Gnox has completed KYC certification by Soken.io and as a direct result has seen its price surge by 52%.
Know Your Customer (KYC)
KYC is a standard found in traditional finance primarily designed to reduce fraud. Its purposes go beyond this and are used to craft a financial profile for the individual so that the bank or investment service they have decided to utilise can build up an understanding of the agent’s risk tolerance and financial standing. An example is the types of securities the institution will offer the client depending on their financial profile.
The function of KYC is so that the institution can verify the customer and make sure they are doing business with the person that the customer claims to be. In traditional finance, identity is inseparable from financial services and is a requirement for even the most basic services such as opening a bank account.
KYC in DeFi
Decentralised Finance (DeFi) removes the intermediary and is open and permissionless. It seeks to disrupt the permissioned and custodial approach found in traditional finance and thus has led to a financial revolution and a new age of transparency. Financial institutions acting as intermediaries have been replaced by code which treats every participant equitably.
However, with DeFi being a nascent economic sphere there is currently little to no regulation and this leads DeFi to become a dangerous place for those who fail to undertake research. This general aphorism has been condensed into the acronym DYOR- do your own research. Which can be literally translated to ‘I am not responsible for the losses of any funds that are incurred’.
Most investors participating in DeFi cannot read code and thus rely on community approval and other developers’ comments. But this does not stop bad actors, and currently, DeFi is ripe with bad actors.
Protocols operating in the DeFi space can choose to complete KYC with companies. The central reason for this process is to build investor trust. If the protocol has completed KYC it means that the developers and project leads have shared their identities. They are known, and thus in the case of fraud, these identities will be handed over to the appropriate legal authorities, and legal action will be pursued.
Gnox (GNOX) and Soken.io
Soken.io is a company that began by auditing smart contracts and has expanded into the legal field to help companies operating in the DeFi sphere to operate comfortably in their respective jurisdictions. It is a highly respected firm and is partnered with CoinMarketCap, KuCoin, CoinGecko, Crypto.com, and DexTools just to name a few.
Gnox has undertaken KYC with this firm and now the identity of the project leads has been shared. This move proves that Gnox is a legitimate protocol with no plans to profit at the expense of its investors’ base. This move has consolidated investor trust and boosted investor sentiment in the protocol leading to the tokens price to surge with investors confident in the developer’s long term intentions.
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