Learning

Understand the risk of DeFI/Web3

Why do you need to understand the risk of DeFi/Web3? DeFi and Web3 are Decentralized and it does not have any regulator that can suspend a protocol uncontrollably, everything happens too fast such as dumping a token, exit scams, prices manipulated, exploits, etc. Risk Level of DeFi / Web3 Based on the image above, it’s clear that even projects with KYC (Know Your Customer) and audit certifications are not entirely risk-free. Several factors contribute to potential risks, such as the possibility of developers abandoning the project or the project selling a large number of tokens, leading to a significant loss in value. It is important to understand that no product or service can be guaranteed to be completely safe. This information is intended to inform you of the inherent risks. While the likelihood of these risks may be low, they still exist. Understand pre-sale project risk. Projects in pre-sale phases (selling coins or fundraising) carry high risks, even if they have been audited or undergone KYC procedures. The potential risks include: Risk of Project Abandonment: • Project owners might create pre-sale tokens to raise funds and then disappear once they have collected sufficient amounts, leaving the project abandoned. It is crucial to note that having a KYC or a smart contract audit does not guarantee the project’s safety. While KYC can help identify responsible individuals for legal proceedings, it is not a foolproof safeguard. If you fall victim to such a situation, take urgent and serious legal action in your area. Risk of Project Failure: • Projects may face unforeseen problems during implementation, leading to potential losses for investors. This is a factor that is difficult to control, and it is essential to understand and assess your risk tolerance before participating in any project. Risk of Token Price Decline: • Although pre-sale prices are often set lower than the anticipated launch price, there is a significant risk that the token price may drop below the pre-sale price. It is crucial to acknowledge and accept this risk before joining any project. Understanding these risks is necessary for making informed decisions. Always evaluate your potential and risk tolerance before investing in any project. ****** This article is learning content, Any content on scrl.io is not investment advice.

Audit & KYC is not mean safe why?

Why audit & kyc is not guaranty anything is safe? The primary reason is that even if all checks do not reveal any security vulnerabilities or code errors, fraud can still occur in various ways. These include hard-to-detect soft rugs, token-selling fraud, project abandonment after unlocking funds, and pre-sales without project launch. Auditing these issues is challenging, which is why every audit company includes a disclaimer stating, “Audit & KYC is not an investment advice document.” We always display this section prominently and continually remind everyone about it. What are the benefits of audit and KYC? For Smart Contract Audits, we evaluate security issues including severe vulnerabilities, code errors, and logical calculations. At SCRL, we utilize a variety of tools that are more efficient than those of other companies. Additionally, we provide advice on gas optimization and code improvement. For KYC, we are the first to use the Web3 wallet system along with Sanction checks, PEP checks, OCR, Facial Recognition, and Liveness Detection systems to verify identities. However, if any project completes KYC with us and is later found to be a scam, we may release their personal information and strictly cooperate with law enforcement agencies, as outlined in our terms of service. Always remember that KYC does not guarantee the safety or legitimacy of any project. ***For the KYC system, we have connections to international databases such as Interpol, FBI Most Wanted, Europol Most Wanted and external networks in more than 20 countries, using third party APIs that are in the top-tier of the crypto industry.

Engaging with contracts outside of the audit scope carries significant risks

Disclaimer This article is learning content, Any content on scrl.io is not investment advice. ***Please note that any projects appearing on our website It does not guarantee that any project will be safe and Smart Contract Audit / KYC is not an investment advice document. We are not responsible if any project is fraudulent / abandoned / exploited / scam. Please read the legal details: https://scrl.io/legal Why is interacting with smart contracts outside of audit scope risky? Even if a project successfully passes a smart contract audit, interacting with contracts outside the scope of the audit remains a substantial risk. A smart contract audit only guarantees the security and functionality of the specific contracts reviewed. If additional contracts or codes are introduced or modified beyond the audit’s scope, they could harbor vulnerabilities or unintended behaviors. It’s crucial to understand that the audit’s assurances do not extend to these unverified components, making it essential to approach any external or unvetted contracts with caution. It’s important to note that a smart contract audit or KYC process does not ensure that a project is a safe investment. Our services are strictly focused on evaluating code security and compliance. We do not provide investment advice or opinions. While our audits assess the security of the smart contract code, they are not indicators of the project’s financial viability or potential for investment. Always conduct thorough research and due diligence before making any investment decisions.