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Can we save DeFi from being Centralized?

Let's discuss the difference between TRIO DeFi KYC and Uniswap v4 DeFI KYC Hook. 

Uniswap v4 allows specific exchange pools to introduce KYC checks: 



 This specific hook allows for a KYC procedure. So, you can add this to a pool. Now, everybody who wants to take part in a pool with this hook must undergo a KYC first. A KYC procedure is the ‘Know Your Customer’ procedure. Among others, it requires you to provide an official, government-issued ID. Currently, this hook seems ideal for US-enabled pools. It allows for KYC or a whitelist application. The latter is for users who want to join such a liquidity pool.  

From user’s perspective- this centralisation by the liquidity pool provider makes DeX no different from CeX (centralised exchange). The whole promise of DeFi is being spoofed! 

TRIO addresses this differently: each participating DeFi app. will carry the whitelisted addresses of its users, without knowing who the Identities behind them are. These addresses may be determined by the regulators only and they have nothing to do with DeFi itself. There is a compliance within the decentralising of financial app. 

All you need is this simple (side by side) smart contract to integrate with the DeFi smart Contract. This simple contract to include the following steps:

  • Initialise by 0.01 TRIO Tokens transfer from the preset TRIO minter address to the preset DeFi Smart Contract Address. 

  • Record the new Event of TRIO token Transfer from the new TRIO Token Sender to the preset DeFi Smart Contract Address. 

  • TRIO Token Balance=Amount of TRIO tokens Transferred+0.01 

  • Record new TRIO Token Sender Address into off-chain datastore using Oracle. (Note: this off-chain datastore has already been used for whitelisted addresses). 

  • Transfer TRIO Token Balance-0.01 from the DeFi Smart Contract Address to the preset TRIO Fees Address.  For example:

Solidity Smart Contract for TRIO Token Interface

pragma solidity ^0.8.0;

// Define an event to record TRIO transfers
event TrioTransfer(address indexed from, address indexed to, uint256 amount);

contract TRIOFeeTransfer {
    // Preset TRIO minter address (replace with actual address)
    address public constant TRIO_MINTER = 0xYourMinterAddress;

    // Preset DeFI Smart Contract Address (replace with actual address)
    address public constant DEFI_CONTRACT = 0xYourDefiContractAddress;

    // Preset TRIO Fees Address (replace with actual address)
    address public constant FEES_ADDRESS = 0xYourFeesAddress;

    // Function to initialize the contract (can only be called once)
    function initialize() public {
        // Transfer 0.01 TRIO from minter to DeFi contract
        require(transferFromMinter(DEFI_CONTRACT, 10000000000000000)); // 0.01 TRIO in wei
    }

    // Function to transfer TRIO and record data
    function transferAndRecord(address sender) public {
        // Calculate new TRIO balance (current + 0.01)
        uint256 newBalance = balanceOf(DEFI_CONTRACT) + 10000000000000000; // 0.01 TRIO in wei

        // Record the new TRIO transfer event
        emit TrioTransfer(sender, DEFI_CONTRACT, newBalance);

        // Send the updated TRIO balance back to DeFi contract (minus fee)
        require(transfer(DEFI_CONTRACT, newBalance - 10000000000000000)); // 0.01 TRIO minus fee in wei

        // Simulate storing sender address off-chain using Oracle (not implemented here)
        storeSenderAddress(sender);
    }

    // Internal function to transfer TRIO from the minter (assuming TRIO is ERC20)
    function transferFromMinter(address to, uint256 amount) internal returns (bool) {
        // Call the ERC20 transfer function of the TRIO token
        (bool success, ) = TRIO_MINTER.call(abi.encodeWithSelector(IERC20.transfer.selector, to, amount));
        return success;
    }

    // Internal function to transfer TRIO from the contract (assuming ERC20)
    function transfer(address to, uint256 amount) internal returns (bool) {
        // Call the ERC20 transfer function of the TRIO token
        (bool success, ) = address(this).call(abi.encodeWithSelector(IERC20.transfer.selector, to, amount));
        return success;
    }

    // Simulate storing sender address off-chain (implementation depends on Oracle)
    function storeSenderAddress(address sender) internal {
        // Replace this with your Oracle integration to store sender address off-chain
        // ... (implementation details)
    }

    // Function to retrieve current TRIO balance (assuming ERC20)
    function balanceOf(address account) public view returns (uint256) {
        // Call the ERC20 balanceOf function of the TRIO token
        (bool success, bytes memory data) = TRIO_MINTER.call(abi.encodeWithSelector(IERC20.balanceOf.selector, account));
        require(success, "Failed to get TRIO balance");
        return abi.decode(data, (uint256));
    }
}

// Interface for ERC20 token (replace with actual TRIO token interface if needed)
interface IERC20 {
    function transfer(address recipient, uint256 amount) external returns (bool);
    function balanceOf(address account) external view returns (uint256);
}

This contract defines functions for initialization, transferring TRIO with data recording, and internal functions for transfers and balance retrieval. Remember to replace the placeholder addresses and implement the storeSenderAddress function according to your chosen Oracle solution.

In conclusion:

The whitelisted addresses are created to be used by DeFi for access control. The TRIO Interface smart contract above is to be executed only once. The big difference is that the application remains decentralized and compliant at the same time! DeFi is saved!

 

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