The Future & Advantages of DeFi Crypto Exchanges | Jumbo Exchange Interview

James West: Yeah. Okay. So then in terms of KYC and AML provisions under US law, does the jumbo exchange make that possible?

Alex Yavlikhov: So right now, there are a couple of workarounds in terms of KYC. So KYC is your customer. You basically upload documents ID and so on to verify yourself. When it comes to KYC you basically need to verify and check the transactions, know your transactions, instead know your customer, know your transaction is basically you check and vet every transaction within the blockchain on the, and so in this case of example, exchange, we’re trying to make compliance more so on the side. So we, we have kwak approach. So for example, when a user when a malicious user or actor tries to interact with our exchange they’re, they’re trying to launder assets that are not necessarily clean. They might not be able to interact with our exchange because our system, our builtin system of KYC and AML this allowed him or her to basically interact with our exchange. We not trying to a user himself, it would to, it would basically that we’re impinging on the blockchain idea. So we’re, we’re not doing that. We know that it can cause backlash. So the idea we kinda came up with is KYC.

James West: So then the transactors on your exchange are basically writing a smart contract according to your protocol and connecting their, their, their offline wallets to fulfill the fulfillment of the contract.

Alex Yavlikhov: So how it works on Dex exchanges, you connect the wallet when you connected the wallet, you can see on the user interface what kinda liquidity pools you have. Liquidity pool is basically assets that are contained within the, this pool. So you have, for example, U S D to Ethereum, for example, you need to have a certain amount u certain amount of Ethereum. The great thing about again, exchanges is that those assets pool to be withdrawn and cannot with, without basically in, in any case. So that’s a great thing about defi. So you connected your wallet to the decentralized exchange and you can basically do the same as on central exchanges. But the with right now, you know, you know u user experience is basically not great. So what we’re trying to rectify in our case is to make it more so approachable and more so convenient to users because the main people have about defi is that is just not convenient. Mm-Hmm.

James West: So I guess then the user of the jumbo exchange has to have a high degree in the confidence of the security between the platform itself and their wallet, because I could see where that must be a weakness potentially for a bad actor to exploit that connection and potentially access a wallet improperly.

Alex Yavlikhov: So when it comes to wallets, everything that is related to wallets, it’s at, at, at the user discretion. So we can’t, with user wallet in any way, they just connect their wallet to our exchange. There is a bit of that needs to put in place. For example when you connect your wallet, you expose yourself to certain risks that, that is, for example, how people get caught into fishing exploits. They connect their wallet and their assets just in, in a, so there’s definitely a certain trust you need to put when you connect to a certain decentralized application. So that, that’s a very great point that you brought up that you definitely need to build that trust throughout the throughout your kind of cycle. So the great thing about that, that since you connected once and you didn’t get oni, you know that if you connect the second you also the next time, for example. So that’s a great thing about