Astra Protocol Is Helping To Ensure Regulatory Compliance For Crypto Firms
The rise of cryptocurrencies has taught the human race a lesson: humans love to have control—over their money, lives, sustenance—and they would do anything to stop other people take control of these things.
This shift in consumer behaviour was made swift by the pandemic, which caused a colossal failure of the capital market, causing investors and the average person to look for ways to save their money from the ensuing inflation. Assets like Bitcoin, Ethereum, Solana have noted incredible price performance since the start of the year. While new digital asset classes like NFTs are also booming, ushering in a new way to invest and consume art.
But as we continue to witness a change in how we transact and use money, there’s been a surge in new crypto projects on the Blockchain. Chiefly among them are DeFi projects which seek to decentralize the way we transact and perform other activities offered by legacy systems like banks and other credit institutions. According to DeFi Prime, there are currently 243 DeFi projects listed. Ethereum has the most significant piece of the cake, with 220 DeFi projects built on it.
With this rise in projects, there is one disadvantage of cryptocurrencies and decentralized finance: the lack of legal certainty and consumer protection. Cryptocurrency ownership provides financial independence, but it also comes with a slew of duties and risks.
Regulations, sanctions, and garnishee orders
Legacy systems have, over the centuries, had a chokehold on how people spend money. Different laws and regulations guide currency exchange, loans for businesses, insurance schemes, and other vital business forms. These laws are also driven by jurisdictional powers, which makes them bordered on a single territory.
Cryptocurrencies are borderless, and hence, the rising adoption. They offer a world where users don’t have to contend with numerous and sometimes meaningless regulations, sanctions, and even garnishee orders that might lead to losing access to funds.
With DeFi’s growing popularity comes an uptick in hackers, exploits, and other forms of illegal conduct, which regulators are anxious to regulate. Regulatory agencies are currently working to prosecute projects that are breaking the rules or committing fraud.
DeFi is too high-risk for major firms since there are insufficient restrictions in place to safeguard customers. What’s needed is trust and a peace-of-mind assurance layer that bridges the crypto and real-world worlds.
Enter the Astra Protocol, which intends to add an on-chain layer of assurance and safety.
Smart contracts, which automate a decentralized decision-making system, are a common aspect of every decentralized blockchain project. It is an essential component of any decentralized system, including DeFi, because it instils trust in the project as a safe investment. However, there needs to be a regulator or a regulating protocol that helps remove doubt, eliminate fraud, and deal with disputes, making public blockchains safe for all users.
This is what the Astra Protocol tries to solve.
The Astra Protocol says they offer a unique mechanism for decentralized businesses and firms to adhere to global regulations and regulatory guidelines while still allowing platforms to stay decentralized. Astra aspires to give much-needed certainty in the crypto and blockchain ecosystem at a critical time where there is so much distrust.
Funds are said to always arrive safely at their intended destination, thanks to ASTRA. The protocol can rapidly resolve the problem and return the funds with minimal friction in a mishap. Adding a dispute clause to the platform and smart contract, also known as Proof of Trust, can help to resolve any disagreements amicably.
Astra Protocol provides an on-chain dispute resolution service by adding a legal assurance layer to smart contracts. Before a transaction can be completed, both parties must agree to employ Astra, making it the default mechanism for resolving all potential conflicts. The protocol uses a combination of human expertise and technology to secure all transactions.
At first, new forms of money will undoubtedly generate some misunderstanding. This protocol helps decentralized businesses to follow the SEC and other regulatory authorities worldwide, which can be accomplished without sacrificing decentralization.
DeFi confronts distinct challenges that require unique solutions. The Astra Protocol adds security and transparency to contracts, protecting investors’ assets and helping to resolve disputes.
This article was published in partnership with the mentioned companies. Please ensure you do your own research.