As the blockchain industry continues to gain adoption and further mature, compliance and adhering to regulatory frameworks is becoming increasingly important for any decentralised projects and ecosystems.
Luckily, seamless and advanced solutions are now available for dApps to scan and reduce the risk that sanctioned and potentially malicious wallets that may be performing illegal activities are interacting with dApps. Some of the most recognised and top projects in the space (such as Uniswap, Aave, Circle, WazirX, Bitget, and Mercado Bitcoin) have already adopted wallet scanning technologies that do this, and more projects are moving towards embracing this movement.
QuickSwap is always looking to stay ahead of the curve, with the goal to become more compliant and regulatory friendly.
Introducing Quadrata: a Web3 native solution that offers a privacy-preserving, sybil-resistant Web3 Passport and wallet screening service to bring identity, compliance, and reputation to dApps.
QuickSwap is looking to integrate Quadrata’s technology (only on the DEX frontend), which will scan and assess user wallets interacting with the DEX based on their own unique risk scores. This will ensure that certain wallet addresses, specifically those detected to be high risk or sanctioned, are prevented from entering/interacting within the QuickSwap ecosystem. Note that their screening technology would only apply to those trading $1,000+ (this amount could be lower based on the package QuickSwap would agree to purchase from Quadrata - more information in the “Agreement & Fee Structure” section below) and associated with a certain wallet screening score, to be discussed in more detail below.
In this governance proposal, the dragon community will discuss and vote on whether QuickSwap should integrate with Quadrata to increase the DEX’s global regulatory compliance standards by scanning, detecting, and prohibiting specific wallet addresses connected to potentially sanctioned or illegal/malicious activities. This would ensure that QuickSwap remains compliant with current legal and regulatory frameworks/requirements.
TL;DR:
- Top protocols and dApps such as Uniswap, Aave, Circle, WazirX, Bitget, and Mercado Bitcoin have already adopted wallet scanning technologies to stay up to date with legal/regulatory frameworks and remain compliant, suggesting that the blockchain ecosystem is moving further in this direction
- QuickSwap is looking to integrate Quadrata’s Web3 native solution that offers a privacy-preserving wallet screening solution on the DEX frontend to automatically scan and assess user wallets interacting with the platform based on their own unique risk scores
- Their technology will ensure that any detected wallet addresses connected to certain compliance and regulatory issues (i.e. sanctioned or interacting with illegal websites) cannot interact with the QuickSwap frontend
- This governance vote is for the dragon community to decide if QuickSwap should integrate Quadrata’s solution, which would be an important and essential move forward to allowing the DEX to be more compliant with legal and regulatory requirements
- To begin, the governance discussion on the official QuickSwap Reddit will run until Saturday, July 20 at 5:00 PM UTC
- Once the Reddit discussions finish, a formal Snapshot vote will begin and run from Saturday, July 20 at 5:00 PM UTC until Wednesday, July 24 at 5:00 PM UTC
- Once you’ve read this entire blog post, make sure to visit the official QuickSwap Reddit discussion forum to share your perspective with your fellow community members
What is Quadrata?
Quadrata is a Web3 native solution that offers an advanced wallet screener, which helps dApps screen for and prevent wallets associated with malicious actors from interacting with their platforms.
More information on how this technology would work if integrated on QuickSwap will be explained in the next section of this proposal.
How Would Quadrata Work On QuickSwap?
As mentioned, Quadrata would provide a frictionless screen to prevent sanctioned and high risk wallets from entering the QuickSwap ecosystem.
Their technology reduces the risk of QuickSwap users from dealing with bad actors and receiving illicit funds. The ultimate goals of this integration are to not only stay within legal, compliance, and regulatory frameworks but also protect the dragon community from malicious actors.
Here is a list of important features and considerations regarding what would happen if QuickSwap integrates with Quadrata:
- No customer onboarding is required and QuickSwap users will NOT need to provide any personal information
- Pseudonymity will be maintained to the same extent as today
- This means NOTHING will change regarding how users currently interact with the DEX
Below is a table outlining the ways and criteria Quadrata uses to screen wallets and assess risk. Note that only wallets trading $1,000 or above and with a screening score of 8 or more (wallets that have been identified to have stolen coins, associated with a sanctioned country, or engaged in activities such as involvement with terrorism financing) would be blacklisted from interacting with the QuickSwap DEX.
Agreement & Fee Structure
If the community votes in favor of pushing this integration forward, the following agreement and fee structure would be put in place between QuickSwap and Quadrata:
- QuickSwap would enter into a 1 year contract with Quadrata for the integration of their wallet screening technology
- The first month would be free of charge (if the contract is signed for 1 full year of services) and act as a testing phase
- After the first month, QuickSwap would pay Quadrata $10,000 per month for their services - these funds would be paid from the DAO
Note that during the first month of the agreement (i.e. the trial period) QuickSwap reserves the right to opt out of the contract. This 1 month trial would be to discover the best options to scan wallets and explore Quadrata’s packages to see if the minimum requirement to scan a wallet would be $1,000 or lower (TBD).
If QuickSwap decides to opt out of the contract, there would be a charge of $10,000 for the first month, to be paid from the DAO. If QuickSwap decides to continue with the agreement after the first month and signs the contract for 1 full year, the terms as outlined above would not change.
After the 1 year contract ends, re-negotiations would take place and another governance vote may be deployed.
Join the Discussion
As always, QuickSwap community members are encouraged to participate in and contribute to QuickSwap governance discussions and proposals across all of QuickSwap’s online forums, especially on Reddit. As a Dragon, you are a valued community member and your opinion matters – but you have to participate in community voting procedures to make it count.
Critical decisions guiding QuickSwap’s strategic development will always be determined by way of decentralised governance. QuickSwap’s future is in your hands, so make your voice heard!