NAV Reporting On-Chain: Methods and Controls

Keeping track of an asset's value, especially in the fast-moving world of digital assets, can be tricky. When you're talking about nav reporting on-chain, it means figuring out the real worth of something directly from the blockchain. This isn't just about looking at numbers; it's about making sure those numbers are trustworthy and can be checked by anyone. We'll look at how this is done and what checks are put in place to make sure everything is on the up and up.

Key Takeaways

• On-chain NAV reporting uses blockchain data to determine an asset's value, offering transparency.
• Combining on-chain and off-chain data, often with oracles, is key for accurate real-world asset valuation.
• Strong controls like multi-signature approvals and smart contract audits are vital for secure reporting.
• Continuous monitoring and AI systems help detect anomalies and potential issues in real-time.
• Regulatory compliance and clear data validation strategies are necessary for trustworthy on-chain reporting.

Foundational Principles Of On-Chain NAV Reporting

Reporting the Net Asset Value (NAV) of a fund or portfolio is a pretty standard practice in traditional finance. It's basically the total value of a fund's assets minus its liabilities. But when you start dealing with digital assets and blockchain technology, things get a bit more interesting, and frankly, a lot more transparent. This is where on-chain NAV reporting comes into play.

Understanding Net Asset Value in a Digital Asset Context

When we talk about NAV in the digital asset space, we're looking at the value of cryptocurrencies, tokens, and other digital holdings. This isn't just about Bitcoin or Ethereum anymore; it includes a whole range of digital instruments, some of which might even represent real-world assets. The challenge here is that the value of these assets can swing wildly, and tracking them accurately requires a different approach than just looking at stock prices. We need to consider the actual holdings on the blockchain, not just what's reported in a traditional ledger. This is where the idea of tokenized assets comes into play, blurring the lines between physical and digital ownership.

The Imperative for Transparency and Auditability

One of the biggest draws of blockchain is its inherent transparency. Every transaction, every movement of assets, is recorded on a public ledger. This makes on-chain NAV reporting incredibly powerful for auditability. Instead of relying solely on internal records, you can point to the blockchain itself as proof of holdings. This level of transparency is a game-changer for investors and regulators alike. It means less guesswork and more verifiable data. Think about it: instead of just trusting a statement, you can, in theory, verify the assets directly on-chain. This builds trust and reduces the potential for fraud.

Bridging Traditional Finance and Blockchain Reporting

So, how do we make this work? It's about building bridges. We need systems that can take the raw data from the blockchain and translate it into the kind of reports that traditional finance understands. This involves integrating on-chain data with off-chain information, like market prices from exchanges or valuations of real-world assets that might be tokenized. It's a complex task, but it's necessary to bring the benefits of blockchain reporting to a wider audience. The goal is to create a reporting system that is both familiar to traditional investors and leverages the unique advantages of blockchain technology. This means developing new tools and processes that can handle the speed and complexity of digital assets while still adhering to established financial principles.

Core Methodologies for On-Chain NAV Calculation

Calculating Net Asset Value (NAV) on the blockchain isn't just about pulling numbers from a ledger; it's about making sure those numbers actually mean something and are reliable. We're talking about taking digital assets, which can be pretty wild and volatile, and figuring out their worth in a way that everyone can trust. This is where the real work begins.

So, how do we actually get the value of these digital assets? The most straightforward way is to look at the data right there on the blockchain. For cryptocurrencies like Bitcoin or Ether, this is pretty simple. We can check the current market price from various exchanges. Think of it like checking the stock ticker, but for crypto. The challenge comes when you have more complex digital assets, like tokenized real estate or private equity shares. Their value isn't always listed on a public exchange. We need to find ways to get that information and bring it into our NAV calculation.

This is where things get interesting. Most assets, even tokenized ones, have a life outside the blockchain. A tokenized piece of art still hangs on a wall somewhere, and a tokenized loan represents a real-world debt. To get an accurate NAV, we have to connect these off-chain realities with the on-chain tokens. This means getting data from traditional sources – like property appraisals, loan performance reports, or even stock market data for traditional assets – and feeding it into the system. It’s like building a bridge between two different worlds, making sure the information flows accurately and securely.

Oracles are the key players here. They're like trusted messengers that bring real-world information onto the blockchain. For NAV reporting, oracles can fetch price feeds for assets that don't trade on crypto exchanges, or they can confirm events happening in the physical world that affect an asset's value. For example, an oracle could report on the occupancy rate of a tokenized building or the default status of a tokenized loan. Choosing reliable oracle providers is super important because if the data they bring is wrong, our NAV calculation will be off, no matter how good our on-chain systems are. This is a critical step in making sure our on-chain NAV truly reflects the value of the underlying assets, whether they're digital or physical. You can find more about how these systems work in attestation for tokenized assets.

Here's a quick look at how different data sources might be used:

Implementing Robust Controls for On-Chain Reporting

When you’re dealing with NAV reporting on-chain, just having the numbers add up isn’t enough. Real trust comes from controls that keep things honest, secure, and audit-ready—even when everything runs on open, transparent blockchains. It all boils down to smart, layered processes. Here’s how these controls get put to work.

Multi-Signature and Quorum Approval Mechanisms

Multi-signature (multi-sig) wallets are a core method for splitting approval power among several parties. Instead of one person being able to move funds or submit critical updates, there’s a group decision:

• Set required signer thresholds (e.g., 2 out of 3, or 4 out of 7) for sensitive transactions.
• Rotate signers periodically to reduce risk if one key is compromised.
• Limit roles for who can propose, approve, or execute changes.

This approach is how digital asset firms can match up to what old school finance expects from internal controls. For a real-world comparison, many digital currency companies comply with SOX requirements for control and reconciliation.

It’s a lot easier to prevent a single mistake from taking down your whole NAV calculation process when three people have to agree for fund movement.

Formal Verification and Smart Contract Audits

No one wants to lose money because of a bug in a contract. Formal verification—a form of mathematical code-checking—can catch flaws before anything goes live. Meanwhile, ongoing audits by trusted third parties keep everyone accountable. Typical best practices:

1. Run formal verification tools before any on-chain upgrade or deployment.
2. Pin dependencies and use verified builds to avoid sneaky code changes.
3. Engage reputable auditors for every important contract.

If something odd shows up, audits let you patch before disaster hits. This is how mature protocols dodge issues like reentrancy attacks or logic flaws. At the end of the day, people expect their NAV numbers to be accurate because the code has been thoroughly checked—not just because someone said so.

Runtime Monitoring and Anomaly Detection

You can’t set controls once and walk away. Stuff goes wrong (and fast) on-chain, so rapid detection is a must. Here’s how continuous monitoring takes this up a notch:

• AI or rules-based agents watch for strange transfers or contract interactions.
• Real-time alerts get piped into the security team’s dashboards to allow a quick response.
• Auto-containment can freeze assets or pause a contract to prevent a bad bug from spreading.

Table: Runtime Control Actions

The point isn’t to control everything, but to have smart tripwires that ring the alarm when something looks off. That’s what allows a system to keep up with the speed and complexity of blockchain operations.

When NAV cycles are automated, even a minor mistake can ripple through everything—so you need watchful monitoring that doesn’t blink.

Putting these controls in place isn’t just about pleasing auditors. It’s how you build trust, protect assets, and keep your NAV reporting credible—and in blockchain, trust is everything.

Advanced Security Measures in NAV Reporting

When we're talking about reporting Net Asset Value (NAV) on-chain, security isn't just a nice-to-have; it's the whole ballgame. We're dealing with digital assets, which means we need to think about security in ways that are a bit different from traditional finance. It's not just about keeping things private; it's about making sure the data is accurate and that no one can mess with it.

MPC and Multi-Sig for Private Key Security

One of the biggest worries with digital assets is losing your private keys. If someone gets their hands on those, they can pretty much take whatever is associated with them. That's where things like Multi-Party Computation (MPC) and Multi-Signature (Multi-Sig) come into play. Instead of having one single private key that's a single point of failure, these methods split up the key or require multiple approvals for a transaction. Think of it like needing several different keys to open a vault, or needing a few people to sign off before a big wire transfer goes through. This makes it way harder for a single bad actor to compromise your assets. It adds layers of protection, making sure that even if one part of the system is compromised, the whole thing doesn't go down.

Oracle Security and Data Integrity Checks

Oracles are super important because they bring real-world data onto the blockchain. But what if the oracle itself is compromised or provides bad data? That's a huge problem for NAV reporting, as it could lead to wildly inaccurate valuations. To combat this, we need to be really careful about where our oracle data comes from. Using multiple, independent oracles and comparing their outputs is a good start. We can also set up checks to see if the data makes sense – like, does the price of an asset suddenly jump by 1000% for no reason? If it does, we need a system that can flag it or even reject it. This is all about making sure the data we're using to calculate NAV is trustworthy and hasn't been tampered with.

Formal Verification and Audits for Smart Contract Exploits

Smart contracts are the backbone of a lot of on-chain activity, including how NAV might be calculated or reported. But code can have bugs, and in the world of crypto, bugs can be incredibly expensive. Formal verification is a way to mathematically prove that a smart contract does exactly what it's supposed to do, and nothing else. It's like having a super-rigorous code review that goes way beyond what a human can typically do. Alongside this, regular, independent audits by security experts are a must. These audits look for vulnerabilities that might have been missed, like reentrancy attacks or integer overflows. The goal is to catch as many potential exploits as possible before they can be used to steal funds or manipulate data.

Here's a quick look at some of the controls we're talking about:

• MPC/Multi-Sig: Protects private keys by requiring multiple parties or computations for transactions.
• Oracle Security: Uses multiple data sources and deviation checks to ensure data accuracy.
• Formal Verification: Mathematically proves smart contract correctness.
• Audits: Independent reviews to find and fix vulnerabilities.

Security in on-chain NAV reporting isn't a one-time fix; it's an ongoing process. We need to build systems that are not only secure from the start but can also adapt to new threats as they emerge. This means continuous monitoring and a willingness to update our defenses regularly.

Continuous Monitoring and Real-Time Analysis

Continuous monitoring and real-time analysis in on-chain NAV reporting means setting up systems that watch everything as it happens, not weeks or months after the fact. In a market that trades 24/7 and can move huge sums in seconds, waiting for an end-of-month report is basically asking for trouble.

The Need for Automated, Continuous Security

Manual checks and periodic audits just can’t keep up with the nonstop, global speed of digital assets. Instead, protocols now rely on automated monitoring, which:

• Flags oddities in block-by-block activity.
• Catches errors or attacks before they grow into big losses.
• Makes incident response smoother and faster.

A few practical elements of continuous monitoring include:

• Setting “tripwire” thresholds for outflow, asset movement, or suspicious activity.
• Updating rule sets as new threats appear, not waiting for next quarter’s audit.
• Combining on-chain activity with off-chain feeds for context (like sudden changes in a real-world asset price).

Real-time oversight is no longer optional — it’s the ground floor for any tokenized asset manager. The alternative is accepting higher risk and more surprises.

AI-Powered Multi-Agent Systems for Auditing

Artificial intelligence is changing the game by providing a set of virtual “auditors” that don’t sleep or take breaks. Multi-agent AI systems can:

• Scan all transactions, seeking patterns unusual for a given contract, protocol, or wallet.
• Check logic and dependencies in smart contracts much faster than humans can.
• Raise alerts if they see behavior matching known attack signatures, like rapid reentrancy or price manipulation.

Here’s a quick comparison table:

AI isn’t magic though. You still need good data, clear logic, and regular updating of what “risky” looks like. But these agents catch things regular scripts miss, especially when attackers shift their tactics.

Real-Time Analysis of Contract Interactions

With hundreds or thousands of contracts, all interacting, real-time analysis is about watching traffic patterns so nothing slips by. This includes:

1. Mapping normal contract usage and spotting new, unpredictable sequences.
2. Watching for sudden spikes in gas usage, odd function calls, or unknown counterparty addresses.
3. Automatically pausing, freezing, or raising approval requirements if defined risk thresholds are hit.

Some tools will also:

• Log every anomaly to an irreversible ledger for later review.
• Pipe alerts into existing security incident systems, so there’s no gap between blockchain and regular IT defense.
• Share standardized threat scores or compliance signals across regulated firms, reducing duplication and increasing transparency.

Real-time analysis means not sleeping on risk, and for NAV managers, that might be the only way to keep up.

Data Integrity and Validation Strategies

Making sure the numbers add up, both on and off the blockchain, is a big deal. You can't just trust that the data floating around is accurate; you need ways to check it. This is especially true when you're dealing with Net Asset Value (NAV) reporting, where even small errors can cause major headaches. It’s like trying to bake a cake with ingredients that might be spoiled – the whole thing could turn out wrong.

Ensuring Accuracy of On-Chain and Off-Chain Data

On-chain data is what gets recorded directly on the blockchain – think transactions, token ownership, and smart contract states. Off-chain data is everything else: legal documents, property appraisals, audit reports, and market prices from traditional exchanges. The trick is to link these two worlds reliably. For example, if a token represents ownership of a real estate property, the on-chain token data needs to match the off-chain legal title and appraisal reports. We can use oracles to bring off-chain information onto the blockchain, but we have to be really careful about where that data comes from. The goal is to create a verifiable chain of custody for all relevant information.

Here’s a breakdown of how we can approach this:

• Cross-referencing data sources: Don't rely on just one source for critical information. Use multiple, independent data feeds for asset valuations and market prices. If they don't align within acceptable parameters, it's a red flag.
• Digital signatures and timestamps: Ensure that off-chain data is digitally signed by trusted parties and timestamped. This helps prove its authenticity and when it was created.
• Smart contract validation rules: Build checks directly into smart contracts to validate incoming data. For instance, a contract could reject an oracle price update if it deviates too drastically from previous values or other data sources.
• Regular reconciliation: Periodically compare on-chain records with off-chain accounting and legal documentation. This is a bit like doing your taxes – you have to make sure everything lines up.

The integrity of reported NAV hinges on the accuracy and trustworthiness of both the digital records on the blockchain and the real-world information they represent. Without robust validation, the entire reporting mechanism can be compromised, leading to investor distrust and potential financial losses.

Proof-of-Reserves Verification Services

Proof-of-Reserves (PoR) is a method that allows a company to demonstrate that it holds sufficient assets to back its issued tokens. For NAV reporting, this is super important. It’s a way to show that the assets claimed to be held by the fund are actually there and can be verified. Think of it like an independent auditor checking the vault. These services often involve cryptographic proofs that allow anyone to verify the reserves without revealing sensitive information about the fund's operations. This builds a lot of confidence for investors. We're seeing more and more services pop up that specialize in providing these attestations on-chain.

Linking Digital Assets to Underlying Real-World Assets

This is where the rubber meets the road. How do we make sure that the digital token on the blockchain is truly and accurately linked to its real-world counterpart? It involves a combination of legal agreements, smart contract design, and reliable data feeds. For instance, a token representing a share in a piece of art needs a clear legal framework that assigns ownership rights to the token holder. Then, oracles need to provide accurate, up-to-date information about the art's valuation and condition. It’s a complex puzzle, but getting it right is key to making tokenized real-world assets a trusted part of the financial system.

Regulatory Compliance and Reporting Standards

Staying on the right side of regulations isn’t just a box-ticking exercise anymore, especially with on-chain NAV reporting. As the rules shift, firms working with digital assets have to keep a constant eye on compliance for anti-money laundering, tax, and financial reporting standards.

Adapting AML/CFT Frameworks for Digital Assets

Scrutiny for anti-money laundering (AML) and countering the financing of terrorism (CFT) keeps ramping up. Traditional compliance methods often don’t fit digital assets, so companies need a new approach. Most firms are now expected to:

• Define which wallet holders count as customers for ID checks
• Update Know Your Customer (KYC) controls for on-chain and off-chain users
• Use analytics tools to track suspicious wallet activity across the blockchain
• Whitelist (allow-list) known addresses and flag unverified (blacklisted) accounts
• Schedule regular reviews and updates to account verification

The shift to decentralized systems means firms must rethink how they verify users and report suspicious activity—systems that once worked for banks don’t always carry over.

Suspicious Activity Report (SAR) Modernization

Newer tech brings new reporting headaches. Filing Suspicious Activity Reports needs to be efficient and focused if regulators are going to keep up.

• SAR reports will start including digital asset-specific details, like wallet addresses and transaction hashes
• Automated systems will flag and report transactions that seem suspicious without the need for manual checks
• More guidance is expected on which activity actually triggers a SAR filing
• Privacy for customers must be balanced against the need for thorough reporting

Taxation and Third-Party Information Reporting

Tax reporting for digital assets is finally catching up, but it’s full of fresh challenges. Countries are rolling out rules to combat tax evasion across borders, so exchanges and brokers need to prepare.

• U.S. and global rules now require exchanges to report sales and swaps (not just cash outs)
• The Crypto-Asset Reporting Framework (CARF) sets standards for cross-border tax info sharing between tax agencies
• Reports need to cover more transaction types, including swaps, transfers, and income from digital assets
• Backup withholding and stricter due diligence are being introduced in stages

Major Tax Reporting Developments

1. U.S. Section 6045 Expansion: Requires detailed reporting on most digital asset trades starting in 2026
2. Global CARF: Over 65 countries will share information on digital asset transactions
3. Due Diligence: Providers must verify identities before accounts are opened and as transactions happen

Getting this right reduces the risk of fines and regulatory hassles, and keeps digital asset businesses in the good graces of both U.S. and international authorities.

Compliance with on-chain NAV reporting standards is an ongoing process, not a one-time project. As regulators publish new rules, firms need tech, policies, and people that can all adjust quickly. It might mean more work now, but it beats scrambling to catch up later.

Automated Reporting and Data Delivery

Getting the right information to the right people at the right time is a big deal, especially when you're dealing with on-chain data. This is where automated reporting and data delivery come into play. It's all about making sure that the Net Asset Value (NAV) calculations and other important financial data are not just accurate, but also easily accessible.

Leveraging Blockchain for Record-Keeping Obligations

Blockchains are pretty good at keeping records, right? They're designed to be transparent and immutable, which is a great starting point for meeting record-keeping duties. For NAV reporting, this means that the data used to calculate the NAV can be stored on-chain, providing a verifiable audit trail. This can simplify how firms meet regulatory requirements, as the data is inherently more trustworthy and easier to access for audits. Think of it as having a digital ledger that automatically updates and keeps a permanent history of all transactions and valuations.

API Gateways for Programmatic Data Access

Now, just having data on the blockchain is one thing, but how do you actually get it out and use it in your existing systems? That's where API gateways come in. These act like secure doors, allowing your other software applications to request and receive specific data from the blockchain in a structured way. This means you can pull granular NAV data directly into your own databases, financial dashboards, or third-party analytics tools without a lot of manual work. It's about making that on-chain information usable for everyday business operations. You can programmatically pull data for things like tokenized asset reporting or other financial analyses.

On-Demand Reporting and Self-Service Tools

Sometimes, you don't need a scheduled report; you need specific information right now. On-demand reporting tools and self-service portals are designed for this. They let users query the NAV system directly, generating custom reports or pulling specific data points as needed. This is super handy for quick checks, ad-hoc analysis, or when an auditor asks for a very specific piece of information. It puts the power of data retrieval directly into the hands of the user, cutting down on the back-and-forth with a reporting team. It's a way to get instant insights without waiting for a pre-defined report to be generated.

The shift towards automated reporting isn't just about convenience; it's about building trust and efficiency into the financial reporting process. By making data more accessible and verifiable, organizations can reduce errors, speed up decision-making, and better meet the expectations of regulators and investors alike.

Risk Management Through On-Chain Analytics

When you're dealing with digital assets and reporting their value, keeping an eye on potential problems is super important. It's not just about knowing what things are worth right now, but also about spotting trouble before it blows up. On-chain analytics gives us a way to do just that, by looking at all the activity happening directly on the blockchain.

Implementing Risk Thresholds in Execution Logic

Think of this like setting up guardrails for your smart contracts. You can program them to only allow certain actions if specific conditions are met. For example, a smart contract could be set up to automatically reject any transaction that involves a wallet flagged as high-risk, or if the total value of a transaction exceeds a pre-set limit. This means that risky operations can be stopped before they even happen, right there on the blockchain.

Here's a quick look at how this might work:

• Transaction Value Limits: Set a maximum amount for any single transaction. If a transaction goes over this, it's automatically blocked.
• Wallet Risk Scoring: Assign a risk score to each wallet address based on its history. Wallets above a certain score can't interact with the contract.
• Contract Interaction Allow-lists: Only permit interactions with other smart contracts that are on a pre-approved list.

This proactive approach means that risk management isn't just an afterthought; it's built right into the system's core operations. It's like having a security guard at the door who checks everyone's ID before they can enter, rather than trying to catch troublemakers after they've already caused a scene.

Wallet Risk Scoring and Color-Coding

Not all wallets are created equal, right? Some might be associated with known scams, while others are just regular users. On-chain analytics can help us figure this out. By looking at a wallet's transaction history, where its funds have come from, and where they're going, we can assign it a risk score. This score can then be used to 'color-code' wallets – maybe green for low risk, yellow for medium, and red for high risk. This makes it easy to see at a glance which wallets might be problematic.

This scoring can consider things like:

• Transaction Patterns: Are there lots of small, rapid transactions that look like bot activity?
• Source of Funds: Have funds passed through mixers or known illicit addresses?
• Interaction History: Has the wallet interacted with known risky protocols?

Automated Response Systems for Anomalies

What happens when something unexpected pops up? Instead of waiting for a human to notice and react, we can build automated responses right into the system. If the on-chain analytics detect an anomaly – say, a sudden, massive outflow of funds from a normally stable contract – an automated system could kick in. This might involve automatically freezing certain assets, sending alerts to the security team, or even triggering a pre-defined 'circuit breaker' that temporarily halts all activity on a protocol until the situation is reviewed.

These automated responses can be tailored to the severity of the anomaly:

1. Alerting: Send immediate notifications to relevant parties.
2. Temporary Halting: Pause specific functions or the entire protocol.
3. Asset Freezing: Temporarily lock down suspect assets to prevent further movement.

Future-Proofing NAV Reporting Systems

As we look ahead, keeping NAV reporting systems robust and adaptable is key. The digital asset space moves fast, and what works today might not cut it tomorrow. We need systems that can grow and change with the market, staying ahead of new risks and technologies. This means building with flexibility and foresight from the start.

AI-Agent Safeguards for Autonomous Transactions

Autonomous agents are becoming more common, handling transactions and managing assets. But this also brings new risks. We need to think about how to control these agents. This could involve things like setting limits on how fast they can trade, making sure they are properly verified before they start, and having circuit breakers in place for when things get wild. It's about making sure these automated systems don't cause unexpected problems. Think of it like giving a self-driving car clear rules and safety features so it doesn't just crash.

Revocable Credentials and Portability

In the future, how we manage access and identity will change. We might use credentials that can be revoked if they're compromised or no longer needed. This is important for security. Also, making sure data and access can be moved between different systems or platforms is going to be a big deal. This portability means you're not locked into one provider and can adapt as technology evolves. It's like having a digital passport that you can use in different countries and can cancel if it gets lost.

Industry-Led Standards for Data Formats

To make sure different systems can talk to each other and that reporting is consistent, we need common standards. This applies to how data is formatted, how risk scores are communicated, and how events are logged. If everyone agrees on a standard way to do things, it makes integration much easier and reduces the chances of errors. It's like agreeing on a common language so everyone can understand each other. This kind of collaboration helps build trust and interoperability across the whole digital asset ecosystem.

Putting It All Together

So, we've looked at how to report on-chain and what controls are needed. It's clear that just having basic audits isn't enough anymore. We need systems that are always watching, like the AI agents mentioned, to catch problems as they happen. Using things like multi-source oracles and allowing only certain contracts to interact helps a lot. Plus, having clear plans for what to do when something goes wrong is super important. It's a lot to think about, but getting these reporting methods and controls right is key for keeping things secure and trustworthy in this space.

Frequently Asked Questions

What does "on-chain NAV reporting" mean in simple terms?

It means showing the real-time value of digital assets and investments directly on a blockchain, like a public ledger that everyone can see. Think of it as a transparent way to track how much something is worth, right as it happens.

Why is it important to report the value of assets on the blockchain?

It's important because it makes everything super clear and trustworthy. When the value is on the blockchain, it's harder to hide things, and people can easily check if the numbers add up. This builds confidence for investors and users.

How do you figure out the value of digital assets for reporting?

We use different methods. Sometimes, we look at the current prices on crypto exchanges. Other times, we might use special tools called 'oracles' to bring in prices from the real world, especially for assets that aren't just digital, like real estate.

What are "controls" in this kind of reporting?

Controls are like safety rules and checks. They make sure that the reported value is accurate and that nobody can cheat the system. Examples include needing multiple people to approve changes or using special codes to make sure the software is working correctly.

Are there security risks when reporting on the blockchain?

Yes, there are always risks with technology. Hackers might try to mess with the data or steal assets. That's why strong security measures like special approval systems (multi-sig) and constant checks are needed to keep everything safe.

How do you make sure the information reported is correct?

We use a few tricks. We check data from multiple sources, use smart contracts that have been tested thoroughly, and have systems that watch for anything unusual happening in real-time. It's like having multiple layers of security and checks.

Does this on-chain reporting have to follow any rules?

Yes, definitely. Even though it's on the blockchain, it still needs to follow rules about preventing money laundering and terrorism financing. There are also rules about reporting information for taxes, similar to traditional finance.

Can this reporting be automated?

Absolutely! A big advantage is that we can set up systems to automatically gather data, calculate values, and create reports. This makes the process faster and less prone to human mistakes, and allows for easy access through things like APIs.