Minimizing Transaction Risks
Lists ways to minimize transaction risks
- Rolling audits will be conducted by external third parties to verify that all BTC Proxy tokens minted have an equal amount of assets stored among all custodian’s wallets. In the case of BTCpx, proof of reserves can be made visible with the publishing of signatures from the corresponding Bitcoin addresses store.
- Distributors and users can mint tokens by interacting with the smart contract directly. Hence creation or redemption of tokens will involve the user initiating and completing the process independently. This model eliminates any centralized counterparty risk.
- Distributors and users interact directly with the custodian without intermediaries.
- The existing credibility of the participating institution(s) is always at stake for the integrity of the framework.