Thread by @AltCryptoGems

Why is it important for a #Crypto project to be 'Audited', 'KYC' Verified and/or 'Doxxed'?

I will leave all the official links at the end.

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#NFA #DYOR

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Most Cryptocurrencies have Smart Contracts. They are programmes stored on the #blockchain and are generally used for #investing, #trading & so on.

Smart Contracts are constantly dealing with small-large amounts of funds.

One exploit/bug can cause major problems like loss of funds or even termination of the contract.

In the world of #DeFi, projects are born every second. Most of them happen to be rugs or projects with bad intentions.

As we all know there are no "real names" in Crypto. #DeFi has created the perfect gateway for criminals to anonymously get away with stealing assets.

It is very common for developers and/or project owners to hide their identities. There are lots of popular Cryptocurrencies with anonymous teams or owners, e.g. #Bitcoin's mysterious Satoshi Nakomoto or @OlympusDAO's anonymous team.

Some are legit and some are not.

So how can we tell if our assets are safe in these anonymous companies?

In the world of Web 3, there are THREE main ways a company can prove to be 'Transparent'.

Public/Private #Doxxing
#KYC
#Audit

Public/Private #Doxxing

When a company has a fully doxxed team with no one to hide, that they reveal openly to the public, they can choose to skip the KYC process.

On rare occasions, some companies will "Privately" doxx to an influencer or company. If the company decides to run with the funds. The Influencer or chosen company would have to reveal the details provided.

#KYC (Know Your Customer)

The #KYC process usually consists of THREE Main Checks:

Identity Verification - Name, Date of Birth, Location & other Legal info.

Screening - Check for 'Criminal Records', acts of 'Money Laundering' and 'Sanctions' in other countries etc.

Monitoring - the Client is monitored over some time to check for malicious activity.

At this point, the company does not have to choose to publicly #Dox if the KYC was completed by a reputable company.

If the company then decides to steal funds or affect the protocols' users, the KYC company has every legal right to publicly reveal the identities of all the people involved and authorities alerted.

Audit

Transparent companies will pay a premium for an '#Audit' on their Smart Contract, to assure users there are no exploits, errors or security vulnerabilities.

The #Audit companies run vigorous tests and will propose ways to alter the code, to be more secure and user-friendly. Once the Audit on the Smart Contract is complete, the company is given a certificate.

Audits are essential if a company is deciding to stick around for good. Audited companies have the least risks of exploits, hacks or any loss of funds.

Assuring maximal security to the #Crypto masses.

In conclusion, companies that do not show any of the above processes, wave huge 'red flags'.

Just to list a few Reputable Companies:

Twitter Handles

Certik - @CertiK
Hacken Club - @hackenclub
Chainalysis - @chainalysis

That's it for now! Thanks for reading! If you want to learn more about Web3 and want free crypto alpha, be sure to follow me - @AltCryptoGems and join our Discord server!

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