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Provide users with protections over protocol access for compliance, while ensuring composability with the rest of the DeFi ecosystem
Liquid Collective is designed to provide users with protections over protocol access via know-your-customer (KYC) and anti-money-laundering (AML) verification, while still ensuring composability with the rest of the DeFi ecosystem.
This facilitates compliance by providing the level of counterparty risk management required for enterprises and institutions to participate in staking on the protocol.
The Liquid Collective protocol:
- Requires users to be on the allowlist before they can deposit ETH or redeem LsETH
- Enables users to transfer LsETH freely
Liquid Collective works with a variety of Integrators, including trading venues and custodians, to provide a seamless on-ramp for the protocol’s stakers. KYC’d users who utilize an Integrator’s services to allowlist their wallet can deposit to Liquid Collective and mint LsTokens.
Participation in Liquid Collective's smart contracts is restricted to allowlisted wallet addresses. This is meant for compliance purposes, ensuring that any user who wants to stake first completes a review and approval process (typically a know-your-business (KYB)/ know-your-customer (KYC) process).
The Liquid Collective Allowlist smart contract holds:
- An Allowlister, which is a trusted party responsible for allowing users to participate in the Liquid Collective protocol. Typically Integrators (ex. a custodial Integrator performing KYC/AML checks on their customers) submit depositors' wallet address to the Allowlister for subsequent addition to the allowlist
- An Allowlist of depositors with their permissions over the protocol (deposit, withdraw)
When a depositor wants to stake with the Liquid Collective protocol, their address must first be added to the allowlist and be granted the corresponding permissions. Currently, all Liquid Collective Integrators are Allowlisters.