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Blockchain

Sakhib Waseem on the Future of DeFi

We at Astra Protocol are enormous proponents for building trust in DeFi to encourage a safer, fairer market for everyone. Here, we share some thought-provoking words from our very own Sakhib Waseem, Chief Innovation Officer at Astra Protocol. Sakhib is an executive-level technology expert in the finance and blockchain sectors and has worked with major financial institutions, designing and implementing multiple transformative technology-driven solutions from inception. On discussing the future of DeFi, Sakhib had this to say.

“The future of DeFi hangs in a delicate balance. Many projects have proven that decentralised technology can build a new financial framework based on independence, placing financial freedom in the hands of the community. However, we have also seen that many are susceptible to scams and failures without safeguards, which can lead to financial loss, damage the industry’s future value as a whole, and create an oppressive and restrictive view from many regulators.”

“WE AT ASTRA PROTOCOL ARE BUILDING A UNIVERSE OF TRUST.”

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“Decentralised regulation and governance layers are needed now. We need to merge the DeFi community and institutional worlds into a safe and prosperous industry. We at Astra Protocol are building a universe of trust designed to bring healthy regulation and governance to the market through dispute management without centralisation or prohibiting growth. Ultimately, we believe that allowing institutional participation will cause a further surge in DeFi projects and investment.

“DECENTRALISED REGULATION AND GOVERNANCE LAYERS ARE NEEDED NOW.”

DeFi is undoubtedly the future of finance.

“Dispute management and arbitration are just some of the many areas we are working on to grow the industry. By creating a trusted environment, we want to encourage people to get involved without fear of being caught out.”

Today regulators at the Financial Conduct Authority (FCA) have said in a statement that Binance cannot conduct any “regulated activity” in the UK. As it stands, Binance is still the world’s largest crypto exchange with multiple entities across the globe.

Nevertheless, the FCA is sending a clear message that cryptoassets and currencies are dangerous without a decentralised layer of protection.

DeFi is undoubtedly the future of finance, and we believe Astra Protocol is the next generation of assurance bridging the gap between authorities and the crypto world.

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Blockchain

Trusting DeFi

As DeFi projects such as lending, borrowing and decentralised exchanges have dramatically increased in popularity over the last two years, the market has grown to a staggering $88 billion.

As investors pursue the generous returns afforded by the market, the large influx in resources may also come at a price. Globally, crypto criminals ran away with $432 million within the first 5 months of 2021. About 56% of that, or $240 million were DeFi-related. There have been several instances where high-value ‘rug pulls’ have caused investors to lose out on vast sums of money. This is where, (largely anonymised) actors exploit hacks or faults within smart contracts in order to withdraw all funds from projects, leaving investors with no recourse to regain their stolen assets.

“FEAR OF MISSING OUT IS FUELING GROWTH AND AN URGENCY ASSOCIATED WITH PARTICIPATING IN DEFI, BUT THE DEFI SPACE OVERALL LACKS ADEQUATE DUE DILIGENCE, EXPOSING INDIVIDUAL INVESTORS TO SIGNIFICANT RISKS.” — CipherTrace CEO Dave Jevans

DeFi “rug pulls” and exit scams made up 99% of all crypto fraud schemes in the second half of 2020. Simple smart contract audits are not enough, as shown in the case of Compounder, where $10 million of funds were stolen by developers. Compounder was previously audited by Solidarity Finance, who found that elements of the smart contract contained ‘unnecessary risk’.

The mere existence of this possibility hinders the entire market from realising its full potential, with the unpredictable nature of the market proving too exposed for risk-averse institutions.

Trust [ truhst ] noun
reliance on the integrity, strength, ability, surety, etc., of a person or thing; confidence. Confident expectation of something; Hope.

The goal of ASTRA is to bring trust to the DeFi market and reassure all participants that their investment is protected against scams and traps. One revolutionary ASTRA feature is the provision of a legal layer in the protocol. Parties involved in a transaction both enter into a smart contract with ASTRA embedded. In the event of a party attempting to deceitfully withdraw funds, the legal layer provides a route to retrieving funds that would have already been lost without the incorporated ASTRA mechanism. With ASTRA, DeFi will become shielded from fraudulent activity, allowing the market space to experience the significant returns that attracts so many but removing the risk of unexpected loss.

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Blockchain

Trust in DeFi

DeFi’s popularity and innovation could be a significant concern to traditional banking and financial institutions that rely on outdated technology. If the last two years have taught us anything, people who are reluctant to accept change will be left behind. In the wake of the COVID-19 pandemic, businesses that adapted survived, and in some cases, even thrived, while others struggled and often couldn’t cope. The financial world will be no different. Blockchain technology, which has made Decentralised Finance possible, is only a few years old but has risen in popularity thanks to its innovation and potential to generate huge profit yields. Now, governments and corporations worldwide are investigating ways to incorporate blockchain, fearing that they will be at a significant disadvantage if they don’t. The financial world should be concerned about DeFi because it could really disrupt the status quo and bring more power and wealth to the public. According to the billionaire investor and owner of the Dallas Mavericks basketball team, Mark Cuban, if banks aren’t worried, they should be.

“ASTRA WILL ENSURE THAT INVESTORS AREN’T STUNG UNEXPECTEDLY.”

Provides a massive opportunity for investors to make a lot of money.

As one of the world’s most well-known investors and crypto enthusiasts, Mark Cuban is well-positioned to comment, “Aave is a completely automated, permissionless platform, where there are no bankers, no buildings, no toasters, no vaults, no cash, no holding your money, no forms to fill out, no credit ratings involved.” In short, Aave is very different to a bank but provides a massive opportunity for investors to make a lot of money. However, this means that people can get stung by investing in things they don’t fully understand or by smart contracts that have hidden traps in them. Mark goes on to say that “This stuff [DeFi Projects] is uber-complex and a lot can go wrong.” Somewhat ironically, the high-profile entrepreneur was himself caught out just a few days after making these statements. Cuban was a significant investor in Iron Finance’s Titan coin, which dropped in value from around $60 to just above zero within a few hours, meaning Cuban lost a lot of money in a short space of time. He blames himself for not doing the required research but admits he cannot tell if something more sinister happened. The team behind the Titan token have said the crash came as several big investors rushed to sell the token quickly. Still, others have suggested it could have come as the result of a “rug pull”, where investors’ money was taken out without them knowing.

ASTRA reduces the risk associated with DeFi projects and brings confidence to your investment.

In either case, this crash demonstrates just how risky DeFi projects and crypto investment can be. Even wealthy, high-profile and knowledgeable individuals with many advisors can still be caught out. The decentralised legal layer provided by ASTRA will ensure that investors aren’t stung unexpectedly. We want to establish trust for all DeFi projects by ensuring that the smart contracts that govern the transactions are secure. Regardless of how much you are investing, you can be sure that your transaction is protected against fraud, scams and malicious actors. ASTRA reduces the risk associated with DeFi projects and brings confidence to your investment.

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Blockchain

Secure your assets with ASTRA

Since 2020 the crypto world has been revolutionised by a massive spike in DeFi popularity. This innovative financial system is undoubtedly the future, as intermediaries are not necessary, profit margins can be enormous. More and more people are beginning to see that DeFi is here to stay, but they are also concerned about what might happen when things go wrong. There are inherent risks to building a complete distributed trust system, entirely governed by code, such as reversing transactions and recovering funds. Criminals have been able to exploit these weaknesses and take vast amounts of money from unsuspecting individuals.

Since October 2020, nearly 7,000 people have reported losses of more than $80 million in DeFi and crypto scams. That is around twelve times more reports and an increase of almost 1,000% in lost funds than the same period a year earlier. In many cases, fake websites lure would-be investors to part with their cash. Due to the nature of DeFi, these transactions are hardcoded into the blockchain and are incredibly difficult to undo. To fix the issue, we need a way to shield people from con websites and make it more difficult for criminals to operate. ASTRA is the solution that gives you protection against fraud and provides a unique mechanism to resolve issues if something goes wrong. For example, the padlock symbol that appears in the web address bar when browsing the internet indicates you are on a secure and legitimate website. Similarly, when you see that a cryptoasset or DeFi project has decentralised legal protection from ASTRA, you know that the offer is genuine and that there is simple and effective recourse if something unexpected happens.

ASTRA will revolutionise Decentralised Finance.

DeFi is still in its infancy, and much like the early days of the internet, people are scared of being caught out. Now billions of people in the developed world use the internet for several hours a day. In 2020 alone, online transactions grew by 80%. Online banking and e-commerce were once considered new age, high-risk and sometimes outright dangerous. But regulations came in, and internet security improved dramatically, which paved the way for the digitised 21st century we experience today. In the same way, ASTRA will revolutionise Decentralised Finance.

“ASTRA IS THE SOLUTION THAT GIVES YOU PROTECTION AGAINST FRAUD AND PROVIDES A UNIQUE MECHANISM TO RESOLVE ISSUES IF SOMETHING GOES WRONG.”

ASTRA provides the necessary security and peace of mind you need to invest in DeFi projects. Simply by knowing that this decentralised legal layer is embedded, you can be sure that transactions are entirely legitimate. As a result, if something happens to your money, you will be able to recover it quickly and at a reasonable cost. The Crypto world has often been termed the “Wild West” when it comes to investment. With ASTRA, DeFi and digital assets can become a safer and more reliable way to see significant returns on your venture.

 

 

 

 

 

 

 

 

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Blockchain

Bringing Trust to DeFi Projects

The enormous growth of the DeFi market since the start of 2020 demonstrates just how exciting the crypto world is. As more and more people delve into digital assets, investors recognise that there is a lot of money to be made. The crypto market is now valued at about $1.6 trillion. Unfortunately, this staggering valuation attracts not only honest investors but also fraudsters, scam artists and criminals on the black market. As there is very little regulation or protection offered to DeFi investors, crypto-assets can be extremely high-risk. ASTRA is the solution. By providing that layer of trust and security to crypto-assets and DeFi transactions — ASTRA ensures your assets, money and possessions are always protected.

Here are just a few examples of where ASTRA can be used.

Borrowing and lending

 

 

 

 

 


 

 

Borrowing and Lending Platforms

Borrowing and lending platforms, such as AAVE, have been the most popular DeFi use cases to date, with higher yields to be made compared with traditional borrowing. As always, these new products and services are not without risk. Many of the smart contracts that govern the loans rely on price oracles to insert the value of the assets at any given time. There is no guarantee that these are accurate, which means users could lose millions. ASTRA ensures that any disagreements can be resolved and that the borrower and lender are never out of pocket.

NFTs

Non-Fungible Tokens

The NFT market is rapidly growing and is currently worth billions of dollars. However, people are vulnerable to criminals and scammers who can still mint an NFT from a file that isn’t theirs and sell it to individuals who are none the wiser. The industry is on the verge of allowing real-world assets to be securely connected to the blockchain, but there is still substantial risk without legal accountability. ASTRA uniquely provides the decentralised legal layer that protects all participants in the sale of both digital or physical products. We ensure that off-chain assets, such as yachts, land, property, or any other high-value item, can be safely and securely connected to their virtual counterparts, enabling further market growth.

“ASTRA IS THE SOLUTION. BY PROVIDING THAT LAYER OF TRUST AND SECURITY TO CRYPTO-ASSETS AND DEFI TRANSACTIONS — ASTRA ENSURES YOUR ASSETS, MONEY AND POSSESSIONS ARE ALWAYS PROTECTED.”

Derivatives

Derivates

Traditionally, a derivative represents a contract where the value comes from an agreement that depends on how an asset (such as commodities, stocks or bonds) performs. DeFi and smart contracts allow investors to benefit from open, transparent and automated settlements for derivative contracts. However, disputes over derivates contracts are relatively common and could quickly arise because of a disagreement over how a particular calculation was performed. ASTRA provides a unique platform to resolve any issue or dispute on a derivative smart contract speedily and cost-effectively, bringing peace of mind to all.

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