Learn about Mauve in one article: a compliant DEX for Coinbase investment
The aftermath of the FTX incident has spread to the entire global financial market. As the saying goes, "good things don't go out, bad things spread thousands of miles." The reputation of cryptocurrencies and Web3 has been greatly hit by this incident, and the supervision of DeFi is nowhere in sight.
Everyone has their own views on how to rebuild the image of the entire industry and restore public confidence. There are not only the establishment of proof of reserves like Binance, which is directly open and transparent to the world, but also the launch of the "Crypto 435" initiative like Coinbase, which conveys the voice of the encryption industry to Washington and U.S. state legislators and regulators, promoting and influencing The way they make decisions about the future of cryptocurrencies and DeFi.
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Bringing Compliance to DeFi with Violet ID
Mauve is an AMM DEX that will be built on a non-custodial architecture carried by smart contracts that have undergone strict audits and time tests, enabling users to keep their funds in their own hands and earn LP benefits through liquidity pools.
These things are not special. Other DEXs can also do it. The real killer feature of Mauve is to provide fully compliant transactions while having high privacy and providing non-custodial services without trust.
Mauve takes KYC as the premise and strives to achieve full compliance. For this vision, identity verification and user compliance check services are particularly important. These are completed through Violet ID, a user identity information service created by Mauve's parent company.
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sanctions check
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KYT（Know Your Transaction）
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Geofencing
Confirm the location at the time of registration and the location at the time of the transaction, proving that the user complies with the terms of service (eg not a US user) and has not moved to a geographically sanctioned region.
All user data used by Violet ID is encrypted and stored off-chain and will not be uploaded to the chain. Violet ID will only send a binary compliance identifier on the chain, and this will bring on-chain compliance that users absolutely cannot bypass.
Through smart contracts, each transaction of Mauve will only be executed when the user meets two conditions at the same time:
1. Use 2 FA (two-factor authentication) to verify the registered identity;
2. Pass a compliance check that occurs every 24 hours.
Mauve combines the compliance guarantee of traditional finance with the advantages brought by DeFi. They call this form "protected (protected) DeFi", hoping to let high-quality users who are still on the sidelines and meet high compliance requirements enter DeFi world.
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What is the meaning of compliant DeFi?
In the FTX incident, user funds were misappropriated by centralized institutions, resulting in thunderstorms and insolvency. DeFi, which has the characteristics of self-hosting and decentralization, has been given the mission to solve the centralization problem since the beginning, but the promotion of DeFi is full of dangers.
Tornado Cash developer Alexey Pertsev was arrested by the Dutch police in August 2022 on suspicion of assisting money laundering and has been in custody since then, with several extensions. Although most of the current DeFi products are alive and well, the height limit pole on the driveway is always there, and we will all touch it one day.
DeFi still has room for growth of tens or even hundreds of times. In order to meet the upcoming growth, DeFi must interact with the traditional financial market, so that traditional financial users can reach themselves. Many traditional financial institutions have said that their main hesitation is regulatory and compliance issues, and institutions need compliance guarantees that can be embedded in the blockchain.
The industry has been talking about promoting compliance, integrating supervision, and attracting institutions for several years, but how to make DeFi compliant has always been a thorny issue, and Mauve was born for this.
True believers in decentralization may think that Mauve, which actively caters to regulation, is a "leading party" and do not want the "protected DeFi" proposed by Mauve to become the future of this industry. However, the arrival of real decentralization and real DeFi may require a 10-year wait. While retaining the essence of DeFi as much as possible, the immediate sacrifice may not be necessary, but it is by no means unacceptable.
