In this use case, we cover:

• Users have no way to protect themselves from tainted assets
• How do ‘tainted’ assets make their way into regular wallets?
• What is DOP?
• What are ‘smart bouncers’?
• Why do users turn to DOP for Safety?
• How do users interact with DOP?

Introduction: Users have no way to protect themselves from tainted assets

Sometimes, exchanges allow users to deposit their assets and trade on the platform, but once they want out, they won’t be able to withdraw their funds. 

Why? 

Their wallet has been ‘tainted.’ This means that somewhere along the route of coins into the holder’s wallet was an asset (or a wallet) linked to illicit activity.

The user probably doesn’t even know their wallet or tokens have been tainted. The flagging could have happened so far back along the assets’ way that it will take a string of reversed transactions to find the link to the first tainted wallet. 

Fortunately, DOP helps its users avoid this issue.

Here’s how.

 

How do ‘tainted’ assets make their way into regular wallets?

Often, users fail to protect themselves from being stuck within the tainted wallet circle.

Sometimes, bad actors might purposely send small amounts of tainted assets to wallets, making it impossible for others to withdraw their assets later.

This may happen as a random airdrop or transaction to a Web3 newbie who kept their wallet for months, sending out transactions and making all wallets they send assets to ‘tainted’.

 

What happens when a wallet is flagged as ‘tainted’?

Once one trader’s wallet is connected to any sanctioned or blacklisted wallet, that trader’s wallet is at risk of being flagged or even blocked from exchanges. This often means that withdrawing funds from that wallet will be extremely difficult. It puts a user at a disadvantage because even if they have millions in their wallet, they can’t transfer funds somewhere else or exchange them for fiat if they need to use them.

On many exchanges, wallets can accept tainted assets and even send them to others within the exchange, creating a ripple effect of marking consecutive wallets.

The problem arises only when a user tries to take the assets out of the exchange and is blocked from doing so.

DOP takes a different approach.

DOP prevents tainted assets – as much as possible – from entering the DOP ecosystem.

 

What is DOP?

DOP redefines data ownership in the blockchain era. It recognizes that data safety is a primary user right and integrates selective transparency. It lets users choose what data to encrypt and share, with whom, and when. With zk-SNARKs and ECDSA, DOP validates transactions without revealing the underlying data. 

DOP introduces the idea of ‘smart bouncers,’ which aim to safeguard the ecosystem from tainted assets.

 

What are ‘smart bouncers’?

Thanks to the partnership with Chainalysis DOP has introduced the idea of ‘smart bouncers’ – guards at the entry of the ecosystem who try to ensure no tainted assets get in. This way, assets from criminal or suspicious activity are blocked before entering the ecosystem. DOP stays compliant by drawing user assets into one pool and allowing encrypted transactions within the ecosystem. 

The DOP smart bouncers work in the following way:

1. A user gives their DOP wallet address to receive a transaction
2. The sender sends the assets to the DOP wallet
3. Before the funds enter the ecosystem, Chainalysis’ software checks the sender’s wallet and assets for any red flags
4. If the assets and wallet are clean, they enter the ecosystem, and a zero-knowledge proof record is made of how many assets a given DOP wallet has.
5. If the assets are flagged, Chainalysis’ software rejects the transaction and protects the entire DOP ecosystem from allowing tainted assets.

 

Why do users turn to DOP for safety?

When using DOP, users can be more confident that their crypto portfolio or wallet will not be tainted.

 

Users turn to DOP for safety because:

• • The ecosystem is ‘clean’ – DOP uses the most advanced tools on the market to protect the ecosystem from harmful actors.
  • They know they will receive clean funds – DOP users don’t worry about receiving illicit transactions or using money from criminal activities. 
  • They don’t worry about not being able to use or withdraw their assets – because all assets within DOP are ‘clean,’ users will be restricted from withdrawing money from DOP or moving it to a wallet or an exchange due to the assets being tainted.
  • They benefit from faster transactions and lower gas fees – DOP takes transactions off the main chain (Ethereum for now), resulting in more significant throughput and lower transaction fees.
  • They are part of the revolutionary blockchain data ownership and security movement.

 

How do users interact with DOP?

DOP has streamlined the user experience, ensuring that everyone can easily engage with the platform and take full advantage of data ownership. The user-friendly interface is designed for simplicity, eliminating the need for technical expertise.

 

Currently, DOP works with Ethereum and MetaMask, but it will become chain-agnostic and integrated with most wallets on the market.

 

Users interact with DOP by:

• Setting up a DOP wallet.
• Connecting their external wallet to DOP.
• Choosing what assets they want to encrypt (or decrypt).
• Sending and receiving encrypted assets.
• Choosing who can view what data and when. 
• Providing their DOP wallet address for all transactions to make sure they only handle clean assets.