet. The site Identity is verified in real time. Each person’s Identity is verified in real time. The consideration for the requested crypto tokens is recorded by Company.

  3. The CFO may transfer the requested number of crypto tokens to the recipient address if the required consideration is duly paid. The request will fail, if CFO Identity verification fails or if the recipient of crypto token is not authorized by the group. The recipients may do with the received tokens whatever they wish.



See the demo on Online Trade for ERC-20 token at Support Portal | id-bound.com.

TRIO Wallet as a service also allows the group these unique features:

  • Lost password- always available backup (one on laptop, one on smartphone) to recover seed phrase.

  • Stolen password - your tokens are safe.

  • Stolen seed phrase – private key safe. You can make as many backups of seed phrase as possible, without fear.

TRIO Wallet utilises TRIO smartphone Identity Authenticator. providing Context and Risk-aware multi-factor strong identification:

Simultaneous by-design online identification and transaction Context authentication

•Risk determined by Transaction Value

Something you have – possession, spoof-prove

•Something you know – PIN

Something you are – Adaptive Behavioural Biometrics

Somewhere you are – Adaptive Behavioural Geolocation

•Smartphone Loss/Theft recovery

Note: TRIO allowed transfer is not a whitelist of public wallet addresses. This whitelist may be susceptible to errors, which are impossible to recover from. TRIO allowed transfer is based upon the Identities of the persons in the Group.

When considering multi-sig wallets for the job, one must consider the complexity of recovery if something goes wrong (wallet config inaccessible, too many keys inaccessible, etc.). You may lose access to your tokens. TRIO is a centralised service that will always provide you with the necessary guidance.

DeFI Limtations,

There are limitations associated with DeFi that are not allowing for full adoption and are causing concerns for regulators and governments.

Although DeFi has great potential, it has certain limitations and risks. Built on code from blockchain technologies,

DeFi applications are susceptible to coding errors, hacks, and service outages.

In addition, people who custody their own digital assets must secure them against inadvertent loss and cyber-attacks without the help of a central actor to redress problems. Users of DeFi applications must likewise understand counter-party risks and liability issues before depositing their assets in a protocol.

From a regulatory perspective, DeFi presents money laundering and illicit financing risks because it allows people to transact without disclosing their identities.

Current DeFi protocols operate with little regulatory oversight, and important questions remain about how existing financial laws and regulations will be applied to DeFi. Lawmakers and regulators are grappling with how to address DeFi’s current limitations and risks while also allowing it to reach its full potential.

Institutional investors are not yet ready to adopt DeFi until some of these limitations are addressed.

TRIO addresses these problems by including DeFi users and their smart contract addresses in the TRIO ecosystem. Thus private sub-network is established on top of of Public Ethereum blockchain. The user Identities are known and the smart contract is vetted. The utility tokens used to send transactions to the DeFi smart contract are limited to the private sub-network. Once the tokens are delivered to the contract - the proprietary DeFi process will begin.

 

21 views0 comments

Recent Posts

See All

Comentarios


bottom of page