DeFi Protocol
A smart-contract financial service such as lending, borrowing or liquidity provision; its activity requires contextual assessment.
What does it mean?
Low-risk category group
A smart-contract financial service such as lending, borrowing or liquidity provision; its activity requires contextual assessment.
The 14 categories in the AML4Tracker risk methodology, explained with documented examples. The groups below describe that taxonomy; they are not universal legal classifications or the numerical bands of a live report. Availability depends on the report and data provider.
How is this concept used?
DeFi contracts can support lending, borrowing or liquidity provision. Actual control, collateral, administrators and upgrade powers can differ across services; the label DeFi does not describe all operational risks.
Documented examples
Documented example
Aave V3: collateralised lending contracts
Aave V3’s official guide describes token supply and collateralised borrowing through smart contracts. These lending operations do not by themselves verify lawful fund origins or guarantee safe investments or returns.
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Documented example
Compound III: collateral and base-asset borrowing
Compound III documents borrowing a market’s base asset against supplied collateral. A transfer may represent collateral or repayment; it does not by itself establish common wallet ownership or an illegal purpose.
Publication date not confirmed · Source checked:
Connection to a wallet report
Identify whether a transfer is collateral, a loan, repayment or another contract interaction. Separate protocol activity from conclusions about the user’s identity or lawful source of funds.
A common misconception
Decentralized branding does not guarantee the absence of control, operational risk or unlawful use.
Related reading
Put the explanation in context
When you need a wallet report, open the application and follow its normal account and scan process.
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