A hook that allows Know Your Customer (KYC) verification in Uniswap V4 pools has sparked controversy in the community. This fuels discussions about the future of DeFi in the DeFi altcoin and crypto community.
Uniswap V4 hooks spark controversy in DeFi altcoin community
There is now a new hook for DeFi altcoin Uniswap V4 hooks, available in an open source directory. However, this sparks controversy within the crypto community. This hook allows users to pass a Know Your Customer (KYC) check before trading in a pool. A user on X criticizing Hook states that hook opens up the possibility of decentralized finance protocols being whitelisted by regulators. In this context, the user makes the following warning:
As I explained in all my articles from last year: It starts with the “KYC option” for LPs. And eventually it is moved to a “regulatory whitelist approved” database hosted off-chain. And then those without KYC are labeled as illegal terrorist money laundering. Stop deceiving the nobles.
Essentially, a hook is a tool that allows developers to customize a code without changing the main structure of the program. In Uniswap V4, this hook will allow developers to use KYC verification within the DeFi altcoin. Financial institutions use KYC procedures to verify customer identities and assess the risks involved. The primary purpose of KYC is to detect money laundering and terrorist financing activities.
There are also those who think it will be useful!
A KYC hook has been made available as an optional function in the directory of DeFi altcoin Uniswap V4 by a community developer. Non-Fungible Tokens (NFT) perform KYC verification. According to another X user, the hook is specific to liquidity providers. Additionally, it may even be useful for projects that need to comply with regulatory requirements in certain jurisdictions. The user expresses his opinions as follows:
Apparently you don’t understand how this works. Exclusive to the #1 LP. Some projects may wish to operate within the legal boundaries of the jurisdiction. 2 hooks can be made by community developers. You are throwing away something that has done more for “true DeFi” than anyone else.
Governments around the world are taking a closer look at DeFi altcoins and their transactions. cryptokoin.comAs you follow from , recently, the G20 group of the world’s twenty largest economies adopted a crypto regulatory roadmap proposed by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) that tightens crypto regulations. Altcoin Uniswap V4 offers customizable hooks. It is also expected to be available in early 2024, with access limited to governance-approved organizations.
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