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STACKD Finance, a new project planning to make DeFi safer and more trustworthy, announced the release of its new utility, Advanced Verification Services (AVS). This feature aims to improve and even replace KYC, the current industry standard for user identification.
The announcement is the first of a much-anticipated series of utilities from STACKD Finance. The project has stated its goal is to bridge fiat and DeFi through higher security standards from its inception. AVS features three levels of identification, ensuring that projects, developers, and users pass the credibility test, which is increasingly necessary for the blockchain-based economy.
What Is AVS and How Does It Work?
Before we dive deeper, let’s refresh our definition of KYC, the standard STACKD Finance plans to replace.
Know Your Customer (KYC) is a set of procedures that help identify and verify the identity of a customer, project, or development team. Generally, a professional third party performs this service to help other parties determine whether a business relationship is trustworthy and viable. Lastly, KYC has a broader scope of preventing fraud and money laundering.
The STACKD Finance team believes that the current KYC procedures available in decentralized finance are not reliable enough. They consider KYC insufficient identification tools for multi-million dollar projects to gain or claim the necessary credibility.
Through Advanced Verification Services (AVS), STACKD Finance will perform additional checks. This way, it should increase the transparency and trustworthiness of the data people provide. Additionally, AVS runs criminal and financial background checks on a project’s leaders. Lastly, it will verify the project’s credibility, too.
STACKD Finance built AVS on two fundamental principles:
An individual or project successfully passing the AVS procedure poses a minimal risk of committing fraud. STACKD Finance believes that the more people and projects pass it, the safer DeFi can become. As a result, more developers and investors will have an incentive to enter the market.
The risk of someone passing AVS and still committing fraud is close to zero but never impossible. After all, credible project developers can still pull the rug from under their users and investors. STACKD Finance pledges its cooperation with the appropriate legal and investigative authorities in this unfortunate case. This way, STACKD continues to support its clients for better or worse.
Every entity (project or individual) passing the AVS procedure will receive a Certificate of Verification. This document should help projects prove their reliability and gain more traction. Additionally, it should help individuals demonstrate their good intentions when funding or accessing projects.
AVS Levels of Verification
STACKD Finance has established three levels of AVS procedures:
This procedure will verify a person’s identity, including a biometrics examination. The person will have to provide social media handles, mobile phone, and email address details to prove their identity.
This procedure will verify the project’s team leaders, establishing if they have legitimacy for their roles. Additionally, it will perform criminal and financial checks on these individuals to determine their reliability.
Lastly, this AVS level involves an extensive suite of verification procedures, expanding to the project’s entire team. Furthermore, anyone with access to the project’s funds will also have to pass this level. Most importantly, AVS will examine the project’s business plan, finance, smart contract creation, and audit.
The result of the AVS Gold verification will provide a comprehensive, transparent image of the project, its potential, and trustworthiness. STACKD Finance explained that successfully passing this level is not easy. However, once they pass it, projects will benefit from bulletproof credibility in front of their users and investors.
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