8.3 Fraud Detection and Prevention Mechanisms

LQDTY incorporates multiple on-chain fraud detection and prevention mechanisms to secure transactions and maintain trust within its ecosystem.

8.3.1 Biometric Key Shard Verification for High-Value Transactions

1. Optional Biometric Authentication: Users can opt for biometric authentication to secure sensitive transactions, reducing the risk of identity fraud and account takeovers.
2. Zero-Knowledge Biometric Verification: Ensures user privacy while enabling secure authentication using biometric key shards.

8.3.2 Transaction Monitoring and Risk Analysis

1. AI-Powered Fraud Detection Models: Machine learning algorithms analyze transaction patterns to detect and flag suspicious activities.
2. Risk-Based Alerts for Anomalous Behavior: The system triggers additional authentication requirements if a user's activity deviates from routine behavior.