How Crypto Backed Loans Are Secured

What is the most important thing we at CoinRabbit are focused on? As a crypto lending service we believe that security and safety of clients’ funds is definitely the most important part of our job. 

While being a fast and simple crypto lending solution, confidence about being as secure as possible at any moment of time is something we always keep in mind and constantly try to improve. 

In this article we would like to share some insights about how we execute security of funds at CoinRabbit.

Without further interruption let’s take a closer look at CoinRabbit security: it’s layers and what is planned to be implemented later, external and internal security solutions, how do we keep the funds safe and everything else related to the topic.

Crypto Lending Security Explained 

To keep the funds safe several security measures are used. All of them have their own unique purpose, and all together provide solid security of funds. Here is the list of solutions:

Risk Control System

To keep all the transactions secure and under control we have implemented several discrete mechanisms that are used to execute all the system operations:

• The first mechanism checks all the incoming transactions via its hash in the blockchain;
• The second executes all the additional and preliminary calculations and confirms all the economy to be correct up to all the decimals;
• The third confirms the data and signs it. If any hash sum divergence appears then system alerts occur;
• The fourth mechanism blocks all the system and automatically notifies core team members about an emergency accident to be solved.

Risk control system is our self-developed solution that automatically provides additional security layers for all the operations and transactions of our clients.

Additional Security Layers That Prevent Any ‘Shady’ Activity 

All the funds are processed distinctively instead of being sent to the destination address instantly. We use a system that generates a unique address for all the transactions. Pending funds are checked to be legitimate (AML security level), and pass a blacklist security layer (the list of blacklisted addresses is being constantly updated).
Passing KYC is optional since we believe that cryptocurrencies should provide people with a fast and easy access to financial operations. Nevertheless, if the transaction, wallet address or any other information looks suspicious the KYC becomes required.

Cold Wallets Based Storage 

To keep clients’ funds safe we use a system of cold wallets. These wallets can be accessed exclusively by a few members of the team. Any kind of operations with the wallets should be approved by all the other members having the access before being executed. It provides an additional security layer. A part of the funds is always available for withdrawals at any moment of time. It is important for us to provide our clients with an opportunity to receive their collateral as soon as needed.

Working with Binance Directly

We use the services of the largest cryptocurrency exchange Binance for the initial temporary cryptocurrency storage. Though the funds are being kept there only for a limited amount of time it is essential to work with the projects who already have earned its trust in the market and cryptocurrency sphere. 

Protected High-Yield Passive Income

The essential part of our work is that all the loans we provide are backed by the collaterals. It is not a financial pyramid, and we do not provide cryptocurrency backed by a “thin air” or any other sort of “miracles”. Easy as that — one collateral backs one loan given out. It makes the whole system stable and rock-solid and protects the terms, APR (annual percentage rate) and other conditions of CoinRabbit loans from being changed on a daily basis.

24/7 Customer Support Service

With all the security layers mentioned above we still have professional and accurate customer support service ready to help you with any occured problem at any moment of time let it be early morning or deep night.

What kind of tech is used to securely keep the crypto  funds?

Along with previously mentioned security solutions and layers we also applied additional technologies to amplify the safety:

• Hetzner dedicated root server using ISO/IEC 27001:2013;
• CloudFlare provides us with CDN services, protection against DDoS attacks, secures access to resources and DNS servers and act as a reverse proxy for the website;
• SSL (Secure Sockets Layer) SSL certificate is a digital certificate that authenticates the website’s identity and enables an encrypted connection;
• AWS (Amazon Web Services) provides us with compute power, database storage, content delivery and various other functionalities;
• HTTPS (Hypertext Transfer Protocol Secure) additionally secures communication over a computer network;
• 2FA (Two-Factor Authentication) using Twilio is an electronic authentication method in which a user is granted access to a website or application only after successfully presenting two or more pieces of evidence (or factors) to an authentication mechanism;
• Geetest Captcha is a type of challenge-response test used in computing to determine whether or not the user is human.

What do we plan to implement to provide a deeper security?

While the whole process is highly secured there is a list of features that we plan to implement later to amplify the safety even more. Here is a short list of upcoming security improvements:

• Additional confirmation when logging to the loan page;
• BitGo-like insurance;
• Switching to a system of ledger multisig wallets.

The CoinRabbit team is constantly focused on providing our clients with the best possible security of our services and solutions. While keeping in mind our main distinctive features such as speed and ease it is our main goal to remain one of the most secure crypto lending services in the market.

Source: https://coinrabbit.io/blog/how-crypto-backed-loans-are-secured