In the future, all crypto Defi protocols will introduce KYC verification barrier: Bitter but True
The latest KYC verification flow chart belonging to the Uniswap crypto exchange acted as a catalyst for the big discussion among Defi protocol users.
Defi means Decentralized Finance which means no centralized party and every person can play their role to run the crypto platform under a fully decentralized environment without any barrier of KYC-related activities. Uniswap was the first defi crypto exchange in the crypto sector, launched on the Ethereum crypto network.
In the last couple of years, the majority of the Defi crypto exchanges faced heat from the regulatory bodies, as they found that many of the Defi platforms were controlled by their actual developer firm, and the developer team was fully able to control the protocol’s funds. In short, Defi protocols are found to be highly centralised, totally contrary to what they claim.
Here we can take a real example to understand the centralization level of Defi protocols. Just a few weeks back, ThorSwap crypto exchange suspended protocol services to catch the FTX hacker. However, the ThorSwap team did really impressive work but that act exposed the reality of decentralisation of the protocol.
In the last couple of years, following regulatory heat, some of the Defi protocols at a small level introduced a KYC barrier and it is expected that all Defi protocols are going to introduce the KYC barrier in the near future. Alternatively we can say that the definition of Defi protocols will be different in the upcoming years.
On 14 Oct 2023, A crypto YouTuber shared Uniswap defi protocol’s flow charge to explain how the Uniswap team will whitelist only those people who will go through the KYC verification system.
— yourfriendSOMMI
Disappointing NEWS:
Uniswap is bringing out KYC Verification in the form of a Hook for Uniswap v4.
UniswapX is also using a "permission required" off-chain server.
It starts as an "option" and then we all know how it ends…
Uniswap is Fake DeFi.
pic.twitter.com/1h0BqOsufd
(@yourfriendSOMMI) October 14, 2023
Now it will be interesting to see the growth of the Defi sector in the upcoming years and also it will be interesting to see whether people will prefer to go with Defi or Cefi because transactions on both types of platforms will be traceable corresponding to the crypto traders.
Read also: Ethereum co-founder dismisses ETHGate theory
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