In the case of fraud, this is typically premeditated, as in planned by the business owners or marketers in the first place with no intention of using user funds legitimately. YIELD App is a regulated entity, our people are in the public domain, and as an enterprise we employ rigorous business processes, compliance audits and oversight of all functions and people within the organization.
Other frauds are perpetrated by individuals, normally as a result of opportunities created by deficiencies in management, business processes, and organizational controls.
When considering hacking, this can fall into two main categories. It could be at an organizational level, i.e. the technology and data infrastructure, or at a structural level in the DeFi pools and smart contracts themselves.
YIELD App has identified critical systems, will continue to stress test these alongside market-related technology security scenarios to mitigate and remove points of failure across our operating environment, including DeFi instruments used in our portfolios. We achieve this through research, smart contract auditing, insurance coverage, in-house technology solutions, and by employing industry-leading experts in their field such as data security consultants. All of this is further supported by our various oversight, enterprise and risk management committees and frameworks.
While YIELD App takes all reasonable steps to mitigate risk associated with protocol hacking such as portfolio diversification to avoid concentration risk, combined with multiple insurance layers and the creation of an insurance fund to protect our users, the nature of digital currencies and smart contracts is such that it is possible for them to be compromised and are therefore not without risk.