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To bring blockchain into the mainstream, compliance is an unavoidable hurdle. But there's an awkward problem: traditional KYC and AML procedures inherently conflict with the privacy, openness, and permissionless spirit that blockchain advocates. What to do? Instead of passive compromise, it's better to think about smarter solutions.
APRO's answer is an adaptive compliance protocol—redesigning identity and transaction verification frameworks through programmability. The core idea is quite interesting: since not all interactions are equal, handle them in a layered manner.
Specifically: at the bottom layer, it is completely open. Fully anonymous, zero barriers. Low-risk, small-value operations like likes and social interactions in games, anyone can participate, maintaining the original nature of blockchain.
One layer above, introduce verifiable claims. Users can selectively obtain a zero-knowledge proof credential from licensed KYC institutions. This credential can prove that you have been verified and are not on sanctions lists, while your specific identity information remains completely hidden. Only when compliance is required does it come into play; otherwise, it’s as if it doesn’t exist.
The brilliance of this design is that it satisfies regulatory requirements without sacrificing privacy and openness. Instead of rigidly transplanting traditional finance rules onto the chain, it leverages blockchain’s inherent features to allow rules to dynamically adapt to different regional requirements. Users hold the initiative—privacy is not forcibly disclosed but shared only with their consent.
If this approach can truly be implemented, it could provide valuable insights for solving compliance dilemmas across the industry.