The Ethereum-based trading protocol dYdX implemented a new feature called Liveness Check. According to an official post, the feature enables users to scan their “image” with a webcam and verified if it has been used to open a different account on the platform.

The feature is non-mandatory and has been implemented to prevent bad actors from taking advantage of promotions, according to the post. The team behind dYdX said:

If you have successfully completed the liveness check with a different account, you will be unable to successfully complete the liveness check again (…). Given that your Ethereum address functions as your account on dYdX, it is trivial to make more than one account. As such, it is quite difficult for a dApp to offer promotions without being Sybil-attacked.

The feature has sparked a debate in the Ethereum community as many believe dYdX is “crossing a line” by asking users to scan their faces to participate in promotions. At the time of writing, the platform is already using the feature to reward new users with $25 on their first $500 deposit.

In order to be eligible for the reward, new users must complete the Liveness Check. Then, new users will be able to claim their rewards.

The team behind dYdX claims they conducted research on the best solution to deter bad actors from launching a Sybil-Attack on their platform. Liveness Checks “offered the best UX for our users to indicate that they are, indeed, one person without revealing their full identity”.

The feature was called a “horrible idea” and a “bribe” for users to provide their personal information and receive money in exchange. Others believe the feature goes against the core values of Ethereum and decentralized finances (DeFi). Chris Blec, host of the “Proof o Decentralization” podcast said:

What dYdX is doing now is just wrong:

1) They’re misleading users on the intent.

2) They know that every face scan they’re collecting is from an innocent. A criminal won’t face-scan but can still use dYdX.

They’re bribing new users to give up privacy just to satisfy regulators.

Ethereum DeFi Changes, Adapts To Regulatory Scrutiny?

dYdX claims that the implementation of the feature was unrelated to regulatory pressures. In August, the U.S. Treasury sanctioned the decentralized exchange Tornado Cash forcing several Ethereum protocols to implement mechanisms to block addresses that have interacted with its platform.

The measures backfired as some users were automatically blocked without justification. Infrastructure providers Infura, dYdX, Uniswap, and others adopted these measures. Many users questioned the decentralized nature of these protocols.

Corey Miller, the author of the post about the Liveness Check and Lead Growth at dYdX, asked a critic the following on their biometric scan feature:

Honest question — what other ways are there to run sybil resistant campaigns in a web3 native way (that actually has good UX)? Goal being a new user wouldn’t have to leave the dYdX sign up flow to verify they are a human.

The data collected from the users will be under the control of dYdX’s provider and won’t be shared with additional third parties, the post clarified.

Here are this week’s top headlines around the Cardano ecosystem

Cardano whales are stacking ADA – 200M tokens in the last five weeks

The Cardano network has not seen as bullish a year in 2022 as it did last year. However, according to blockchain analytics platform Santiment, data indicates that Cardano whales have recently been logging positive sentiment, buying upwards of 200 million ADA in the last five weeks.

According to a tweet shared by Santiment on Tuesday, wallet holders having between 1 million and 10 million ADA in their accounts accumulated 196 million ADA in that time. The trend reversed a pattern that had been established seven months prior to the renewed surge, during which this profile of investors dumped as much as 1.7 million ADA tokens.

While ADA suffered and lost up to 75% in value from its peak reached last September, increased institutional interest resulted in enhanced network activity in Q1 this year.

The Cardano network is also flourishing in different facets, particularly in the evolution of its decentralized ecosystem. Input Output Global (IOG) recently updated that the number of projects building on Cardano has reached 925, with most developers creating NFTs – 46.6% of the total. 4.1% of the projects are marketplaces, 3.4% are metaverse-focused, and 4.2% are in gaming.

IOG announces Atala SCAN, a Cardano-native product authentication system

IOG, the developer of the Cardano, has announced its entry into the product authentication space with the launch of Atala SCAN. This blockchain-based authentication system would employ a smart microchip and a free application built on the Cardano blockchain to verify the authenticity of a product. The app would enable users to browse the history of a tagged product instantly.

IOG is already in conversation with potential clients to offer this blockchain-based authenticator that promises users the ability to verify supply chain information and the legitimacy of a product. In the case of that premium-priced spirit bottle you bought, IOG says Atala powers the smart seal with “an encrypted, auditable link between the seal and the full manufacturing history of the specific bottle.”

At the core of this authentication system would be the smart seal, which IOG said would have an embedded near-field communication (NFC) chip. The seal won’t consume power but only “silently waits for a signal from a reader,” after which it transmits stored data for verification.

By design, it would have two antennas, of which one is designed to break upon tampering. Afterward, it functions normally but sends a signal to indicate a disturbance occurred when scanned.

Essential Cardano launches in beta

IOG on Thursday announced the launch of the Essential Cardano website in beta – the community-driven ecosystem platform. This resource, spearheaded by the Cardano community and curated by IOG, intends to enable users to understand the Cardano blockchain and its ecosystem at large.

As a “living directory of resources,”Essential Cardano would give users on the network a chance to showcase their creations and, in the long term, grow into a valuable resource. Being an open-source directory, users can interact (comment, upvote, collaborate, and peer review) on matters happening in the community.

Inviting users onto the platform, Head of Ecosystem Growth at IOG, Morgan Schofield, saidat the end of March that the platform allows content uploads in several formats, including videos, articles, developer resources, and podcast audio. This variability would help the Essential Cardano advance for the better.

To learn more about Cardano visit our Investing in Cardanoguide.