Regulation will always be a looming concern for the crypto space as it continues to grow.
What started off as an industry frequented by tech nerds and cryptography enthusiasts, has now been adopted by the wider society.
As more and more everyday people start to experiment with decentralized finance, more opportunities for bad actors, fraud and money laundering present themselves.
To safeguard these everyday users, regulated DeFi tools and protocols are needed in the crypto space, from biometric identities, to digitized KYC and regulated stablecoins.
These concerns led to the partnership between Everest and Polygon, granting Polygon's users and developers access to a range of identity verification and DeFi tools.
Everest integrates With Polygon to bring regulated DeFi to the Layer 2 platform
Everest, a fintech company with blockchain solutions for identity verification and financial services, has partnered with Polygon, the leading Layer 2 scalability & development platform on Ethereum.
Everest's EverChain is now fully interoperable with Polygon's blockchain, bringing Everest's suite of regulated financial services to Polygon’s “Internet of Blockchains.”
This integration enables Polygon users and developers to access Everest's suits of ID verification and financial tools including:
- Biometric-based identities - Digital identities for crypto users.
- eKYC/AML - The digitized version of the "Know Your Customer" ID verification protocol
- Regulated $CRDT stablecoin - Enables hundreds of Polygon DeFi projects to process fiat currency
This is in response to the growing popularity of decentralized finance (DeFi) which has grown by over 1,200 percent in Total Value Locked in 2021.
Total Value Locked (TVL) represents the amount of money that has been locked into smart contracts through protocols such as staking, liquidity pools and farms.
The rapid growth of the DeFi space has attracted attention from regulators around the world, and this attention creates the need for more regulated protocols in the space.
The question is, which platform is best suited for providing regulated DeFi solutions? Let's look at Ethereum for example.
Currently, Ethereum stands as the most popular blockchain for decentralized finance.
However, it is still plagued by old problems, including high gas fees and low throughput.
Whilst this problem is being addressed by Ethereum developers (in the form of Ethereum 2.0), Layer 2 platforms like Polygon have developed their own solutions for solving the scalability problem.
Polygon's low fees, fast speeds and high transaction capacity make it a popular choice for DeFi users on the Ethereum network.
Since Polygon functions as a Layer 2 blockchain for Ethereum, users can use the Polygon protocol to execute their transactions faster and more efficiently.
This makes Polygon a good choice, this way users can benefit from Ethereum's wide range of DeFi protocols, whilst leveraging Polygon's speed and low transaction costs.
Polygon's partnership with Everest allows its users to access the following features:
- eKYC and a regulated fiat on/off-ramp - This enables users to easily move their assets between DeFi and traditional finance through Everest’s network of payment rails.
- Licensed and fiat-backed $CRDT stablecoin - This enables crypto to fiat transfers and interactions with traditional banking systems, as well as segregated institutional pools
- Shared resources - Immediate access to resources and addresses on both blockchains, making both of their ecosystems more versatile
Everest's integration with Polygon greatly expands the toolset available to developers building on Polygon.
This will enable them to create platform-specific DeFi protocols with native eKYC for customer verification and easy conversions between fiat and cryptocurrency.
The fiat on/off-ramp will be powered by Everest's regulated and programmable $CRDT stablecoin.
The $CRDT stablecoin allows developers to program it to represent any fiat deposit as well as limit its use to a specific purpose, timeframe or retailer.
Polygon users will also be able to store the $CRDT stablecoin in their native wallets.
Everest's CEO, Bob Reid explains how this partnership will bring regulated finance to Polygon:
“With interoperability between Everest and Polygon, partners and users can transact across fully-regulated bridges between DeFi and TradFi.
The new technologies will enable identity-driven services, new types of DeFi, and additional capacities to be built on the Polygon network,”.
Mr. Reid went on to say:
“Projects like Polygon are leading the way on this path, working to build the infrastructure for the next-generation economy.
We look forward to further integrations and innovation to bring new kinds of financial services to all EVM-compatible chains in the world.”
Final thoughts
Regulation in the crypto space looks more and more probable as adoption increases.
Everest's regulated DeFi protocols are the first step in providing regulated systems, and their integration with Polygon will bring these tools to a wide range of users.