As a company, Metallicus has always championed the idea of regulatory compliance – from the very beginning. As we see an increasing number of noteworthy cases of bad actors exploiting blockchains to harm honest users, we are confident that we’ve chosen the best path for our ecosystem since Day One.
To better enhance the security of our ecosystem and our users, and to better prepare for upcoming financial regulations, we will begin requiring all users who want to use the Proton Bridge to be fully KYC’d through a Verified Identity. This change will go into effect on July 30th, 2022.
Naturally, this might leave you with a few questions, such as:
- What is the Proton Bridge?
- What is KYC?
- Why is KYC now required for the Proton Bridge?
- What does this mean for me?
We’ll answer all of these questions below.
What is the Proton Bridge?
Every cryptocurrency is built on a certain blockchain. For example, Bitcoin has its own blockchain, Ethereum and several other tokens are built on the ERC-20 blockchain, and Binance-related projects are built on the BEP20 blockchain. When a cryptocurrency wants to go from one blockchain to another, it must pass over that blockchain’s “bridge.”
Using a blockchain’s bridge involves wrapping your cryptocurrency in the new blockchain’s native token, becoming a wrapped cryptocurrency. You can think of wrapped cryptocurrencies as a crypto that has been attached at the hip to a different blockchain’s token. As a result, that portion of crypto can be used on the other blockchain’s network, making it easier to integrate into dApps and other projects. For the Proton ecosystem, this involves becoming a Proton-wrapped cryptocurrency. Any token that becomes a Proton-wrapped xtoken is custodied 1:1 by Metallicus Inc., a regulated financial institution.
When you wrap a cryptocurrency in Proton it becomes an xtoken. Xtokens enjoy all of the benefits of the Proton blockchain, including:
- Instantaneous transactions
- No gas fees for end users
- The ability to process microtransactions
- Access to Proton Swap
- Easy integration into Proton dApps and projects
Proton-wrapped cryptocurrency (xtokens) means crypto that is faster, cheaper to use, and more accessible than ever before.
So, in summary, the Proton Bridge is how a cryptocurrency enters or exits the Proton ecosystem. Tokens crossing the Proton Bridge into our ecosystem become an xtoken and enjoy all of the benefits of Proton-wrapped cryptocurrencies; tokens crossing the Proton Bridge to leave our ecosystem are unwrapped and rejoin their native blockchain.
What is KYC?
A common industry term, KYC stands for “Know Your Customer” – it is a set of financial regulations that require financial companies to know the identity of their customers. Designed to reduce the risk of fraud, scams, money laundering, and other illicit activities, KYC regulations have been a mainstay across the financial industry and have been gradually expanding towards decentralized finance companies.
Proton provides a pathway for users to prove their identity to one trusted party. By doing so, they can receive a verified identity trust mark attached to their unique @name, allowing anyone who interacts with their wallet to know that they are a verified user. These interactions don’t result in the user’s identity being handed to anyone else; rather, they simply show who is in, and who is out.
Through the use of Verified Identities, Proton has made the process of becoming KYC-compliant incredibly easy. By following our step-by-step guide here, Proton users can verify their identity in just a few minutes.
Why is KYC now required for Proton Bridge?
To those who understand the shifting world of international regulatory compliance, and who know just how impactful it can be to every crypto project, this news will come as no surprise. As financial regulations begin to impact blockchain companies more in the coming years, many cryptocurrency projects will be scrambling to keep up and react to the latest new rule.
At Proton, we don’t like to react, and we don’t think it is smart business to take a wait-and-see approach. That’s why we are remaining ahead of the curve and setting the industry standard by becoming the most regulatory-compliant focused team in crypto.
We are serious about building a human-centric identity ecosystem. By using KYC functionality directly in the Proton blockchain, we have created a way for users to prove their identity to a single party, who can then prove that identity to other parties while protecting the user’s personal information.
Available in up to 140 different countries, Proton KYC is global. That means Proton will remain global, no matter what.
What does this mean for me?
That’s the million XPR question, and we have the answers. Beginning July 30th, 2022, all users who wish to use the Proton Bridge will need to be fully KYC’d. That means entering and exiting the Proton ecosystem, or wrapping/unwrapping a cryptocurrency, will only be accessible by verified identities. We’re happy to announce that thousands of our users have already verified their identities, so they don’t need to do anything further to continue using the Proton Bridge.
Thankfully, as we mentioned before, becoming verified on Proton is remarkably easy and accessible to people in over 140 different countries around the globe.
If you don’t want to become verified yet, you’re still able to use Proton! You have access to minting NFTs, swapping cryptocurrencies, yield farming, short staking, decentralized lending and borrowing, and more. However, you will need to have your identity verified in order to move cryptocurrency across the Proton Bridge in either direction.
While this might come as a surprise to some of our users, we know that a lot of you could sense that this was coming based on the latest happenings in the financial regulation industry. We have taken steps to make the KYC process as simple and easy to navigate as possible, and our Support Team remains ready to help you with any question you might have.
New to Proton and ready to get started? Get WebAuth on Web, Android, and iOS for free with just a few clicks. Setting up your WebAuth Wallet gives you access to NFT marketplaces, cryptocurrency swapping, staking, yield farming, decentralized lending and borrowing, and so much more – always without gas fees.
Be sure to follow us on Twitter to let us know how you’re doing, keep up to date on the latest announcements, and meet more people from the Proton community.
Welcome to Proton, we’re glad you’re here.