Case Study: How Metal Pay Prevented 50% More Fraud Using the Fraud DAO

April 21, 2023
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Case Study: How Metal Pay Prevented 50% More Fraud Using the Fraud DAO

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Metal Pay, founded by Marshall Hayner and Glenn Mariën in 2016, is an instant payment platform built on cryptocurrency rails. It is primarily a blockchain-based system utilizing Proof-of-Processed-Payments to identify end users, rewarding them for converting legacy fiat currency into cryptocurrency.

As Metal’s transactional volumes have increased, their business has been exposed to greater risk and new fraud vectors. With this in mind, Metal was looking to shift from detecting fraud to preventing it, ensuring lower fraud losses. This is why they started engaging with the Fintech Fraud DAO - to leverage the DAO’s fraud database to inform their account decisioning workflows. 


Fraud cannot be resolved overnight with a static, one-size-fits-all approach.

Paulo Donati, Risk operations manager at Metal, recognized this early on and looked at the market for solutions that could address these challenges in a proactive, scalable, and efficient manner.

Metal was experiencing higher fraud percentages post the pandemic, which led their executive teams to shift their fraud mindset from a reactive approach to a preventative one. And that led Paulo to the Fintech Fraud DAO.

Paulo and the Metal Pay team realized that a fraud data-sharing community that focused on fintech verticals (Peer-to-peer payments, crypto, neobanking, etc) was key to solving their unique challenges, rather than traditional consortium solutions that were restrictive in their data models and controlled by large financial institutions.

However, in any such shared database, the question of preserving Personally Identifiable Information (PII) becomes a focal point.

That's what ultimately led Metal Pay and Paulo to select the Fintech Fraud DAO as their solution, as the product is designed to ensure that end user privacy is preserved, while providing free fraud signals to its members. 


There were key questions the Metal Pay team wanted to be aligned on before becoming members of the Fraud DAO around: the management of PII, data security, and fraud signals.

But as discussions continued, it was the value and efficacy of the data they would get in being a founding member of the Fintech Fraud DAO.

“The most important insight we can gain is whether or not the customer committed fraud elsewhere in the past.” Paulo shared.

“This is information that cannot be easily or quickly obtained without a network of companies sharing information in real-time.”

It was clear to the Metal Pay team, the impact Fraud DAO on their operations. Below are some key metrics around the fraud rate before and after joining the consortium. 

As you can tell it’s clear the valuable insights they gained into their customers’ behavior and activities. Allowing them to make more informed decisions and prevent fraud more effectively. 

Metal and Fraud DAO: The Final Fraud Frontier

Early on, Metal Pay’s team identified the need for a scalable fraud detection platform that catered to their specific industry verticals.

The increase in the number of true positive fraud users detected since the implementation of the Fraud DAO indicates that their approach was successful. Further, their ability to leverage the free insights provided by the DAO within a two-week time frame resulted in a high degree of operational efficiency.

Paulo Donati summed up the value that Metal Pay was able to obtain from Fraud DAO consortium: 

“The future of fighting fraud effectively involves the removal of the extreme siloing of information between financial platforms.”

“This shortcoming allows for any method of fraud to proliferate, or for any given fraudster to reuse stolen information at multiple fintechs. Sharing information quickly, securely, privately, and effectively is the best way to combat fraud.”

To learn more about the Fintech Fraud DAO, please reach out to us here.

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