Problem

Zekret tackles significant compliance challenges across various DeFi ecosystem segments, addressing the critical gaps in regulatory preparedness among institutions, DeFi projects, and developers.

There are four key problem areas faced by institutions, projects, developers, and users. We can explore them one by one.

Institutions

Institutions are increasingly interested in integrating DeFi solutions but are hampered by the daunting complexity of regulatory landscapes like MiCA. They face substantial risks, including financial penalties and reputational damage, for non-compliance, making it practically impossible to manage risk, and, thus, get involved.

It is simply too difficult and costly to bridge the gap between a poorly explained and constantly changing crypto industry, and poorly explained and constantly changing regulatory frameworks.

DeFi Projects

A significant majority of DeFi projects, over 85% according to our research, are not compliant with upcoming regulations like MiCA. This lack of readiness poses threats of shutdowns, financial losses, and restricted market access.

Moreover, DeFi cannot grow or scale effectively with regulatory issues looming above it; being one of the only useful narratives in crypto, this needs to change.

Developers

Developers are often at the front lines of innovation but lack the resources or knowledge to ensure their creations comply with stringent regulations, which can stifle development and delay market entry. Crucially, it can destroy a project once it launches, in particular successful ones that attract a lot of attention, and cause significant legal problems for the founders.

Users

If projects offer regulatory compliance, it is often at the cost of user data and privacy: once you do KYC, your details are shared with whoever asks for them. In crypto, this isn't necessary with ZK proofs, alas, it is rare to find a compliant project with ZK proofs as it's that extra bit more difficult.

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The stark reality of the current crypto landscape, where a vast majority of projects and their users face significant compliance challenges, underscores the need for a solution like Zekret. By bridging the gap between innovative blockchain solutions and stringent regulatory demands, Zekret not only protects its partners from potential legal repercussions but also positions them for success in a rapidly maturing market.