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FNDZ x Fractal Team Up For Safe and Compliant Copy Trading
  • The problem with anonymity
  • The need for KYC in DeFi
  • Why FNDZ is building with Fractal
  • The FNDZ x Fractal partnership
  • Looking towards the future
  • About Fractal

FNDZ will be partnering with Fractal, the identity verification platform, to fulfill its regulatory compliance in a safe and hassle-free way.

By partnering with Fractal, DeFi companies can outsource some of their regulatory compliance needs without compromising their integrity. All sensitive data is encrypted and subject to state-of-the-art security processes. Fractal’s decentralized identity wallet brings data ownership back to its users and enables them to selectively disclose their data to trusted parties of their choice.

The problem with anonymity

The total value of DeFi protocols has skyrocketed to $110 billion from just $20 billion over a year ago. Most of this growth has been driven by retail investors and traders.

Perhaps the single biggest driver of growth has been the promise of sky-high profits. In DeFi there are no middlemen between transactions; all transactions are handled on a peer-to-peer basis. By eliminating all middlemen, the lender keeps almost all of the returns. This results in much higher yields than many traditional investment models.

Total DeFi users over time. Source: Dune.xyz

However, there are also significant risks to users and businesses alike. According to a report by Elliptic, investors lost more than $12 billion to DeFi fraud and theft in 2021. This aspect is a concern for many investors and a major barrier to adoption.

One solution to prevent such fraud is known as ‘KYC’. KYC (short for ‘know your customer’) gives users more security by ensuring that all parties involved in a transaction are unique, human, and validated. In fact, both the EU and the US have passed initial legislation for identity rules in DeFi, with final rules to become effective in 2023.

The need for KYC in DeFi

KYC brings a much-needed layer of safety to the FNDZ platform. It helps to establish certainty that traders are who they claim to be. This is especially important in DeFi, where transactions between users occur without a third party.

While anonymous transactions have many advantages, they also create an ideal ground for criminal exploitation, such as money laundering and terrorist financing. This is where KYC can make a real difference. It creates the due diligence checks needed to keep bad actors away, and stops corruption from taking root. These measures create a more trustworthy basis for trading, and allow users to trade without daily transaction limits. And since KYC will soon be required by law, FNDZ users can be sure their wallet is fully compliant.

Why FNDZ is building with Fractal

The entire KYC process is made simple and convenient by Fractal.

Fractal’s KYC process takes less than three minutes. First, users verify their identity with Fractal. Then, they register their MetaMask address in their Fractal account. Once this is complete, the user receives a unique credential. This credential can be shared with FNDZ to complete the KYC process. The benefit is that no personal data is ever shared with FNDZ and users can continue to trade with their preferred wallet.

In true DeFi fashion, all personal data is encrypted and stored in the Fractal wallet to ensure that only the user has access to it. When a user needs to prove their identity, they simply share their credentials rather than the personal data itself. And because Fractal is a leading KYC provider, users can share their credentials with as many other DeFi applications in the market as they wish.

The FNDZ x Fractal partnership

"KYC checks are important for our future compliance. Soon, new laws will be introduced in the DeFi space, and working with Fractal will allow us to stay ahead of the curve," ~ Valentino Cremona, founder of FNDZ.

"Decentralized finance has evolved into a global marketplace. We are proud to join forces with FNDZ to provide easy and secure access to DeFi copy trading by adding an identity layer to the FNDZ platform.” ~ Julian Leitloff Co-Founder and CEO Fractal.

Looking towards the future

The partnership between Fractal and FNDZ will bring significant benefits to users and aspiring traders by giving them full ownership and control over their personal data. KYC will not only make it safer to use FNDZ but also reap much-needed approval and support from financial regulators as we seek to build a better financial system of tomorrow.

About Fractal

Fractal’s mission is to empower and incentivize users & businesses to exchange data in a privacy-preserving way so that the balance of power and control between web platforms and their users is restored. Find out more in their roadmap for 2022. If you are interested in exploring how KYC and decentralized identities can help you and your business, reach out to sales@fractal.id or book a meeting with their team.

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