- Astra Protocol says it will help in adding on-chain layer of assurance and safety to blockchain, crypto, and DeFi.
- It explained that it will provide a reliable mechanism for decentralized businesses to follow regulations while remaining decentralized.
The world has seen the rise of blockchain-based platforms and virtual currencies. Astra Protocol says this teaches one valuable lesson — that humans love to maintain control over their assets and everything else; that it is engraved in human nature. The COVID-19 outbreak also caused a shift to consumer behavior, which brought forth setbacks in global capital markets. If one can recall, the financial markets crashed drastically since the pandemic started. As a result, investors and average people looked for reliable ways to save their assets from crippling inflation.
This is how other cryptocurrencies aside from Bitcoin (BTC) rose — take Ethereum (ETH) and Solana (SOL) for example. The astronomical increase of the prices of digital assets, as well as NFTs (non-fungible tokens), is evident today. However, important regulatory challenges are yet to be addressed.
Furthermore, decentralized projects (DeFi) have also emerged as a high-potential financial services sector. In detail, it aims to fully decentralize how people transact and carry out business activities. DeFi Prime data states that there are around 243 DeFi-related initiatives currently listed. Here, Ethereum takes up most of the market shares with 220 projects developed on top of the Ethereum platform.
The steady rise of crypto projects, moreover, has one key drawback according to Astra Protocol — the lack of legal certainty and adequate measures to ensure consumer protection. Sure, crypto-asset ownership offers financial independence and well-being but it also comes with serious potential risks.
Crypto Regulations, Sanctions, and Other Compliance Measures
Today, legacy systems have maintained a firm grip on how consumers and businesses perform monetary transactions. Along with regulatory frameworks, the two oversee global currency exchange, loans for business, insurance services, and other business activities. These laws are supported by jurisdictional requirements, which makes them confined and limited to a single physical territory.
Because cryptocurrencies are permissionless and borderless, consumers are allowed to engage in cross-border transactions — sometimes without relying on intermediaries to finalize transactions. The entire ecosystem of cryptocurrencies does not have strict regulations, sanctions, and other measures; which could somehow result in losing access to funds.
The rising popularity of DeFi adoption entails an increase in malicious hackers consequently — along with damaging exploits and other types of illicit activities. This is one of the reasons why regulatory authorities are keen on regulating the nascent sector. Regulatory authorities have been working on taking disciplinary measures against projects that engage with financial crimes.
Providing a Robust “Peace of Mind” Assurance Layer
DeFi is considered a very high-risk industry for big companies. There are inadequate measures in place to ensure that consumers are protected from abusive activities. Hence, what the nascent sector needs is a high level of trust and robust peace of mind assurance layer — this can bridge the gap between the crypto industry to the broader financial sector.
This is where Astra Protocol comes in.
According to Astra Protocol, the team aims to add an on-chain layer of assurance and safety. They explained, smart contracts which automate business logic in a decentralized manner, are now the key aspect of almost all decentralized blockchain platforms.
To clarify, smart contracts are key components in any decentralized system like DeFi. It helps in establishing trust in a safe investment. However, it is yet to have a regulator or an oversight function for monitoring decentralized protocols that effectively eliminate doubt, potential fraud, and a proper dispute resolution system. All these features, moreover, would make a way to have public, permissionless, blockchains for everyone — this is exactly what Astra Protocol wants to give.
The Astra Protocol team further stated that they,
Provide a reliable mechanism for decentralized businesses to follow appropriate regulations while allowing platforms to remain sufficiently decentralized. Also, they aim to give certainty in the crypto and blockchain sector at a critical time, when the market is maturing and also when there’s been an increase in distrust.
Here, the team also noted that the funds will arrive safely at their promised destination because of ASTRA. To add on, the protocol can also quickly address problems and return the money with minimal friction — if and only if there is a mishap.
Astra Protocol offers an innovative, on-chain dispute resolution system by adding a legal assurance layer to blockchain-based smart contracts. The explained that before a transfer is finalized, the parties have to agree to work with Astra protocol — hence, making it a default mechanism in handling any conflict. This protocol indeed leverages human expertise and the latest tech to secure all transfers.
Moreover, by integrating a dispute resolution clause on a platform, along with smart contracts, often dubbed as Proof of Trust, projects will be able to manage disagreements amicably.
The emergence of new forms of money is expected to create challenges. In fact, this is a natural part of the adoption and transition phase. With Astra Protocol, decentralized companies will be able to adhere to regulations that are outlined by the U.S. SEC and other regulatory authorities worldwide.