How to deal with the high volatility and trust crisis existing in the current DeFi market

The platform employs a multifaceted review framework, incorporating on-chain auditing, oracle verification, and traditional financial reporting, to ensure the transparency and traceability of returns across diverse asset classes.

The verification and auditing mechanisms for CeDeFi asset returns are categorized into three distinct types:

1. Protocol Yield (On-Chain)

Characteristics: Fully on-chain, transparent, and publicly accessible.

Audit Method: Direct verification via blockchain explorers, enabling comprehensive on-chain auditing.

Advantages: Real-time data accessibility and clearly defined audit trails.

2. Centralized Strategic Assets

Characteristics: Involves trading strategies for crypto assets managed by centralized entities.

Challenges:

- Potential for opaque strategy logic ("black box" operations).

- Delays in performance reporting.

- Information asymmetry between stakeholders.

Audit Methods:

- Independent audits conducted by professional crypto auditing firms.

- Due diligence processes aligned with traditional financial standards.

- Periodic issuance of detailed audit reports.

3. Real-World Assets (RWA)

Three-Stage Audit Process:

- Traditional Offline Audit: Comprehensive compliance due diligence for the assets.

- On-Chain Asset Verification: Validation of off-chain to on-chain asset mappings using oracles and verification nodes to ensure authenticity.

- On-Chain Audit: Examination of the blockchain-specific attributes of tokenized assets.

Introduces an additional layer of verification for asset mapping, distinguishing it from on-chain protocol yield and centralized strategic assets.

This structured approach ensures robust oversight and fosters trust in the platform’s asset management processes.