Know Your Customer(KYC)
Identity verification requirements that financial institutions must perform to prevent fraud and money laundering.
In-Depth Explanation
KYC involves collecting and verifying user identity documents, addresses, and sometimes source of funds. Centralized exchanges require KYC; DeFi protocols generally don't. KYC creates a barrier to entry and privacy tradeoff but enables fiat on/off-ramps and regulatory compliance. 'KYC-free' has become a selling point for some services.
Related Terms
More in Trading & Markets
View all →Slippage
The difference between the expected price of a trade and the actual executed price.
Maximal Extractable Value
MEVValue that can be extracted by reordering, inserting, or censoring transactions within a block.
Sandwich Attack
An MEV extraction technique where an attacker places transactions before and after a victim's trade to profit from the price impact.
Frontrunning
Placing a transaction ahead of a known pending transaction to profit from the anticipated price movement.