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Dragonchain Great Reddit Scaling Bake-Off Public Proposal

Dragonchain Great Reddit Scaling Bake-Off Public Proposal

Dragonchain Public Proposal TL;DR:

Dragonchain has demonstrated twice Reddit’s entire total daily volume (votes, comments, and posts per Reddit 2019 Year in Review) in a 24-hour demo on an operational network. Every single transaction on Dragonchain is decentralized immediately through 5 levels of Dragon Net, and then secured with combined proof on Bitcoin, Ethereum, Ethereum Classic, and Binance Chain, via Interchain. At the time, in January 2020, the entire cost of the demo was approximately $25K on a single system (transaction fees locked at $0.0001/txn). With current fees (lowest fee $0.0000025/txn), this would cost as little as $625.
Watch Joe walk through the entire proposal and answer questions on YouTube.
This proposal is also available on the Dragonchain blog.

Hello Reddit and Ethereum community!

I’m Joe Roets, Founder & CEO of Dragonchain. When the team and I first heard about The Great Reddit Scaling Bake-Off we were intrigued. We believe we have the solutions Reddit seeks for its community points system and we have them at scale.
For your consideration, we have submitted our proposal below. The team at Dragonchain and I welcome and look forward to your technical questions, philosophical feedback, and fair criticism, to build a scaling solution for Reddit that will empower its users. Because our architecture is unlike other blockchain platforms out there today, we expect to receive many questions while people try to grasp our project. I will answer all questions here in this thread on Reddit, and I've answered some questions in the stream on YouTube.
We have seen good discussions so far in the competition. We hope that Reddit’s scaling solution will emerge from The Great Reddit Scaling Bake-Off and that Reddit will have great success with the implementation.

Executive summary

Dragonchain is a robust open source hybrid blockchain platform that has proven to withstand the passing of time since our inception in 2014. We have continued to evolve to harness the scalability of private nodes, yet take full advantage of the security of public decentralized networks, like Ethereum. We have a live, operational, and fully functional Interchain network integrating Bitcoin, Ethereum, Ethereum Classic, and ~700 independent Dragonchain nodes. Every transaction is secured to Ethereum, Bitcoin, and Ethereum Classic. Transactions are immediately usable on chain, and the first decentralization is seen within 20 seconds on Dragon Net. Security increases further to public networks ETH, BTC, and ETC within 10 minutes to 2 hours. Smart contracts can be written in any executable language, offering full freedom to existing developers. We invite any developer to watch the demo, play with our SDK’s, review open source code, and to help us move forward. Dragonchain specializes in scalable loyalty & rewards solutions and has built a decentralized social network on chain, with very affordable transaction costs. This experience can be combined with the insights Reddit and the Ethereum community have gained in the past couple of months to roll out the solution at a rapid pace.

Response and PoC

In The Great Reddit Scaling Bake-Off post, Reddit has asked for a series of demonstrations, requirements, and other considerations. In this section, we will attempt to answer all of these requests.

Live Demo

A live proof of concept showing hundreds of thousands of transactions
On Jan 7, 2020, Dragonchain hosted a 24-hour live demonstration during which a quarter of a billion (250 million+) transactions executed fully on an operational network. Every single transaction on Dragonchain is decentralized immediately through 5 levels of Dragon Net, and then secured with combined proof on Bitcoin, Ethereum, Ethereum Classic, and Binance Chain, via Interchain. This means that every single transaction is secured by, and traceable to these networks. An attack on this system would require a simultaneous attack on all of the Interchained networks.
24 hours in 4 minutes (YouTube):
24 hours in 4 minutes
The demonstration was of a single business system, and any user is able to scale this further, by running multiple systems simultaneously. Our goals for the event were to demonstrate a consistent capacity greater than that of Visa over an extended time period.
Tooling to reproduce our demo is available here:
https://github.com/dragonchain/spirit-bomb

Source Code

Source code (for on & off-chain components as well tooling used for the PoC). The source code does not have to be shared publicly, but if Reddit decides to use a particular solution it will need to be shared with Reddit at some point.

Scaling

How it works & scales

Architectural Scaling

Dragonchain’s architecture attacks the scalability issue from multiple angles. Dragonchain is a hybrid blockchain platform, wherein every transaction is protected on a business node to the requirements of that business or purpose. A business node may be held completely private or may be exposed or replicated to any level of exposure desired.
Every node has its own blockchain and is independently scalable. Dragonchain established Context Based Verification as its consensus model. Every transaction is immediately usable on a trust basis, and in time is provable to an increasing level of decentralized consensus. A transaction will have a level of decentralization to independently owned and deployed Dragonchain nodes (~700 nodes) within seconds, and full decentralization to BTC and ETH within minutes or hours. Level 5 nodes (Interchain nodes) function to secure all transactions to public or otherwise external chains such as Bitcoin and Ethereum. These nodes scale the system by aggregating multiple blocks into a single Interchain transaction on a cadence. This timing is configurable based upon average fees for each respective chain. For detailed information about Dragonchain’s architecture, and Context Based Verification, please refer to the Dragonchain Architecture Document.

Economic Scaling

An interesting feature of Dragonchain’s network consensus is its economics and scarcity model. Since Dragon Net nodes (L2-L4) are independent staking nodes, deployment to cloud platforms would allow any of these nodes to scale to take on a large percentage of the verification work. This is great for scalability, but not good for the economy, because there is no scarcity, and pricing would develop a downward spiral and result in fewer verification nodes. For this reason, Dragonchain uses TIME as scarcity.
TIME is calculated as the number of Dragons held, multiplied by the number of days held. TIME influences the user’s access to features within the Dragonchain ecosystem. It takes into account both the Dragon balance and length of time each Dragon is held. TIME is staked by users against every verification node and dictates how much of the transaction fees are awarded to each participating node for every block.
TIME also dictates the transaction fee itself for the business node. TIME is staked against a business node to set a deterministic transaction fee level (see transaction fee table below in Cost section). This is very interesting in a discussion about scaling because it guarantees independence for business implementation. No matter how much traffic appears on the entire network, a business is guaranteed to not see an increased transaction fee rate.

Scaled Deployment

Dragonchain uses Docker and Kubernetes to allow the use of best practices traditional system scaling. Dragonchain offers managed nodes with an easy to use web based console interface. The user may also deploy a Dragonchain node within their own datacenter or favorite cloud platform. Users have deployed Dragonchain nodes on-prem on Amazon AWS, Google Cloud, MS Azure, and other hosting platforms around the world. Any executable code, anything you can write, can be written into a smart contract. This flexibility is what allows us to say that developers with no blockchain experience can use any code language to access the benefits of blockchain. Customers have used NodeJS, Python, Java, and even BASH shell script to write smart contracts on Dragonchain.
With Docker containers, we achieve better separation of concerns, faster deployment, higher reliability, and lower response times.
We chose Kubernetes for its self-healing features, ability to run multiple services on one server, and its large and thriving development community. It is resilient, scalable, and automated. OpenFaaS allows us to package smart contracts as Docker images for easy deployment.
Contract deployment time is now bounded only by the size of the Docker image being deployed but remains fast even for reasonably large images. We also take advantage of Docker’s flexibility and its ability to support any language that can run on x86 architecture. Any image, public or private, can be run as a smart contract using Dragonchain.

Flexibility in Scaling

Dragonchain’s architecture considers interoperability and integration as key features. From inception, we had a goal to increase adoption via integration with real business use cases and traditional systems.
We envision the ability for Reddit, in the future, to be able to integrate alternate content storage platforms or other financial services along with the token.
  • LBRY - To allow users to deploy content natively to LBRY
  • MakerDAO to allow users to lend small amounts backed by their Reddit community points.
  • STORJ/SIA to allow decentralized on chain storage of portions of content. These integrations or any other are relatively easy to integrate on Dragonchain with an Interchain implementation.

Cost

Cost estimates (on-chain and off-chain) For the purpose of this proposal, we assume that all transactions are on chain (posts, replies, and votes).
On the Dragonchain network, transaction costs are deterministic/predictable. By staking TIME on the business node (as described above) Reddit can reduce transaction costs to as low as $0.0000025 per transaction.
Dragonchain Fees Table

Getting Started

How to run it
Building on Dragonchain is simple and requires no blockchain experience. Spin up a business node (L1) in our managed environment (AWS), run it in your own cloud environment, or on-prem in your own datacenter. Clear documentation will walk you through the steps of spinning up your first Dragonchain Level 1 Business node.
Getting started is easy...
  1. Download Dragonchain’s dctl
  2. Input three commands into a terminal
  3. Build an image
  4. Run it
More information can be found in our Get started documents.

Architecture
Dragonchain is an open source hybrid platform. Through Dragon Net, each chain combines the power of a public blockchain (like Ethereum) with the privacy of a private blockchain.
Dragonchain organizes its network into five separate levels. A Level 1, or business node, is a totally private blockchain only accessible through the use of public/private keypairs. All business logic, including smart contracts, can be executed on this node directly and added to the chain.
After creating a block, the Level 1 business node broadcasts a version stripped of sensitive private data to Dragon Net. Three Level 2 Validating nodes validate the transaction based on guidelines determined from the business. A Level 3 Diversity node checks that the level 2 nodes are from a diverse array of locations. A Level 4 Notary node, hosted by a KYC partner, then signs the validation record received from the Level 3 node. The transaction hash is ledgered to the Level 5 public chain to take advantage of the hash power of massive public networks.
Dragon Net can be thought of as a “blockchain of blockchains”, where every level is a complete private blockchain. Because an L1 can send to multiple nodes on a single level, proof of existence is distributed among many places in the network. Eventually, proof of existence reaches level 5 and is published on a public network.

API Documentation

APIs (on chain & off)

SDK Source

Nobody’s Perfect

Known issues or tradeoffs
  • Dragonchain is open source and even though the platform is easy enough for developers to code in any language they are comfortable with, we do not have so large a developer community as Ethereum. We would like to see the Ethereum developer community (and any other communities) become familiar with our SDK’s, our solutions, and our platform, to unlock the full potential of our Ethereum Interchain. Long ago we decided to prioritize both Bitcoin and Ethereum Interchains. We envision an ecosystem that encompasses different projects to give developers the ability to take full advantage of all the opportunities blockchain offers to create decentralized solutions not only for Reddit but for all of our current platforms and systems. We believe that together we will take the adoption of blockchain further. We currently have additional Interchain with Ethereum Classic. We look forward to Interchain with other blockchains in the future. We invite all blockchains projects who believe in decentralization and security to Interchain with Dragonchain.
  • While we only have 700 nodes compared to 8,000 Ethereum and 10,000 Bitcoin nodes. We harness those 18,000 nodes to scale to extremely high levels of security. See Dragonchain metrics.
  • Some may consider the centralization of Dragonchain’s business nodes as an issue at first glance, however, the model is by design to protect business data. We do not consider this a drawback as these nodes can make any, none, or all data public. Depending upon the implementation, every subreddit could have control of its own business node, for potential business and enterprise offerings, bringing new alternative revenue streams to Reddit.

Costs and resources

Summary of cost & resource information for both on-chain & off-chain components used in the PoC, as well as cost & resource estimates for further scaling. If your PoC is not on mainnet, make note of any mainnet caveats (such as congestion issues).
Every transaction on the PoC system had a transaction fee of $0.0001 (one-hundredth of a cent USD). At 256MM transactions, the demo cost $25,600. With current operational fees, the same demonstration would cost $640 USD.
For the demonstration, to achieve throughput to mimic a worldwide payments network, we modeled several clients in AWS and 4-5 business nodes to handle the traffic. The business nodes were tuned to handle higher throughput by adjusting memory and machine footprint on AWS. This flexibility is valuable to implementing a system such as envisioned by Reddit. Given that Reddit’s daily traffic (posts, replies, and votes) is less than half that of our demo, we would expect that the entire Reddit system could be handled on 2-5 business nodes using right-sized containers on AWS or similar environments.
Verification was accomplished on the operational Dragon Net network with over 700 independently owned verification nodes running around the world at no cost to the business other than paid transaction fees.

Requirements

Scaling

This PoC should scale to the numbers below with minimal costs (both on & off-chain). There should also be a clear path to supporting hundreds of millions of users.
Over a 5 day period, your scaling PoC should be able to handle:
*100,000 point claims (minting & distributing points) *25,000 subscriptions *75,000 one-off points burning *100,000 transfers
During Dragonchain’s 24 hour demo, the above required numbers were reached within the first few minutes.
Reddit’s total activity is 9000% more than Ethereum’s total transaction level. Even if you do not include votes, it is still 700% more than Ethereum’s current volume. Dragonchain has demonstrated that it can handle 250 million transactions a day, and it’s architecture allows for multiple systems to work at that level simultaneously. In our PoC, we demonstrate double the full capacity of Reddit, and every transaction was proven all the way to Bitcoin and Ethereum.
Reddit Scaling on Ethereum

Decentralization

Solutions should not depend on any single third-party provider. We prefer solutions that do not depend on specific entities such as Reddit or another provider, and solutions with no single point of control or failure in off-chain components but recognize there are numerous trade-offs to consider
Dragonchain’s architecture calls for a hybrid approach. Private business nodes hold the sensitive data while the validation and verification of transactions for the business are decentralized within seconds and secured to public blockchains within 10 minutes to 2 hours. Nodes could potentially be controlled by owners of individual subreddits for more organic decentralization.
  • Billing is currently centralized - there is a path to federation and decentralization of a scaled billing solution.
  • Operational multi-cloud
  • Operational on-premises capabilities
  • Operational deployment to any datacenter
  • Over 700 independent Community Verification Nodes with proof of ownership
  • Operational Interchain (Interoperable to Bitcoin, Ethereum, and Ethereum Classic, open to more)

Usability Scaling solutions should have a simple end user experience.

Users shouldn't have to maintain any extra state/proofs, regularly monitor activity, keep track of extra keys, or sign anything other than their normal transactions
Dragonchain and its customers have demonstrated extraordinary usability as a feature in many applications, where users do not need to know that the system is backed by a live blockchain. Lyceum is one of these examples, where the progress of academy courses is being tracked, and successful completion of courses is rewarded with certificates on chain. Our @Save_The_Tweet bot is popular on Twitter. When used with one of the following hashtags - #please, #blockchain, #ThankYou, or #eternalize the tweet is saved through Eternal to multiple blockchains. A proof report is available for future reference. Other examples in use are DEN, our decentralized social media platform, and our console, where users can track their node rewards, view their TIME, and operate a business node.
Examples:

Transactions complete in a reasonable amount of time (seconds or minutes, not hours or days)
All transactions are immediately usable on chain by the system. A transaction begins the path to decentralization at the conclusion of a 5-second block when it gets distributed across 5 separate community run nodes. Full decentralization occurs within 10 minutes to 2 hours depending on which interchain (Bitcoin, Ethereum, or Ethereum Classic) the transaction hits first. Within approximately 2 hours, the combined hash power of all interchained blockchains secures the transaction.

Free to use for end users (no gas fees, or fixed/minimal fees that Reddit can pay on their behalf)
With transaction pricing as low as $0.0000025 per transaction, it may be considered reasonable for Reddit to cover transaction fees for users.
All of Reddit's Transactions on Blockchain (month)
Community points can be earned by users and distributed directly to their Reddit account in batch (as per Reddit minting plan), and allow users to withdraw rewards to their Ethereum wallet whenever they wish. Withdrawal fees can be paid by either user or Reddit. This model has been operating inside the Dragonchain system since 2018, and many security and financial compliance features can be optionally added. We feel that this capability greatly enhances user experience because it is seamless to a regular user without cryptocurrency experience, yet flexible to a tech savvy user. With regard to currency or token transactions, these would occur on the Reddit network, verified to BTC and ETH. These transactions would incur the $0.0000025 transaction fee. To estimate this fee we use the monthly active Reddit users statista with a 60% adoption rate and an estimated 10 transactions per month average resulting in an approximate $720 cost across the system. Reddit could feasibly incur all associated internal network charges (mining/minting, transfer, burn) as these are very low and controllable fees.
Reddit Internal Token Transaction Fees

Reddit Ethereum Token Transaction Fees
When we consider further the Ethereum fees that might be incurred, we have a few choices for a solution.
  1. Offload all Ethereum transaction fees (user withdrawals) to interested users as they wish to withdraw tokens for external use or sale.
  2. Cover Ethereum transaction fees by aggregating them on a timed schedule. Users would request withdrawal (from Reddit or individual subreddits), and they would be transacted on the Ethereum network every hour (or some other schedule).
  3. In a combination of the above, customers could cover aggregated fees.
  4. Integrate with alternate Ethereum roll up solutions or other proposals to aggregate minting and distribution transactions onto Ethereum.

Bonus Points

Users should be able to view their balances & transactions via a blockchain explorer-style interface
From interfaces for users who have no knowledge of blockchain technology to users who are well versed in blockchain terms such as those present in a typical block explorer, a system powered by Dragonchain has flexibility on how to provide balances and transaction data to users. Transactions can be made viewable in an Eternal Proof Report, which displays raw data along with TIME staking information and traceability all the way to Bitcoin, Ethereum, and every other Interchained network. The report shows fields such as transaction ID, timestamp, block ID, multiple verifications, and Interchain proof. See example here.
Node payouts within the Dragonchain console are listed in chronological order and can be further seen in either Dragons or USD. See example here.
In our social media platform, Dragon Den, users can see, in real-time, their NRG and MTR balances. See example here.
A new influencer app powered by Dragonchain, Raiinmaker, breaks down data into a user friendly interface that shows coin portfolio, redeemed rewards, and social scores per campaign. See example here.

Exiting is fast & simple
Withdrawing funds on Dragonchain’s console requires three clicks, however, withdrawal scenarios with more enhanced security features per Reddit’s discretion are obtainable.

Interoperability Compatibility with third party apps (wallets/contracts/etc) is necessary.
Proven interoperability at scale that surpasses the required specifications. Our entire platform consists of interoperable blockchains connected to each other and traditional systems. APIs are well documented. Third party permissions are possible with a simple smart contract without the end user being aware. No need to learn any specialized proprietary language. Any code base (not subsets) is usable within a Docker container. Interoperable with any blockchain or traditional APIs. We’ve witnessed relatively complex systems built by engineers with no blockchain or cryptocurrency experience. We’ve also demonstrated the creation of smart contracts within minutes built with BASH shell and Node.js. Please see our source code and API documentation.

Scaling solutions should be extensible and allow third parties to build on top of it Open source and extensible
APIs should be well documented and stable

Documentation should be clear and complete
For full documentation, explore our docs, SDK’s, Github repo’s, architecture documents, original Disney documentation, and other links or resources provided in this proposal.

Third-party permissionless integrations should be possible & straightforward Smart contracts are Docker based, can be written in any language, use full language (not subsets), and can therefore be integrated with any system including traditional system APIs. Simple is better. Learning an uncommon or proprietary language should not be necessary.
Advanced knowledge of mathematics, cryptography, or L2 scaling should not be required. Compatibility with common utilities & toolchains is expected.
Dragonchain business nodes and smart contracts leverage Docker to allow the use of literally any language or executable code. No proprietary language is necessary. We’ve witnessed relatively complex systems built by engineers with no blockchain or cryptocurrency experience. We’ve also demonstrated the creation of smart contracts within minutes built with BASH shell and Node.js.

Bonus

Bonus Points: Show us how it works. Do you have an idea for a cool new use case for Community Points? Build it!

TIME

Community points could be awarded to Reddit users based upon TIME too, whereas the longer someone is part of a subreddit, the more community points someone naturally gained, even if not actively commenting or sharing new posts. A daily login could be required for these community points to be credited. This grants awards to readers too and incentivizes readers to create an account on Reddit if they browse the website often. This concept could also be leveraged to provide some level of reputation based upon duration and consistency of contribution to a community subreddit.

Dragon Den

Dragonchain has already built a social media platform that harnesses community involvement. Dragon Den is a decentralized community built on the Dragonchain blockchain platform. Dragon Den is Dragonchain’s answer to fake news, trolling, and censorship. It incentivizes the creation and evaluation of quality content within communities. It could be described as being a shareholder of a subreddit or Reddit in its entirety. The more your subreddit is thriving, the more rewarding it will be. Den is currently in a public beta and in active development, though the real token economy is not live yet. There are different tokens for various purposes. Two tokens are Lair Ownership Rights (LOR) and Lair Ownership Tokens (LOT). LOT is a non-fungible token for ownership of a specific Lair. LOT will only be created and converted from LOR.
Energy (NRG) and Matter (MTR) work jointly. Your MTR determines how much NRG you receive in a 24-hour period. Providing quality content, or evaluating content will earn MTR.

Security. Users have full ownership & control of their points.
All community points awarded based upon any type of activity or gift, are secured and provable to all Interchain networks (currently BTC, ETH, ETC). Users are free to spend and withdraw their points as they please, depending on the features Reddit wants to bring into production.

Balances and transactions cannot be forged, manipulated, or blocked by Reddit or anyone else
Users can withdraw their balance to their ERC20 wallet, directly through Reddit. Reddit can cover the fees on their behalf, or the user covers this with a portion of their balance.

Users should own their points and be able to get on-chain ERC20 tokens without permission from anyone else
Through our console users can withdraw their ERC20 rewards. This can be achieved on Reddit too. Here is a walkthrough of our console, though this does not show the quick withdrawal functionality, a user can withdraw at any time. https://www.youtube.com/watch?v=aNlTMxnfVHw

Points should be recoverable to on-chain ERC20 tokens even if all third-parties involved go offline
If necessary, signed transactions from the Reddit system (e.g. Reddit + Subreddit) can be sent to the Ethereum smart contract for minting.

A public, third-party review attesting to the soundness of the design should be available
To our knowledge, at least two large corporations, including a top 3 accounting firm, have conducted positive reviews. These reviews have never been made public, as Dragonchain did not pay or contract for these studies to be released.

Bonus points
Public, third-party implementation review available or in progress
See above

Compatibility with HSMs & hardware wallets
For the purpose of this proposal, all tokenization would be on the Ethereum network using standard token contracts and as such, would be able to leverage all hardware wallet and Ethereum ecosystem services.

Other Considerations

Minting/distributing tokens is not performed by Reddit directly
This operation can be automated by smart contract on Ethereum. Subreddits can if desired have a role to play.

One off point burning, as well as recurring, non-interactive point burning (for subreddit memberships) should be possible and scalable
This is possible and scalable with interaction between Dragonchain Reddit system and Ethereum token contract(s).

Fully open-source solutions are strongly preferred
Dragonchain is fully open source (see section on Disney release after conclusion).

Conclusion

Whether it is today, or in the future, we would like to work together to bring secure flexibility to the highest standards. It is our hope to be considered by Ethereum, Reddit, and other integrative solutions so we may further discuss the possibilities of implementation. In our public demonstration, 256 million transactions were handled in our operational network on chain in 24 hours, for the low cost of $25K, which if run today would cost $625. Dragonchain’s interoperable foundation provides the atmosphere necessary to implement a frictionless community points system. Thank you for your consideration of our proposal. We look forward to working with the community to make something great!

Disney Releases Blockchain Platform as Open Source

The team at Disney created the Disney Private Blockchain Platform. The system was a hybrid interoperable blockchain platform for ledgering and smart contract development geared toward solving problems with blockchain adoption and usability. All objective evaluation would consider the team’s output a success. We released a list of use cases that we explored in some capacity at Disney, and our input on blockchain standardization as part of our participation in the W3C Blockchain Community Group.
https://lists.w3.org/Archives/Public/public-blockchain/2016May/0052.html

Open Source

In 2016, Roets proposed to release the platform as open source to spread the technology outside of Disney, as others within the W3C group were interested in the solutions that had been created inside of Disney.
Following a long process, step by step, the team met requirements for release. Among the requirements, the team had to:
  • Obtain VP support and approval for the release
  • Verify ownership of the software to be released
  • Verify that no proprietary content would be released
  • Convince the organization that there was a value to the open source community
  • Convince the organization that there was a value to Disney
  • Offer the plan for ongoing maintenance of the project outside of Disney
  • Itemize competing projects
  • Verify no conflict of interest
  • Preferred license
  • Change the project name to not use the name Disney, any Disney character, or any other associated IP - proposed Dragonchain - approved
  • Obtain legal approval
  • Approval from corporate, parks, and other business units
  • Approval from multiple Disney patent groups Copyright holder defined by Disney (Disney Connected and Advanced Technologies)
  • Trademark searches conducted for the selected name Dragonchain
  • Obtain IT security approval
  • Manual review of OSS components conducted
  • OWASP Dependency and Vulnerability Check Conducted
  • Obtain technical (software) approval
  • Offer management, process, and financial plans for the maintenance of the project.
  • Meet list of items to be addressed before release
  • Remove all Disney project references and scripts
  • Create a public distribution list for email communications
  • Remove Roets’ direct and internal contact information
  • Create public Slack channel and move from Disney slack channels
  • Create proper labels for issue tracking
  • Rename internal private Github repository
  • Add informative description to Github page
  • Expand README.md with more specific information
  • Add information beyond current “Blockchains are Magic”
  • Add getting started sections and info on cloning/forking the project
  • Add installation details
  • Add uninstall process
  • Add unit, functional, and integration test information
  • Detail how to contribute and get involved
  • Describe the git workflow that the project will use
  • Move to public, non-Disney git repository (Github or Bitbucket)
  • Obtain Disney Open Source Committee approval for release
On top of meeting the above criteria, as part of the process, the maintainer of the project had to receive the codebase on their own personal email and create accounts for maintenance (e.g. Github) with non-Disney accounts. Given the fact that the project spanned multiple business units, Roets was individually responsible for its ongoing maintenance. Because of this, he proposed in the open source application to create a non-profit organization to hold the IP and maintain the project. This was approved by Disney.
The Disney Open Source Committee approved the application known as OSSRELEASE-10, and the code was released on October 2, 2016. Disney decided to not issue a press release.
Original OSSRELASE-10 document

Dragonchain Foundation

The Dragonchain Foundation was created on January 17, 2017. https://den.social/l/Dragonchain/24130078352e485d96d2125082151cf0/dragonchain-and-disney/
submitted by j0j0r0 to ethereum [link] [comments]

Hulk.Finance: A Combination of DeFi and High Frequency Trading

DeFi continues to push the limits of blockchain technology. Whether its staking a native token for a second token from the same ecosystem, locking liquidity for an eternity to promote liquidity providing and the benefits of locking tokens, or simply creating new tokenomics that can be tested and studied, DeFi is exploring all avenues to produce the next breakout token such as YFI. Hulk.finance has stepped in to do just that.

Hulk.finance (Contract Address: 0xE1f8CD01aB04b51d02C6fb2BCA61B03fB5e33B99**)** is an ERC20 token which plans to utilize a DAO (Decentralized Autonomous Organization) format that will be community governed in order to promote high frequency trading in a manner only DeFi can bring to the table. As stated on their website, “Our project connects a high-yield partner HFT (High Frequency Trading) fund that has successfully worked from the beginning of 2020 and has year-to-date yields of more than 40%. The fund size is more than 70 millions USD and they operate on several cryptocurrency exchanges like Binance and Bithumb with their API robots. What is good — automated trading does not require continuous uptrend of the Bitcoin price. We have seen good results during Bitcoin breakouts and breakdowns. We want to have the same yields from our investments. But there is a problem — they work with an entrance barrier of 1,000,000 USDT, like many private banking services or high-yield ETFs. Our basic idea is to make a kind of DeFi staking pool and put it under the management of the HFT fund. We will develop all infrastructure for connecting finance flows, deposits, and withdrawals.

The HULK total supply is 100,000 Tokens. Distribution breakdown is as follows:

The project is new but already has a road-map to help guide their lofty ambitions. The first step begins with the formation of the pre-sale and Liquidity pool on Uniswap which is currently ongoing. Secondly, they will distribute Hulk tokens via staking farms. As described in their website they “will run staking farms for farming 80,000 HULKs*. You will need to stake appropriate tokens on the selected farms to get your share of rewards in HULKs. Farm 1 will farm rewards of 60,000* HULKs within 15 days, staking token — ETH-HULK LP Uniswap V2. Farm 2 will farm rewards of 10,000 HULKs within 15 days, staking token — USDN. Farm 3 will farm rewards of 10,000 HULKs within 15 days, staking token — Token Y. Token Y will be announced prior to the farms’ launch. Genesis farming time will be 15 days, after that farming rate will be settled on the level of 15th day. We implement halving every three days, so early farmers will get more HULKs. View on Etherscan. In order to support the price of the token from dumping, we will take a 5% commission for the sale of tokens, when holders sell it on Uniswap, burn 4% and add 1% to the community grants account. The burnt amount will be added to farming pools after 15 days of initial farming. So, for example, if someone sold 20,000 HULKs, we will take 1,000 tokens, burn 800 of them and they will be re-minted on day 16. 200 tokens will be sent to the community grants address. The total supply is 100,000 tokens.”

The third step includes the staking pool. The staking pool will be open for everyone on the following terms and conditions.


Funds from the staking pool will be transferred to the HFT fund for trading operations.

Lastly, the Vault concept is descriptive. “We want to share revenue from HFT fund among HULK holders that stake their tokens in HULK Vault. HFT fund will send revenue from its operation once a month, on the first day of the following month. Current concept: Monthly revenue from HFT operations will be shared between HULK tokens staked in the vault according to the time of staking divided on 720 hours. Example: You stake your 500 HULK tokens in Vault for 20 days (480 hours). Your HULK/hours equal to 500*480=240,000. Total HULK/hours in Vault in this month — 60,000,000. Your share in this month = 0,4%. HFT fund has earned 4% on staking pool funds this month. After payout of their 1,25% (15%/12) per month to USDT stakers, the remaining part is 10,000,000 USDT x 2,75% = 275,000 USD. Your profit share 0.4% of 275,000 = 1100 USDT will be sent as USDT to your address, connected with a Vault.”

All of the above described by the tokens creators seems very complicated, but many tokens are already trying to accomplish this without access to an already built fund which can execute trades on a daily basis. Also due in part is the projects commitment to becoming a DAO by allowing holders to vote on key project decisions and development to make the ecosystem more effective and manageable. Decentralization is the most trustworthy base of contract/cryptocurrency ownership. It creates a unique and secure environment free from direct outside influence due to the filter of the entire community being involved. The developers have said that the voting system for the project will be done within the first 30 days of project launch.

With lofty ambition and high expectations, the project looks to capitalize on the DeFi boom by hedging their fund against the market and giving holders a share of the pie. It will be interesting to see how successful and sustainable the project can be, but we will find out soon enough.

Pertinent Hulk.Finance Links:



(I write articles and reviews for legitimate, interesting, up and coming cryptocurrency projects. Feel free to PM me to review your project. Thank you!)

— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —

Disclaimer: This is not financial advice. The sole purpose of this post/article is to provide and create an informative and educated discussion regarding the project in question. Invest at your own risk.
submitted by Chrisc9234 to CryptoMoonShots [link] [comments]

Ahead of Migration to Symbol, Simplex Offers Fiat On-Ramp to Buy XEM

Ahead of Migration to Symbol, Simplex Offers Fiat On-Ramp to Buy XEM

Simplex provides fiat on-ramp infrastructure to several cryptocurrency exchanges, brokers and wallets.


https://preview.redd.it/xu0x98n0r0w51.png?width=880&format=png&auto=webp&s=bf68a66d608a1f0cd78a09eec28a58f34f1fb33b
XEM, NEM’s native token on the original NEM blockchain (NIS1), can now be purchased using credit and debit cards thanks to a new partnership with crypto payment gateway, Simplex.
Simplex provides fiat on-ramp infrastructure for several cryptocurrency exchanges, brokers, and wallets. The agreement will allow XEM holders to conduct and settle crypto transactions, a grey area of business where a gauntlet of KYC requirements and other regulations kick in.
NEM’s userbase will benefit from Simplex’s fiat credit and debit purchase options and the support will prepare XEM holders for the upcoming launch of Symbol from NEM, its new enterprise-grade blockchain solution.
“This partnership will provide an easy global on-ramp to XEM, enabling access to Simplex’s extensive network of exchanges globally. By providing users with greater flexibility in purchasing, Simplex will broaden the reach of XEM,” the company said.
Simplex often charges 3.5 percent of a transaction, with a $10 minimum purchase amount. Moreover, the company applies various restrictions, including a $20,000 maximum for daily transactions when using a credit or debit card, as well as a $50,000 maximum monthly limit.
Israeli-based Simplex combines crypto payment processing with fraud prevention technology and also provides a KYC opt-out feature for purchases less than USD $150. This amount is calculated for the entire lifetime of the user. Further, the startup enables merchants to accept diverse payment methods, including credit card deposits and purchases, with zero exposure to chargeback risk.
Simplex has already signed partnerships with leading crypto exchanges, including Binance and Huobi, among others, to enable users to buy cryptocurrencies with their credit cards. Most recently, it has added support for Bitcoin SV, the cryptocurrency spearheaded by the self-proclaimed creator of Bitcoin, Craig Wright.
Speaking on today’s announcement, Nicholas Pelecanos, head of trading at NEM said: “We’re excited to make XEM more globally accessible through Simplex’s vast network of partners and exchanges. Simplex’s user experience is unparalleled, and we’re thrilled to work with this industry behemoth to extend NEM’s global reach. This will enable anyone, anywhere, to have a foray into NEM and the digital assets space, democratizing access and propelling the industry forward to the next phase of adoption.”
Source
submitted by CoreyGilligan to ICOAnalysis [link] [comments]

Ahead of Migration to Symbol, Simplex Offers Fiat On-Ramp to Buy XEM

Ahead of Migration to Symbol, Simplex Offers Fiat On-Ramp to Buy XEM

Simplex provides fiat on-ramp infrastructure to several cryptocurrency exchanges, brokers and wallets.


https://preview.redd.it/hgd4r3xdr0w51.png?width=880&format=png&auto=webp&s=cd027802ab6ca9e1f7f0d0b2704d9b145f5ef4d0
XEM, NEM’s native token on the original NEM blockchain (NIS1), can now be purchased using credit and debit cards thanks to a new partnership with crypto payment gateway, Simplex.
Simplex provides fiat on-ramp infrastructure for several cryptocurrency exchanges, brokers, and wallets. The agreement will allow XEM holders to conduct and settle crypto transactions, a grey area of business where a gauntlet of KYC requirements and other regulations kick in.
NEM’s userbase will benefit from Simplex’s fiat credit and debit purchase options and the support will prepare XEM holders for the upcoming launch of Symbol from NEM, its new enterprise-grade blockchain solution.
“This partnership will provide an easy global on-ramp to XEM, enabling access to Simplex’s extensive network of exchanges globally. By providing users with greater flexibility in purchasing, Simplex will broaden the reach of XEM,” the company said.
Simplex often charges 3.5 percent of a transaction, with a $10 minimum purchase amount. Moreover, the company applies various restrictions, including a $20,000 maximum for daily transactions when using a credit or debit card, as well as a $50,000 maximum monthly limit.
Israeli-based Simplex combines crypto payment processing with fraud prevention technology and also provides a KYC opt-out feature for purchases less than USD $150. This amount is calculated for the entire lifetime of the user. Further, the startup enables merchants to accept diverse payment methods, including credit card deposits and purchases, with zero exposure to chargeback risk.
Simplex has already signed partnerships with leading crypto exchanges, including Binance and Huobi, among others, to enable users to buy cryptocurrencies with their credit cards. Most recently, it has added support for Bitcoin SV, the cryptocurrency spearheaded by the self-proclaimed creator of Bitcoin, Craig Wright.
Speaking on today’s announcement, Nicholas Pelecanos, head of trading at NEM said: “We’re excited to make XEM more globally accessible through Simplex’s vast network of partners and exchanges. Simplex’s user experience is unparalleled, and we’re thrilled to work with this industry behemoth to extend NEM’s global reach. This will enable anyone, anywhere, to have a foray into NEM and the digital assets space, democratizing access and propelling the industry forward to the next phase of adoption.”
Source
submitted by CoreyGilligan to altcoin_news [link] [comments]

Ahead of Migration to Symbol, Simplex Offers Fiat On-Ramp to Buy XEM

Ahead of Migration to Symbol, Simplex Offers Fiat On-Ramp to Buy XEM

Simplex provides fiat on-ramp infrastructure to several cryptocurrency exchanges, brokers and wallets.


https://preview.redd.it/f8ca2dvnr0w51.png?width=880&format=png&auto=webp&s=cae72bd32b8cb53084c549a3ca63b7c5f0254dce
XEM, NEM’s native token on the original NEM blockchain (NIS1), can now be purchased using credit and debit cards thanks to a new partnership with crypto payment gateway, Simplex.
Simplex provides fiat on-ramp infrastructure for several cryptocurrency exchanges, brokers, and wallets. The agreement will allow XEM holders to conduct and settle crypto transactions, a grey area of business where a gauntlet of KYC requirements and other regulations kick in.
NEM’s userbase will benefit from Simplex’s fiat credit and debit purchase options and the support will prepare XEM holders for the upcoming launch of Symbol from NEM, its new enterprise-grade blockchain solution.
“This partnership will provide an easy global on-ramp to XEM, enabling access to Simplex’s extensive network of exchanges globally. By providing users with greater flexibility in purchasing, Simplex will broaden the reach of XEM,” the company said.
Simplex often charges 3.5 percent of a transaction, with a $10 minimum purchase amount. Moreover, the company applies various restrictions, including a $20,000 maximum for daily transactions when using a credit or debit card, as well as a $50,000 maximum monthly limit.
Israeli-based Simplex combines crypto payment processing with fraud prevention technology and also provides a KYC opt-out feature for purchases less than USD $150. This amount is calculated for the entire lifetime of the user. Further, the startup enables merchants to accept diverse payment methods, including credit card deposits and purchases, with zero exposure to chargeback risk.
Simplex has already signed partnerships with leading crypto exchanges, including Binance and Huobi, among others, to enable users to buy cryptocurrencies with their credit cards. Most recently, it has added support for Bitcoin SV, the cryptocurrency spearheaded by the self-proclaimed creator of Bitcoin, Craig Wright.
Speaking on today’s announcement, Nicholas Pelecanos, head of trading at NEM said: “We’re excited to make XEM more globally accessible through Simplex’s vast network of partners and exchanges. Simplex’s user experience is unparalleled, and we’re thrilled to work with this industry behemoth to extend NEM’s global reach. This will enable anyone, anywhere, to have a foray into NEM and the digital assets space, democratizing access and propelling the industry forward to the next phase of adoption.”
Source
submitted by CoreyGilligan to CryptoNews [link] [comments]

Hulk.Finance: A Combination of DeFi and High Frequency Trading

Hulk.Finance: A Combination of DeFi and High Frequency Trading
DeFi continues to push the limits of blockchain technology. Whether its staking a native token for a second token from the same ecosystem, locking liquidity for an eternity to promote liquidity providing and the benefits of locking tokens, or simply creating new tokenomics that can be tested and studied, DeFi is exploring all avenues to produce the next breakout token such as YFI. Hulk.finance has stepped in to do just that.

https://preview.redd.it/f4mrjlxu5ct51.png?width=675&format=png&auto=webp&s=2c2d11429ae554d541bed3a19955fed71e6f9b6d
Hulk.finance (Contract Address: 0xE1f8CD01aB04b51d02C6fb2BCA61B03fB5e33B99) is an ERC20 token which plans to utilize a DAO (Decentralized Autonomous Organization) format that will be community governed in order to promote high frequency trading in a manner only DeFi can bring to the table. As stated on their website, “Our project connects a high-yield partner HFT (High Frequency Trading) fund that has successfully worked from the beginning of 2020 and has year-to-date yields of more than 40%. The fund size is more than 70 millions USD and they operate on several cryptocurrency exchanges like Binance and Bithumb with their API robots. What is good — automated trading does not require continuous uptrend of the Bitcoin price. We have seen good results during Bitcoin breakouts and breakdowns. We want to have the same yields from our investments. But there is a problem — they work with an entrance barrier of 1,000,000 USDT, like many private banking services or high-yield ETFs. Our basic idea is to make a kind of DeFi staking pool and put it under the management of the HFT fund. We will develop all infrastructure for connecting finance flows, deposits, and withdrawals.

https://preview.redd.it/fugnjuoz5ct51.png?width=717&format=png&auto=webp&s=2aa5bd3828b4803191de330f024edab277f47906

The HULK total supply is 100,000 Tokens. Distribution breakdown is as follows:
  • Farms Distribution: 80,000 (6% or 4,800 — Team Part)
  • Pre-sale: 10,000
  • Initial Liquidity Pool: 8,000
  • Development: 1,000
  • Marketing: 1,000

https://preview.redd.it/js0zqx136ct51.png?width=717&format=png&auto=webp&s=0469468caa8d47be95baf392b2a26a9303d7f773
The project is new but already has a road-map to help guide their lofty ambitions. The first step begins with the formation of the pre-sale and Liquidity pool on Uniswap which is currently ongoing. Secondly, they will distribute Hulk tokens via staking farms. As described in their website they “will run staking farms for farming 80,000 HULKs. You will need to stake appropriate tokens on the selected farms to get your share of rewards in HULKs. Farm 1 will farm rewards of 60,000 HULKs within 15 days, staking token — ETH-HULK LP Uniswap V2. Farm 2 will farm rewards of 10,000 HULKs within 15 days, staking token — USDN. Farm 3 will farm rewards of 10,000 HULKs within 15 days, staking token — Token Y. Token Y will be announced prior to the farms’ launch. Genesis farming time will be 15 days, after that farming rate will be settled on the level of 15th day. We implement halving every three days, so early farmers will get more HULKs. View on Etherscan. In order to support the price of the token from dumping, we will take a 5% commission for the sale of tokens, when holders sell it on Uniswap, burn 4% and add 1% to the community grants account. The burnt amount will be added to farming pools after 15 days of initial farming. So, for example, if someone sold 20,000 HULKs, we will take 1,000 tokens, burn 800 of them and they will be re-minted on day 16. 200 tokens will be sent to the community grants address. The total supply is 100,000 tokens.

The third step includes the staking pool. The staking pool will be open for everyone on the following terms and conditions.

  • Staking Pool 1 Target: 10 million USDT.
  • Guaranteed APY: 15%.
  • Minimum Staking Amount: 100 USDT.
  • Type Of Staking: Locked
  • Minimum Staking Term: 24 hours
  • Withdraw Period: 24 hours after withdrawal order.
  • Reward Calculation: daily.
Funds from the staking pool will be transferred to the HFT fund for trading operations.

Lastly, the Vault concept is descriptive. “We want to share revenue from HFT fund among HULK holders that stake their tokens in HULK Vault. HFT fund will send revenue from its operation once a month, on the first day of the following month. Current concept: Monthly revenue from HFT operations will be shared between HULK tokens staked in the vault according to the time of staking divided on 720 hours. Example: You stake your 500 HULK tokens in Vault for 20 days (480 hours). Your HULK/hours equal to 500\480=240,000. Total* HULK/hours in Vault in this month — 60,000,000. Your share in this month = 0,4%. HFT fund has earned 4% on staking pool funds this month. After payout of their 1,25% (15%/12) per month to USDT stakers, the remaining part is 10,000,000 USDT x 2,75% = 275,000 USD. Your profit share 0.4% of 275,000 = 1100 USDT will be sent as USDT to your address, connected with a Vault.”

All of the above described by the tokens creators seems very complicated, but many tokens are already trying to accomplish this without access to an already built fund which can execute trades on a daily basis. Also due in part is the projects commitment to becoming a DAO by allowing holders to vote on key project decisions and development to make the ecosystem more effective and manageable. Decentralization is the most trustworthy base of contract/cryptocurrency ownership. It creates a unique and secure environment free from direct outside influence due to the filter of the entire community being involved. The developers have said that the voting system for the project will be done within the first 30 days of project launch.

With lofty ambition and high expectations, the project looks to capitalize on the DeFi boom by hedging their fund against the market and giving holders a share of the pie. It will be interesting to see how successful and sustainable the project can be, but we will find out soon enough.

Pertinent Hulk.Finance Links:



(I write articles and reviews for legitimate, interesting, up and coming cryptocurrency projects. Feel free to PM me to review your project. Thank you!)
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
Disclaimer: This is not financial advice. The sole purpose of this post/article is to provide and create an informative and educated discussion regarding the project in question. Invest at your own risk.
submitted by Chrisc9234 to CryptoCurrencies [link] [comments]

Hulk.Finance: A Combination of DeFi and High Frequency Trading

Hulk.Finance: A Combination of DeFi and High Frequency Trading
DeFi continues to push the limits of blockchain technology. Whether its staking a native token for a second token from the same ecosystem, locking liquidity for an eternity to promote liquidity providing and the benefits of locking tokens, or simply creating new tokenomics that can be tested and studied, DeFi is exploring all avenues to produce the next breakout token such as YFI. Hulk.finance has stepped in to do just that.

https://preview.redd.it/j5qhdouxect51.png?width=675&format=png&auto=webp&s=f054e18e44a59d2328850373cbce91c648875670

Hulk.finance (Contract Address: 0xE1f8CD01aB04b51d02C6fb2BCA61B03fB5e33B99) is an ERC20 token which plans to utilize a DAO (Decentralized Autonomous Organization) format that will be community governed in order to promote high frequency trading in a manner only DeFi can bring to the table. As stated on their website, “Our project connects a high-yield partner HFT (High Frequency Trading) fund that has successfully worked from the beginning of 2020 and has year-to-date yields of more than 40%. The fund size is more than 70 millions USD and they operate on several cryptocurrency exchanges like Binance and Bithumb with their API robots. What is good — automated trading does not require continuous uptrend of the Bitcoin price. We have seen good results during Bitcoin breakouts and breakdowns. We want to have the same yields from our investments. But there is a problem — they work with an entrance barrier of 1,000,000 USDT, like many private banking services or high-yield ETFs. Our basic idea is to make a kind of DeFi staking pool and put it under the management of the HFT fund. We will develop all infrastructure for connecting finance flows, deposits, and withdrawals.

https://preview.redd.it/0e3j6i0zect51.png?width=717&format=png&auto=webp&s=0578f1dfd88142f6da788b39a2e90833fb627c51

The HULK total supply is 100,000 Tokens. Distribution breakdown is as follows:

  • Farms Distribution: 80,000 (6% or 4,800 — Team Part)
  • Pre-sale: 10,000
  • Initial Liquidity Pool: 8,000
  • Development: 1,000
  • Marketing: 1,000

https://preview.redd.it/xiz7f0i2fct51.png?width=717&format=png&auto=webp&s=85a8e7ccc13661cb6318ed845793ab4f70c729e3
The project is new but already has a road-map to help guide their lofty ambitions. The first step begins with the formation of the pre-sale and Liquidity pool on Uniswap which is currently ongoing. Secondly, they will distribute Hulk tokens via staking farms. As described in their website they “will run staking farms for farming 80,000 HULKs*. You will need to stake appropriate tokens on the selected farms to get your share of rewards in HULKs. Farm 1 will farm rewards of 60,000* HULKs within 15 days, staking token — ETH-HULK LP Uniswap V2. Farm 2 will farm rewards of 10,000 HULKs within 15 days, staking token — USDN. Farm 3 will farm rewards of 10,000 HULKs within 15 days, staking token — Token Y. Token Y will be announced prior to the farms’ launch. Genesis farming time will be 15 days, after that farming rate will be settled on the level of 15th day. We implement halving every three days, so early farmers will get more HULKs. View on Etherscan. In order to support the price of the token from dumping, we will take a 5% commission for the sale of tokens, when holders sell it on Uniswap, burn 4% and add 1% to the community grants account. The burnt amount will be added to farming pools after 15 days of initial farming. So, for example, if someone sold 20,000 HULKs, we will take 1,000 tokens, burn 800 of them and they will be re-minted on day 16. 200 tokens will be sent to the community grants address. The total supply is 100,000 tokens.”

The third step includes the staking pool. The staking pool will be open for everyone on the following terms and conditions.

  • Staking Pool 1 Target: 10 million USDT.
  • Guaranteed APY: 15%.
  • Minimum Staking Amount: 100 USDT.
  • Type Of Staking: Locked
  • Minimum Staking Term: 24 hours
  • Withdraw Period: 24 hours after withdrawal order.
  • Reward Calculation: daily.

Funds from the staking pool will be transferred to the HFT fund for trading operations.

Lastly, the Vault concept is descriptive. “We want to share revenue from HFT fund among HULK holders that stake their tokens in HULK Vault. HFT fund will send revenue from its operation once a month, on the first day of the following month. Current concept: Monthly revenue from HFT operations will be shared between HULK tokens staked in the vault according to the time of staking divided on 720 hours. Example: You stake your 500 HULK tokens in Vault for 20 days (480 hours). Your HULK/hours equal to 500*480=240,000. Total HULK/hours in Vault in this month — 60,000,000. Your share in this month = 0,4%. HFT fund has earned 4% on staking pool funds this month. After payout of their 1,25% (15%/12) per month to USDT stakers, the remaining part is 10,000,000 USDT x 2,75% = 275,000 USD. Your profit share 0.4% of 275,000 = 1100 USDT will be sent as USDT to your address, connected with a Vault.”

All of the above described by the tokens creators seems very complicated, but many tokens are already trying to accomplish this without access to an already built fund which can execute trades on a daily basis. Also due in part is the projects commitment to becoming a DAO by allowing holders to vote on key project decisions and development to make the ecosystem more effective and manageable. Decentralization is the most trustworthy base of contract/cryptocurrency ownership. It creates a unique and secure environment free from direct outside influence due to the filter of the entire community being involved. The developers have said that the voting system for the project will be done within the first 30 days of project launch.

With lofty ambition and high expectations, the project looks to capitalize on the DeFi boom by hedging their fund against the market and giving holders a share of the pie. It will be interesting to see how successful and sustainable the project can be, but we will find out soon enough.

Pertinent Hulk.Finance Links:



(I write articles and reviews for legitimate, interesting, up and coming cryptocurrency projects. Feel free to PM me to review your project. Thank you!)
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
Disclaimer: This is not financial advice. The sole purpose of this post/article is to provide and create an informative and educated discussion regarding the project in question. Invest at your own risk.
submitted by Chrisc9234 to ethtrader [link] [comments]

Syscoin Platform’s Great Reddit Scaling Bake-off Proposal

Syscoin Platform’s Great Reddit Scaling Bake-off Proposal

https://preview.redd.it/rqt2dldyg8e51.jpg?width=1044&format=pjpg&auto=webp&s=777ae9d4fbbb54c3540682b72700fc4ba3de0a44
We are excited to participate and present Syscoin Platform's ideal characteristics and capabilities towards a well-rounded Reddit Community Points solution!
Our scaling solution for Reddit Community Points involves 2-way peg interoperability with Ethereum. This will provide a scalable token layer built specifically for speed and high volumes of simple value transfers at a very low cost, while providing sovereign ownership and onchain finality.
Token transfers scale by taking advantage of a globally sorting mempool that provides for probabilistically secure assumptions of “as good as settled”. The opportunity here for token receivers is to have an app-layer interactivity on the speed/security tradeoff (99.9999% assurance within 10 seconds). We call this Z-DAG, and it achieves high-throughput across a mesh network topology presently composed of about 2,000 geographically dispersed full-nodes. Similar to Bitcoin, however, these nodes are incentivized to run full-nodes for the benefit of network security, through a bonded validator scheme. These nodes do not participate in the consensus of transactions or block validation any differently than other nodes and therefore do not degrade the security model of Bitcoin’s validate first then trust, across every node. Each token transfer settles on-chain. The protocol follows Bitcoin core policies so it has adequate code coverage and protocol hardening to be qualified as production quality software. It shares a significant portion of Bitcoin’s own hashpower through merged-mining.
This platform as a whole can serve token microtransactions, larger settlements, and store-of-value in an ideal fashion, providing probabilistic scalability whilst remaining decentralized according to Bitcoin design. It is accessible to ERC-20 via a permissionless and trust-minimized bridge that works in both directions. The bridge and token platform are currently available on the Syscoin mainnet. This has been gaining recent attention for use by loyalty point programs and stablecoins such as Binance USD.

Solutions

Syscoin Foundation identified a few paths for Reddit to leverage this infrastructure, each with trade-offs. The first provides the most cost-savings and scaling benefits at some sacrifice of token autonomy. The second offers more preservation of autonomy with a more narrow scope of cost savings than the first option, but savings even so. The third introduces more complexity than the previous two yet provides the most overall benefits. We consider the third as most viable as it enables Reddit to benefit even while retaining existing smart contract functionality. We will focus on the third option, and include the first two for good measure.
  1. Distribution, burns and user-to-user transfers of Reddit Points are entirely carried out on the Syscoin network. This full-on approach to utilizing the Syscoin network provides the most scalability and transaction cost benefits of these scenarios. The tradeoff here is distribution and subscription handling likely migrating away from smart contracts into the application layer.
  2. The Reddit Community Points ecosystem can continue to use existing smart contracts as they are used today on the Ethereum mainchain. Users migrate a portion of their tokens to Syscoin, the scaling network, to gain much lower fees, scalability, and a proven base layer, without sacrificing sovereign ownership. They would use Syscoin for user-to-user transfers. Tips redeemable in ten seconds or less, a high-throughput relay network, and onchain settlement at a block target of 60 seconds.
  3. Integration between Matic Network and Syscoin Platform - similar to Syscoin’s current integration with Ethereum - will provide Reddit Community Points with EVM scalability (including the Memberships ERC777 operator) on the Matic side, and performant simple value transfers, robust decentralized security, and sovereign store-of-value on the Syscoin side. It’s “the best of both worlds”. The trade-off is more complex interoperability.

Syscoin + Matic Integration

Matic and Blockchain Foundry Inc, the public company formed by the founders of Syscoin, recently entered a partnership for joint research and business development initiatives. This is ideal for all parties as Matic Network and Syscoin Platform provide complementary utility. Syscoin offers characteristics for sovereign ownership and security based on Bitcoin’s time-tested model, and shares a significant portion of Bitcoin’s own hashpower. Syscoin’s focus is on secure and scalable simple value transfers, trust-minimized interoperability, and opt-in regulatory compliance for tokenized assets rather than scalability for smart contract execution. On the other hand, Matic Network can provide scalable EVM for smart contract execution. Reddit Community Points can benefit from both.
Syscoin + Matic integration is actively being explored by both teams, as it is helpful to Reddit, Ethereum, and the industry as a whole.

Proving Performance & Cost Savings

Our POC focuses on 100,000 on-chain settlements of token transfers on the Syscoin Core blockchain. Transfers and burns perform equally with Syscoin. For POCs related to smart contracts (subscriptions, etc), refer to the Matic Network proposal.
On-chain settlement of 100k transactions was accomplished within roughly twelve minutes, well-exceeding Reddit’s expectation of five days. This was performed using six full-nodes operating on compute-optimized AWS c4.2xlarge instances which were geographically distributed (Virginia, London, Sao Paulo Brazil, Oregon, Singapore, Germany). A higher quantity of settlements could be reached within the same time-frame with more broadcasting nodes involved, or using hosts with more resources for faster execution of the process.
Addresses used: 100,014
The demonstration was executed using this tool. The results can be seen in the following blocks:
612722: https://sys1.bcfn.ca/block/6d47796d043bb4c508d29123e6ae81b051f5e0aaef849f253c8f3a6942a022ce
612723: https://sys1.bcfn.ca/block/8e2077f743461b90f80b4bef502f564933a8e04de97972901f3d65cfadcf1faf
612724: https://sys1.bcfn.ca/block/205436d25b1b499fce44c29567c5c807beaca915b83cc9f3c35b0d76dbb11f6e
612725: https://sys1.bcfn.ca/block/776d1b1a0f90f655a6bbdf559ff5072459cbdc5682d7615ff4b78c00babdc237
612726: https://sys1.bcfn.ca/block/de4df0994253742a1ac8ac9eec8d2a8c8b0a6d72c53d6f3caa29bb6c171b0a6b
612727: https://sys1.bcfn.ca/block/e5e167c52a9decb313fbaadf49a5e34cb490f8084f642a850385476d4ef10d70
612728: https://sys1.bcfn.ca/block/ab64d989edc71890e7b5b8491c20e9a27520dc45a5f7c776d3dae79057f59fe7
612729: https://sys1.bcfn.ca/block/5e8b7ecd0e36f99d07e4ea6e135fc952bf7ec30164ab6f4d1e98b0f2d405df6d
612730: https://sys1.bcfn.ca/block/d395df3d31dde60bbb0bece6bd5b358297da878f0beb96be389e5f0e043580a3
It is important to note that this POC is not focused on Z-DAG. The performance of Z-DAG has been benchmarked within realistic network conditions: Whiteblock’s audit is publicly available. Network latency tests showed an average TPS around 15k with burst capacity up to 61k. Zero-latency control group exhibited ~150k TPS. Mainnet testing of the Z-DAG network is achievable and will require further coordination and additional resources.
Even further optimizations are expected in the upcoming Syscoin Core release which will implement a UTXO model for our token layer bringing further efficiency as well as open the door to additional scaling technology currently under research by our team and academic partners. At present our token layer is account-based, similar to Ethereum. Opt-in compliance structures will also be introduced soon which will offer some positive performance characteristics as well. It makes the most sense to implement these optimizations before performing another benchmark for Z-DAG, especially on the mainnet considering the resources required to stress-test this network.

Cost Savings

Total cost for these 100k transactions: $0.63 USD
See the live fee comparison for savings estimation between transactions on Ethereum and Syscoin. Below is a snapshot at time of writing:
ETH price: $318.55 ETH gas price: 55.00 Gwei ($0.37)
Syscoin price: $0.11
Snapshot of live fee comparison chart
Z-DAG provides a more efficient fee-market. A typical Z-DAG transaction costs 0.0000582 SYS. Tokens can be safely redeemed/re-spent within seconds or allowed to settle on-chain beforehand. The costs should remain about this low for microtransactions.
Syscoin will achieve further reduction of fees and even greater scalability with offchain payment channels for assets, with Z-DAG as a resilience fallback. New payment channel technology is one of the topics under research by the Syscoin development team with our academic partners at TU Delft. In line with the calculation in the Lightning Networks white paper, payment channels using assets with Syscoin Core will bring theoretical capacity for each person on Earth (7.8 billion) to have five on-chain transactions per year, per person, without requiring anyone to enter a fee market (aka “wait for a block”). This exceeds the minimum LN expectation of two transactions per person, per year; one to exist on-chain and one to settle aggregated value.

Tools, Infrastructure & Documentation

Syscoin Bridge

Mainnet Demonstration of Syscoin Bridge with the Basic Attention Token ERC-20
A two-way blockchain interoperability system that uses Simple Payment Verification to enable:
  • Any Standard ERC-20 token to be moved from Ethereum to the Syscoin blockchain as a Syscoin Platform Token (SPT), and back to Ethereum
  • Any SPT to be moved from Syscoin to the Ethereum blockchain as an ERC-20 token, and back to Syscoin

Benefits

  • Permissionless
  • No counterparties involved
  • No trading mechanisms involved
  • No third-party liquidity providers required
  • Cross-chain Fractional Supply - 2-way peg - Token supply maintained globally
  • ERC-20s gain vastly improved transactionality with the Syscoin Token Platform, along with the security of bitcoin-core-compliant PoW.
  • SPTs gain access to all the tooling, applications and capabilities of Ethereum for ERC-20, including smart contracts.
https://preview.redd.it/l8t2m8ldh8e51.png?width=1180&format=png&auto=webp&s=b0a955a0181746dc79aff718bd0bf607d3c3aa23
https://preview.redd.it/26htnxzfh8e51.png?width=1180&format=png&auto=webp&s=d0383d3c2ee836c9f60b57eca35542e9545f741d

Source code

https://github.com/syscoin/?q=sysethereum
Main Subprojects

API

Tools to simplify using Syscoin Bridge as a service with dapps and wallets will be released some time after implementation of Syscoin Core 4.2. These will be based upon the same processes which are automated in the current live Sysethereum Dapp that is functioning with the Syscoin mainnet.

Documentation

Syscoin Bridge & How it Works (description and process flow)
Superblock Validation Battles
HOWTO: Provision the Bridge for your ERC-20
HOWTO: Setup an Agent
Developer & User Diligence

Trade-off

The Syscoin Ethereum Bridge is secured by Agent nodes participating in a decentralized and incentivized model that involves roles of Superblock challengers and submitters. This model is open to participation. The benefits here are trust-minimization, permissionless-ness, and potentially less legal/regulatory red-tape than interop mechanisms that involve liquidity providers and/or trading mechanisms.
The trade-off is that due to the decentralized nature there are cross-chain settlement times of one hour to cross from Ethereum to Syscoin, and three hours to cross from Syscoin to Ethereum. We are exploring ways to reduce this time while maintaining decentralization via zkp. Even so, an “instant bridge” experience could be provided by means of a third-party liquidity mechanism. That option exists but is not required for bridge functionality today. Typically bridges are used with batch value, not with high frequencies of smaller values, and generally it is advantageous to keep some value on both chains for maximum availability of utility. Even so, the cross-chain settlement time is good to mention here.

Cost

Ethereum -> Syscoin: Matic or Ethereum transaction fee for bridge contract interaction, negligible Syscoin transaction fee for minting tokens
Syscoin -> Ethereum: Negligible Syscoin transaction fee for burning tokens, 0.01% transaction fee paid to Bridge Agent in the form of the ERC-20, Matic or Ethereum transaction fee for contract interaction.

Z-DAG

Zero-Confirmation Directed Acyclic Graph is an instant settlement protocol that is used as a complementary system to proof-of-work (PoW) in the confirmation of Syscoin service transactions. In essence, a Z-DAG is simply a directed acyclic graph (DAG) where validating nodes verify the sequential ordering of transactions that are received in their memory pools. Z-DAG is used by the validating nodes across the network to ensure that there is absolute consensus on the ordering of transactions and no balances are overflowed (no double-spends).

Benefits

  • Unique fee-market that is more efficient for microtransaction redemption and settlement
  • Uses decentralized means to enable tokens with value transfer scalability that is comparable or exceeds that of credit card networks
  • Provides high throughput and secure fulfillment even if blocks are full
  • Probabilistic and interactive
  • 99.9999% security assurance within 10 seconds
  • Can serve payment channels as a resilience fallback that is faster and lower-cost than falling-back directly to a blockchain
  • Each Z-DAG transaction also settles onchain through Syscoin Core at 60-second block target using SHA-256 Proof of Work consensus
https://preview.redd.it/pgbx84jih8e51.png?width=1614&format=png&auto=webp&s=5f631d42a33dc698365eb8dd184b6d442def6640

Source code

https://github.com/syscoin/syscoin

API

Syscoin-js provides tooling for all Syscoin Core RPCs including interactivity with Z-DAG.

Documentation

Z-DAG White Paper
Useful read: An in-depth Z-DAG discussion between Syscoin Core developer Jag Sidhu and Brave Software Research Engineer Gonçalo Pestana

Trade-off

Z-DAG enables the ideal speed/security tradeoff to be determined per use-case in the application layer. It minimizes the sacrifice required to accept and redeem fast transfers/payments while providing more-than-ample security for microtransactions. This is supported on the premise that a Reddit user receiving points does need security yet generally doesn’t want nor need to wait for the same level of security as a nation-state settling an international trade debt. In any case, each Z-DAG transaction settles onchain at a block target of 60 seconds.

Syscoin Specs

Syscoin 3.0 White Paper
(4.0 white paper is pending. For improved scalability and less blockchain bloat, some features of v3 no longer exist in current v4: Specifically Marketplace Offers, Aliases, Escrow, Certificates, Pruning, Encrypted Messaging)
  • 16MB block bandwidth per minute assuming segwit witness carrying transactions, and transactions ~200 bytes on average
  • SHA256 merge mined with Bitcoin
  • UTXO asset layer, with base Syscoin layer sharing identical security policies as Bitcoin Core
  • Z-DAG on asset layer, bridge to Ethereum on asset layer
  • On-chain scaling with prospect of enabling enterprise grade reliable trustless payment processing with on/offchain hybrid solution
  • Focus only on Simple Value Transfers. MVP of blockchain consensus footprint is balances and ownership of them. Everything else can reduce data availability in exchange for scale (Ethereum 2.0 model). We leave that to other designs, we focus on transfers.
  • Future integrations of MAST/Taproot to get more complex value transfers without trading off trustlessness or decentralization.
  • Zero-knowledge Proofs are a cryptographic new frontier. We are dabbling here to generalize the concept of bridging and also verify the state of a chain efficiently. We also apply it in our Digital Identity projects at Blockchain Foundry (a publicly traded company which develops Syscoin softwares for clients). We are also looking to integrate privacy preserving payment channels for off-chain payments through zkSNARK hub & spoke design which does not suffer from the HTLC attack vectors evident on LN. Much of the issues plaguing Lightning Network can be resolved using a zkSNARK design whilst also providing the ability to do a multi-asset payment channel system. Currently we found a showstopper attack (American Call Option) on LN if we were to use multiple-assets. This would not exist in a system such as this.

Wallets

Web3 and mobile wallets are under active development by Blockchain Foundry Inc as WebAssembly applications and expected for release not long after mainnet deployment of Syscoin Core 4.2. Both of these will be multi-coin wallets that support Syscoin, SPTs, Ethereum, and ERC-20 tokens. The Web3 wallet will provide functionality similar to Metamask.
Syscoin Platform and tokens are already integrated with Blockbook. Custom hardware wallet support currently exists via ElectrumSys. First-class HW wallet integration through apps such as Ledger Live will exist after 4.2.
Current supported wallets
Syscoin Spark Desktop
Syscoin-Qt

Explorers

Mainnet: https://sys1.bcfn.ca (Blockbook)
Testnet: https://explorer-testnet.blockchainfoundry.co

Thank you for close consideration of our proposal. We look forward to feedback, and to working with the Reddit community to implement an ideal solution using Syscoin Platform!

submitted by sidhujag to ethereum [link] [comments]

The Undiscovered Facts Behind Money Laundering, Cryptocurrency, and Banks

The Undiscovered Facts Behind Money Laundering, Cryptocurrency, and Banks
A week ago, a lot of documents known as the FinCEN documents were delivered, enumerating how the absolute greatest banks on the globe move trillions of dollars in dubious exchanges for suspected psychological militants, kleptocrats, and drug top dogs. Also, the U.S. government has neglected to stop it.
https://preview.redd.it/lme57jyyx1r51.jpg?width=1200&format=pjpg&auto=webp&s=014ead7b7b812b3d6cbaf4a141eeec123589121b
The Financial Crimes Enforcement Network ("FinCEN"), an agency inside the Treasury Department, accused of battling tax evasion, psychological militant financing, and other monetary violations. An assortment of "dubious movement reports" offers a window into budgetary debasement, and how governments can't or reluctant to stop it. Benefits from destructive medication wars, fortunes stole from creating nations, and hard-earned investment funds taken in Ponzi plans, all course through money related establishments, in spite of admonitions from bank workers.
These reports are available to US law enforcement agencies and other nations’ financial intelligence operations. Although FinCEN is aware of the money laundering activities, it lacks the authority to stop it.
Money laundering is more than a financial crime. It is a tool that makes all other crimes possible - from drug trafficking to political crimes. And banks make it all possible. In a detailed expose, BuzzFeedNews named several of the most trusted banks. Current investigations show that even after fines and prosecutions, well-known JPMorgan Chase JPM (+0.9%), HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon BK (+0.8%) are all involved in moving funds for suspected criminals.
The current money related framework generally protects the banks and its heads from the indictment, inasmuch as the bank documents a notification with FinCEN that it might be encouraging crime. The dubious movement alert adequately gives the banks a free pass. Thus, unlawful finances keep on moving through banks into different businesses from oil to amusement to land, further isolating the rich from poor people, while the banks we have developed to trust, make everything conceivable.
As indicated by the United Nations, the assessed measure of cash laundered universally in one year is 2 to 5% of the worldwide GDP, or $800 billion to $2 trillion, with more than thank 90% of illegal tax avoidance going undetected today.
Simultaneously, the cryptocurrency industry has likewise been condemned for being an apparatus for tax evasion, in spite of insights expressing something else. It is assessed that solitary 1.1% of all digital currency exchanges are illegal. During its initial days, Bitcoin was generally connected with the Silk Road, an online dim net commercial center, where clients could buy weapons and unlawful medications namelessly.
Be that as it may, with the developing utilization of the Bitcoin organization, 42 million Bitcoin wallets, and checking, it is getting progressively conceivable to follow exchanges on open blockchains, while private financial exchanges stay covered up on display.
This week, I had a chance to plunk down with Chanpeng Zhao "CZ", the Founder and CEO of Binance, the biggest cryptographic money trade by volume on the planet, to get his interpretation of illegal tax avoidance both in the customary and the computerized fund universes.
Coming up next are a couple of features from our meeting:
Much obliged to you for going along with us today, CZ. As you would see it, for what reason is illegal tax avoidance especially destructive to our economy?
CZ: As monetary administration suppliers, it is our obligation to battle unlawful action. Everybody shares this duty. Yet, regularly once the principles are set up, individuals will attempt to get around the guidelines. What's more, there are individuals who simply need more business, and knowing or unconsciously will encourage these exchanges. We live in an intricate world, where one nation may see a go about as criminal and the other may not. Many individuals have a high contrast see, yet the world is really dim. Not all banks are honest and not all crypto organizations are terrible.
The digital currency industry has experienced harsh criticism for encouraging unlawful exchanges. How would you think conventional money and digital currency businesses analyze in such manner?
CZ: If you are utilizing Bitcoin, it is a straightforward record. When you have a couple of exchanges, you can follow the assets right back to where the coins were mined. So along these lines, blockchain really gives a straightforward record to everybody to dissect. In the event that you piece together a couple of information focuses and do a group examination, it isn't that difficult for a calculation to break down the beginning. Security coins are more earnestly to follow, yet their market top isn't unreasonably high, making bigger exchanges more troublesome. So to be completely forthright, it is a lot simpler to make illegal exchanges utilizing fiat than utilizing crypto.
How might you analyze the volume of illegal exchanges in crypto versus fiat?
CZ: It's likely a thousand times less. Essentially, for any important measure of cash you need to move in the crypto, it is exceptionally difficult to move it namelessly. There are outsider checking devices and information bases that can coordinate a considerable lot of the addresses to known people. The digital currency market top is little to the point, that in the event that you are moving a $100 million dollars, you can't do as such without experiencing an incorporated trade, making it considerably simpler to follow.
The cryptographic money space overall was begun by Satoshi Nakomoto as to some degree a campaign against the defilement of banks. Remarkably, the beginning square of Bitcoin contained a commentary tending to the bailouts of banks in 2008 and 2009 ["The Times 3 January 2009 - Chancellor on edge of second bailout for banks."] Is that ethos still alive in the digital currency space today, the drive to bring down the enormous person?
CZ: I have even more a fair view here. Some in the crypto space are against banks, fiat, and so forth., while others think digital forms of money are utilized by drug masters. Those are two extraordinary perspectives. My view is that digital money offers opportunities - a further extent of opportunity in exchanges, ventures, property, reserve funds, and so on. We are simply offering another choice for clients who esteem that opportunity and control. I'm not against any bank or any single individual. I think crypto offers a higher opportunity of cash, and thusly we need to give more individuals admittance to crypto… If I don't care for the banks, I simply don't utilize them.
Where do you feel the equalization lies between the legislature securing its residents as opposed to encouraging advancement?
CZ: I accept governments ought to be public administrations. They ought to give streets and fire departments...Whenever there is government intercession, it is awful for the economy. At whatever point an administration encourages one gathering, it naturally harms another. The administration influences the parity of the economy giving assistance to a gathering that isn't sufficiently serious to remain alive. So at whatever point an administration rescues huge banks, or any business so far as that is concerned, they just appear as though they are making a difference. I have confidence in a free economy, and I buy into that way of thinking unequivocally.
Much obliged to you for your understanding, CZ.
More information about PrivateX: www.privatex.io
PrivateX is a private wallet for sending, receiving, and storing your Bitcoin and Ethereum.
If you are interested in services, contact us [[email protected]co](mailto:[email protected])
#moneylaundering #privatex #buybitcoin24 #binance #huobiglobal #kraken #crypto #bitcoin #consulting24 #buybitcoin #buybitcoinnow #blockchain #startacompanyinestonia #companyinestonia #estonia #cryptoexchanges #privatexcoin
submitted by privatex-wallet to u/privatex-wallet [link] [comments]

Want to know why NEM should be as popular as Ethereum? this will be bigger than any altcoins you see, here's why

Want to know why NEM should be as popular as Ethereum? this will be bigger than any altcoins you see, here's why

Altcoin Explorer: NEM (XEM), the Enterprise-Grade Blockchain Platform


https://preview.redd.it/5ogfihikwkg51.png?width=1300&format=png&auto=webp&s=099780e02777d16d4e2add64b249c46da1cd488b
Nestled among the top 40 cryptocurrencies by reported market cap, New Economy Movement — popularly known as NEM (XEM) – is a peer-to-peer (P2P), dual-layer blockchain smart contract platform written in one of the most influential programming languages, Java. NEM uses the proof-of-importance (POI) consensus algorithm that essentially values the tokens held and the activity conducted by the nodes on the blockchain network.
In this Altcoin Explorer, BTCManager delves deeper into the finer intricacies of the NEM blockchain protocol, including the project’s POI consensus algorithm, its native digital token XEM, and some of its real-world use-cases.
Without further ado, let’s get to the core of this high-performance distributed ledger technology (DLT) platform.

History of NEM

NEM was launched on March 31, 2015, with an aim to develop an enterprise-grade blockchain protocol that could circumvent the infamous trilemma of blockchain: scalability, speed, and privacy.
Operated by a Gibraltar-registered NEM Group, NEM is a fork-out version of the NXT blockchain. After the successful fork, the NEM community decided to build its ecosystem from the ground up and developed its own codebase to make the network more scalable and faster.
NEM’s insistence toward building its own tech infrastructure led to a DLT protocol that is unlike anything resembling other similar platforms.
Today, NEM ranks among the top go-to blockchain platforms for enterprises across the world, rivaling competing protocols including Ethereum (ETH), and TRON (TRX), among others.

NEM’s Proof-of-Importance (POI) Algorithm

Unlike Bitcoin’s (BTC) energy-intensive Proof-of-Work (PoW) and Ethereum’s yet-to-be-implemented Proof-of-Stake (PoS) consensus algorithm, NEM uses PoI consensus mechanism.
The PoI mechanism achieves consensus by incentivizing active user participation in the NEM network. This consensus infrastructure ensures an agile decentralized network by rewarding well-behaved nodes that not only possess a significant stake in the network but are also actively engaged in executing transactions to maintain the network’s robustness.
Specifically, each node in the network possesses an ‘Importance Score’ that impacts the number of times the said node can ‘Harvest’ the XEM altcoin.
Initially, when a user puts XEM tokens into their wallet, they are called ‘unvested coins.’ Over time, as the wallets start accumulating an increasing number of XEM and contribute to the network’s transaction volume, they start collecting importance scores. At the same time, the XEM tokens in these wallets change into ‘vested coins,’ provided that there are at least 10000 tokens in the wallet.
To put things into perspective, let’s take the help of a small example.
On day 1, Joe receives 50,000 XEM in his digital wallet. Now, with each passing day, the NEM network will ‘vest’ 10 percent of the tokens held by Joe. So, on day 2, 5,000 tokens held by Joe are vested into the network. On day 3, 10 percent of the remaining tokens – 15,000 XEM – get vested into the network, leaving Joe with 13,500 XEM, and so one. After a couple of days, Joe sees that the number of XEM vested by him has crossed the 10,000 coins threshold, thereby, making him eligible to seek rewards from the NEM blockchain for his contribution to vesting his tokens.
Close followers of blockchain projects would find the aforementioned network reward mechanism bear a close resemblance to the PoS consensus algorithm. However, it’s worthy of note that vesting coins is just one way of calculating a node’s importance score.
The NEM protocol also rewards nodes that are responsible for most activity on the network. In essence, this means that the higher the number of transactions executed by a node, the more likely it is to gain higher importance points. The balance between vesting XEM and network activity is an important metric to be maintained by NEM nodes as it directly impacts their likelihood of harvesting XEM.
NEM’s consensus algorithm does away with several issues plaguing the more energy-intensive protocols such as PoW. For instance, PoI does not necessarily require high-energy hardware to run the nodes. The decentralized nature of the algorithm means that almost any machine — irrespective of its tech configuration – can participate in the NEM ecosystem ensuring it remains decentralized.

NEM’s Native Digital Token — XEM

XEM, unlike the vast majority of other cryptocurrencies, isn’t mined or staked using Pow or PoS algorithms. Rather, as explained earlier, XEM is ‘harvested’ through the PoI algorithm which ensures a steady supply of the digital token without flooding the market and involving the risk of a dramatic crash in price.
Per data on CoinMarketCap, at the time of writing, XEM trades at $0.04 with a market cap of more than $382 million and a 24-hour trading volume of approximately $6.8 million. The coin reached its all-time high of $1.92 in January 2018.
A large number of reputable cryptocurrency exchanges trade XEM, including Binance, Upbit, OKEx, Bithumb, ProBit, among others. The digital token can be easily traded with BTC, ETH, and USDT trading pairs.
That said, if you wish to vest your XEM to partake in the maintenance of the NEM network and earn rewards, it is recommended you store your tokens in the official NEM Nano wallet for desktop and mobile OS. Only XEM tokens held in the official NEM Nano wallet are eligible for vesting.

NEM Use-Cases

To date, NEM has been deployed for various real-world applications with promising results.
In 2018, Ukraine launched a blockchain-based e-voting trial leveraging the NEM DLT platform.
At the time, Ukraine’s Central Election Commission – with the local NEM Foundation representation – estimated the test vote trial in each polling station could cost as low as $1,227. The organization’s Oleksandr Stelmakh lauded the efforts, saying that using a blockchain-powered voting mechanism would make it impossible for anyone to fiddle with the records. The Commission added that the NEM protocol presents information in a more user-friendly format for voters.
In the same year, Malaysia’s Ministry of Education launched an e-scroll system based on the NEM blockchain to tackle the menace of fake degrees. The University Degree Issuance and Verification System use the NEM blockchain which is interrogated upon scanning of a QR code printed on the degree certificate.
The Ministry added that one of the primary reasons for its decision to selected the NEM platform was its unique and cutting-edge features in managing traceability and authentication requirements.
On a recent note, the Bank of Lithuania announced that it would be issuing its NEM blockchain-powered digital collector’s coin (LBCoin) in July after the successful completion of its testing phase.

Final Thoughts

Summing up, NEM offers a wide array of in-house features that separate it from other blockchain projects in a space that is becoming increasingly congested. NEM’s creative PoI consensus algorithm is a fresh take on the PoS algorithm for performance enhancement. Further, the project’s newly launched enterprise-grade DLT solution, Symbol, offers a tremendous option to businesses to help them cut costs, reduce complexities, and streamline innovation.
NEM uses the Java programming language that makes it an easy project for developers to get involved with, unlike other projects such as Ethereum that use platform-specific programming languages like Solidity. The project’s tech infrastructure not only makes it less power-intensive compared to Bitcoin but also more scalable than its rival projects including Ethereum and NEO.
NEM’s tagline, “Smart Asset Blockchain, Built for Performance,” perfectly captures everything the project has to offer. Over the years, NEM’s active developer community has craftily addressed the notorious bottlenecks in the vast majority of blockchain solutions, The future looks promising for NEM as it continues to foster a trustless and blockchain-driven economy for tomorrow.
Source
submitted by charlesgwynne to CryptocurrencyICO [link] [comments]

Weekly Update: ParJar Swap private beta, Fantom Opera Network Special-fee Contract, SelfKey + ThreeFold, Open Staking live on Harmony…– 15 May - 21 May'20

Weekly Update: ParJar Swap private beta, Fantom Opera Network Special-fee Contract, SelfKey + ThreeFold, Open Staking live on Harmony…– 15 May - 21 May'20
Hey Parachuters! Seems like ages since I last posted a weekly update, right? Unfortunately, got super busy with IRL work and couldn’t keep up. But fret not! I finally scraped some time out today to get upto speed with all the news from the Parachute universe in May and June and organised them into a series of weekly updates like the ones I used to write earlier. But instead of posting them one by one everyday, thought it might be best to release them all at one go. So here's Part I of VI - All that happened at Parachute + partners from 15 May - 21 May'20:

The ParJar swap feature beta testing started this week with a call to testers far and wide. Click here for the latest update and stats on ParJar straight from Cap's mouth - "...it took almost two years of betas and growth to reach 1 million tips (March 7th) nd it’s taken 2 months to to add another 400k..". Amazing! The #par4par raffle continues with a 500k $PAR pool. Peace Love hosted a general knowledge trivia in TTR this week for 10k $PAR in prizes. Gamerboy’s random trivia and Victor’s “Big Trivia” in Tiproom were quite fun as well. Naj (who’s also this week’s Parena winner) hosted a six set quiz in TTR. Charlotte’s been hosting quizzes in a new format for quite some time now. This week too she held one in Tiproom. Jason started a #culturalweekend prompt with an invitation to Parachuters to share "about a cultural dance or ceremony" from their area. "Explain in detail about the dance and why it is important" for some cool $PAR. Among many of the cool stories shared by Parachuters included Nico’s Occitan music from Italy and Soleira’s Dancing Devils of Tinaquillo. Congratulations to Clinton’s FLI charity for partnering with Lumenthropy which is Stellar's philanthropic arm. Remember, all profits from the Parachute Shop go to FLI. Another crypto league with a 150k $PAR prize pot started this week. Gian’s Two-For-Tuesday was a free for all. To revisit all the awesome music posted for 2FT, check out the playlist made by Sebastian.
Naj came back from near certain defeat in the finale to win this week’s Parena
aXpire CEO Matthew Markham penned an article on remote work and billing software for legal firms. An updated e-flyer for Bilr was released as well. To track the latest $AXPR burn, click here. 2gether added customer support capabilities to their Twitter, Facebook and Discord. Plus, an incident tracker status page was added this week. The XIO dApp which is still in private beta has already seen 500k+ $XIO tokens locked into it. Awesome! To get a feel of how the dApp works, check out Dash’s latest video demo where he also shared some updates on tokenomics. Uptrennd founder Jeff Kirdeikis interviewed Dash over an hour long session to talk all things XIO. $XIO got listed on Idex. Click here to watch an update video on the latest developments. For XIO discussions this week, Citizens brainstormed over the base liquidity pair on Uniswap V2. DeFi Nation’s Clayton Roche wrote a detailed commentary on what XIO is doing right. Birdchain’s mid-May update came out this week. Voyager hosted a business update conference call this week. CEO Steve Ehrlich talked about the platform and crypto in general with Charlie Shrem on the Untold Stories podcast this week. Voyager’s Q3 2020 results were released. Still figuring out how to fund your Voyager wallet? Watch this video to find out. An upgrade to Fantom’s Opera Network was pushed which allows staking different amounts over time. For the latest project update, click here. A community AMA also happened this week where the team talked about a new staking proposal called Fluid Staking. Jeff from Uptrennd sat down to interview IOST co-founder Terry Wang this week. Uptrennd broke into the top 20k Alexa global rankings. Woohoo! GET Protocol’s GUTS Tickets app is now available in Italian as well. DoYourTip’s $DYT is now available on Uniswap V2.
What a welcome sight for support engineers. Source: https://2gether.statuspage.io/history
Switch’s $ESH token was listed on Stex, ProBit, Crex 24, Hotbit, Bilaxy and Bitcoin.com this week. Bitcoin.com also announced support for the $GHOST airdrop along with a deposit and trade competition. Continuing on its acquisition spree from last week, Switch acquired gaming platform Wavesbet and voting dApp ClearPoll. Whitepaper for the GHOST project by John McAfee was released. They will be airdropping their tokens 1:1 to $ESH HODLers on the 25th. The release of $GHOST has been contentious to say the least. Reflecting on some of the plagiarism allegations levelled against the project, the crew shared their side of the story. The team also sat down for an AMA with Coiner Vietnam. District0x’s latest weekly update talked about the upcoming DappDigest and new developments in Meme Factory among other news. The Q4 2019 quarterly report was released as well. Read all about Hydro’s Financial Offers framework here. If you are a graphic designer, don’t forget to check out this gig at Sentivate. US-residents only. OST’s Simona Pop will be attending a panel discussion by Outlier Ventures next week to talk about dev onboarding. P2P internet ecosystem ThreeFold announced a multi-faceted partnership with SelfKey for KYC and new user onboarding services. Following last week's community vote on the most attractive marketplaces, Passports Marketplace was found to be the most popular. This week, the community voted on their most preferred blockchain to be added to the app. Bank of Hodlers joined SelfKey's Loans Marketplace while Tokens.net joined the Exchanges Marketplace. COTI did a study on IoT payments and how it could offer a solution. The project was selected for the next listing vote on Gate.io. COTI community also got an opportunity to interact with the AtomicWallet team through an AMA this week.
Hydro has been constantly updating its dev tools to offer a seamless developer experience
Click here to read the latest Constellation Hypergraph mainnet stats. New features were added to the Molly wallet. Click here for steps to install the wallet. TheDailyChain expanded on how the $DAG ecosystem was growing. Pynk CEO Seth Ward wrote about the future of fintech in his EM360 article. Congratulations on crossing the 1k follower mark on Medium. In Shuffle Monster news, most of the $SHUF liquidity on Uniswap was moved to the V2 pool this week. New features were added to the Wibson app with the latest release giving more data control powers to the end user. Pre-staking started on the Harmony mainnet with the opening up of bids by validators followed by the election of the first batch of validators thereby marking the start of Open Staking. And just after, Harmony became the first ever blockchain to support sharded PoS. The news of Open Staking going live was covered by Coindesk and Cointelegraph. More details on what next was shared in a Coinspeaker article. How does a delegator fit into the overall scheme of things? Check out this video. Open staking noobs will find these 101 tutorials helpful. CTO Rongjian Lan also did a community call to explain about it. For the latest development updates otherwise known as #pow thread, click here. Harmony’s EPoS is designed to be fair to all stakers. So make sure to optimise your staking rewards. $ONE Binance wallets were taken down briefly for a temporary maintenance activity. They now support the mainnet coin. Hope you had a chance to participate in the guess-effective-median-stake contest to win some cool $ONE prizes. Click here for the latest staking stats. $ONE was added to Binance Savings which offers a fixed rate of return on locked savings. A minor bug in the staking bug was removed. The APR numbers should get calculated more accurately now. The crew appeared for an AMA with StakingHub. Congratulations to the winners of Stake Heist! Binance and BitMax announced support for staking with BItMax crew also appearing for an AMA. IntelliShare crew sat down for an AMA with CoinNess this week.

And with that, we have to close for this week in the Parachuteverse! See you again with another update. Ciao!
submitted by abhijoysarkar to ParachuteToken [link] [comments]

How To End The Cryptocurrency Exchange "Wild West" Without Crippling Innovation


In case you haven't noticed the consultation paper, staff notice, and report on Quadriga, regulators are now clamping down on Canadian cryptocurrency exchanges. The OSC and other regulatory bodies are still interested in industry feedback. They have not put forward any official regulation yet. Below are some ideas/insights and a proposed framework.



Many of you have limited time to read the full proposal, so here are the highlights:

Offline Multi-Signature

Effective standards to prevent both internal and external theft. Exchange operators are trained and certified, and have a legal responsibility to users.

Regular Transparent Audits

Provides visibility to Canadians that their funds are fully backed on the exchange, while protecting privacy and sensitive platform information.

Insurance Requirements

Establishment of basic insurance standards/strategy, to expand over time. Removing risk to exchange users of any hot wallet theft.


Background and Justifications


Cold Storage Custody/Management
After reviewing close to 100 cases, all thefts tend to break down into more or less the same set of problems:
• Funds stored online or in a smart contract,
• Access controlled by one person or one system,
• 51% attacks (rare),
• Funds sent to the wrong address (also rare), or
• Some combination of the above.
For the first two cases, practical solutions exist and are widely implemented on exchanges already. Offline multi-signature solutions are already industry standard. No cases studied found an external theft or exit scam involving an offline multi-signature wallet implementation. Security can be further improved through minimum numbers of signatories, background checks, providing autonomy and legal protections to each signatory, establishing best practices, and a training/certification program.
The last two transaction risks occur more rarely, and have never resulted in a loss affecting the actual users of the exchange. In all cases to date where operators made the mistake, they've been fully covered by the exchange platforms.
• 51% attacks generally only occur on blockchains with less security. The most prominent cases have been Bitcoin Gold and Ethereum Classic. The simple solution is to enforce deposit limits and block delays such that a 51% attack is not cost-effective.
• The risk of transactions to incorrect addresses can be eliminated by a simple test transaction policy on large transactions. By sending a small amount of funds prior to any large withdrawals/transfers as a standard practice, the accuracy of the wallet address can be validated.
The proposal covers all loss cases and goes beyond, while avoiding significant additional costs, risks, and limitations which may be associated with other frameworks like SOC II.

On The Subject of Third Party Custodians
Many Canadian platforms are currently experimenting with third party custody. From the standpoint of the exchange operator, they can liberate themselves from some responsibility of custody, passing that off to someone else. For regulators, it puts crypto in similar categorization to oil, gold, and other commodities, with some common standards. Platform users would likely feel greater confidence if the custodian was a brand they recognized. If the custodian was knowledgeable and had a decent team that employed multi-sig, they could keep assets safe from internal theft. With the right protections in place, this could be a great solution for many exchanges, particularly those that lack the relevant experience or human resources for their own custody systems.
However, this system is vulnerable to anyone able to impersonate the exchange operators. You may have a situation where different employees who don't know each other that well are interacting between different companies (both the custodian and all their customers which presumably isn't just one exchange). A case study of what can go wrong in this type of environment might be Bitpay, where the CEO was tricked out of 5000 bitcoins over 3 separate payments by a series of emails sent legitimately from a breached computer of another company CEO. It's also still vulnerable to the platform being compromised, as in the really large $70M Bitfinex hack, where the third party Bitgo held one key in a multi-sig wallet. The hacker simply authorized the withdrawal using the same credentials as Bitfinex (requesting Bitgo to sign multiple withdrawal transactions). This succeeded even with the use of multi-sig and two heavily security-focused companies, due to the lack of human oversight (basically, hot wallet). Of course, you can learn from these cases and improve the security, but so can hackers improve their deception and at the end of the day, both of these would have been stopped by the much simpler solution of a qualified team who knew each other and employed multi-sig with properly protected keys. It's pretty hard to beat a human being who knows the business and the typical customer behaviour (or even knows their customers personally) at spotting fraud, and the proposed multi-sig means any hacker has to get through the scrutiny of 3 (or more) separate people, all of whom would have proper training including historical case studies.
There are strong arguments both for and against using use of third party custodians. The proposal sets mandatory minimum custody standards would apply regardless if the cold wallet signatories are exchange operators, independent custodians, or a mix of both.

On The Subject Of Insurance
ShakePay has taken the first steps into this new realm (congratulations). There is no question that crypto users could be better protected by the right insurance policies, and it certainly feels better to transact with insured platforms. The steps required to obtain insurance generally place attention in valuable security areas, and in this case included a review from CipherTrace. One of the key solutions in traditional finance comes from insurance from entities such as the CDIC.
However, historically, there wasn't found any actual insurance payout to any cryptocurrency exchange, and there are notable cases where insurance has not paid. With Bitpay, for example, the insurance agent refused because the issue happened to the third party CEO's computer instead of anything to do with Bitpay itself. With the Youbit exchange in South Korea, their insurance claim was denied, and the exchange ultimately ended up instead going bankrupt with all user's funds lost. To quote Matt Johnson in the original Lloyd's article: “You can create an insurance policy that protects no one – you know there are so many caveats to the policy that it’s not super protective.”
ShakePay's insurance was only reported to cover their cold storage, and “physical theft of the media where the private keys are held”. Physical theft has never, in the history of cryptocurrency exchange cases reviewed, been reported as the cause of loss. From the limited information of the article, ShakePay made it clear their funds are in the hands of a single US custodian, and at least part of their security strategy is to "decline[] to confirm the custodian’s name on the record". While this prevents scrutiny of the custodian, it's pretty silly to speculate that a reasonably competent hacking group couldn't determine who the custodian is. A far more common infiltration strategy historically would be social engineering, which has succeeded repeatedly. A hacker could trick their way into ShakePay's systems and request a fraudulent withdrawal, impersonate ShakePay and request the custodian to move funds, or socially engineer their way into the custodian to initiate the withdrawal of multiple accounts (a payout much larger than ShakePay) exploiting the standard procedures (for example, fraudulently initiating or override the wallet addresses of a real transfer). In each case, nothing was physically stolen and the loss is therefore not covered by insurance.
In order for any insurance to be effective, clear policies have to be established about what needs to be covered. Anything short of that gives Canadians false confidence that they are protected when they aren't in any meaningful way. At this time, the third party insurance market does not appear to provide adequate options or coverage, and effort is necessary to standardize custody standards, which is a likely first step in ultimately setting up an insurance framework.
A better solution compared to third party insurance providers might be for Canadian exchange operators to create their own collective insurance fund, or a specific federal organization similar to the CDIC. Such an organization would have a greater interest or obligation in paying out actual cases, and that would be it's purpose rather than maximizing it's own profit. This would be similar to the SAFU which Binance has launched, except it would cover multiple exchanges. There is little question whether the SAFU would pay out given a breach of Binance, and a similar argument could be made for a insurance fund managed by a collective of exchange operators or a government organization. While a third party insurance provider has the strong market incentive to provide the absolute minimum coverage and no market incentive to payout, an entity managed by exchange operators would have incentive to protect the reputation of exchange operators/the industry, and the government should have the interest of protecting Canadians.

On The Subject of Fractional Reserve
There is a long history of fractional reserve failures, from the first banks in ancient times, through the great depression (where hundreds of fractional reserve banks failed), right through to the 2008 banking collapse referenced in the first bitcoin block. The fractional reserve system allows banks to multiply the money supply far beyond the actual cash (or other assets) in existence, backed only by a system of debt obligations of others. Safely supporting a fractional reserve system is a topic of far greater complexity than can be addressed by a simple policy, and when it comes to cryptocurrency, there is presently no entity reasonably able to bail anyone out in the event of failure. Therefore, this framework is addressed around entities that aim to maintain 100% backing of funds.
There may be some firms that desire but have failed to maintain 100% backing. In this case, there are multiple solutions, including outside investment, merging with other exchanges, or enforcing a gradual restoration plan. All of these solutions are typically far better than shutting down the exchange, and there are multiple cases where they've been used successfully in the past.

Proof of Reserves/Transparency/Accountability
Canadians need to have visibility into the backing on an ongoing basis.
The best solution for crypto-assets is a Proof of Reserve. Such ideas go back all the way to 2013, before even Mt. Gox. However, no Canadian exchange has yet implemented such a system, and only a few international exchanges (CoinFloor in the UK being an example) have. Many firms like Kraken, BitBuy, and now ShakePay use the Proof of Reserve term to refer to lesser proofs which do not actually cryptographically prove the full backing of all user assets on the blockchain. In order for a Proof of Reserve to be effective, it must actually be a complete proof, and it needs to be understood by the public that is expected to use it. Many firms have expressed reservations about the level of transparency required in a complete Proof of Reserve (for example Kraken here). While a complete Proof of Reserves should be encouraged, and there are some solutions in the works (ie TxQuick), this is unlikely to be suitable universally for all exchange operators and users.
Given the limitations, and that firms also manage fiat assets, a more traditional audit process makes more sense. Some Canadian exchanges (CoinSquare, CoinBerry) have already subjected themselves to annual audits. However, these results are not presently shared publicly, and there is no guarantee over the process including all user assets or the integrity and independence of the auditor. The auditor has been typically not known, and in some cases, the identity of the auditor is protected by a NDA. Only in one case (BitBuy) was an actual report generated and publicly shared. There has been no attempt made to validate that user accounts provided during these audits have been complete or accurate. A fraudulent fractional exchange, or one which had suffered a breach they were unwilling to publicly accept (see CoinBene), could easily maintain a second set of books for auditors or simply exclude key accounts to pass an individual audit.
The proposed solution would see a reporting standard which includes at a minimum - percentage of backing for each asset relative to account balances and the nature of how those assets are stored, with ownership proven by the auditor. The auditor would also publicly provide a "hash list", which they independently generate from the accounts provided by the exchange. Every exchange user can then check their information against this public "hash list". A hash is a one-way form of encryption, which fully protects the private information, yet allows anyone who knows that information already to validate that it was included. Less experienced users can take advantage of public tools to calculate the hash from their information (provided by the exchange), and thus have certainty that the auditor received their full balance information. Easy instructions can be provided.
Auditors should be impartial, their identities and process public, and they should be rotated so that the same auditor is never used twice in a row. Balancing the cost of auditing against the needs for regular updates, a 6 month cycle likely makes the most sense.

Hot Wallet Management
The best solution for hot wallets is not to use them. CoinBerry reportedly uses multi-sig on all withdrawals, and Bitmex is an international example known for their structure devoid of hot wallets.
However, many platforms and customers desire fast withdrawal processes, and human validation has a cost of time and delay in this process.
A model of self-insurance or separate funds for hot wallets may be used in these cases. Under this model, a platform still has 100% of their client balance in cold storage and holds additional funds in hot wallets for quick withdrawal. Thus, the risk of those hot wallets is 100% on exchange operators and not affecting the exchange users. Since most platforms typically only have 1%-5% in hot wallets at any given time, it shouldn't be unreasonable to build/maintain these additional reserves over time using exchange fees or additional investment. Larger withdrawals would still be handled at regular intervals from the cold storage.
Hot wallet risks have historically posed a large risk and there is no established standard to guarantee secure hot wallets. When the government of South Korea dispatched security inspections to multiple exchanges, the results were still that 3 of them got hacked after the inspections. If standards develop such that an organization in the market is willing to insure the hot wallets, this could provide an acceptable alternative. Another option may be for multiple exchange operators to pool funds aside for a hot wallet insurance fund. Comprehensive coverage standards must be established and maintained for all hot wallet balances to make sure Canadians are adequately protected.

Current Draft Proposal

(1) Proper multi-signature cold wallet storage.
(a) Each private key is the personal and legal responsibility of one person - the “signatory”. Signatories have special rights and responsibilities to protect user assets. Signatories are trained and certified through a course covering (1) past hacking and fraud cases, (2) proper and secure key generation, and (3) proper safekeeping of private keys. All private keys must be generated and stored 100% offline by the signatory. If even one private keys is ever breached or suspected to be breached, the wallet must be regenerated and all funds relocated to a new wallet.
(b) All signatories must be separate background-checked individuals free of past criminal conviction. Canadians should have a right to know who holds their funds. All signing of transactions must take place with all signatories on Canadian soil or on the soil of a country with a solid legal system which agrees to uphold and support these rules (from an established white-list of countries which expands over time).
(c) 3-5 independent signatures are required for any withdrawal. There must be 1-3 spare signatories, and a maximum of 7 total signatories. The following are all valid combinations: 3of4, 3of5, 3of6, 4of5, 4of6, 4of7, 5of6, or 5of7.
(d) A security audit should be conducted to validate the cold wallet is set up correctly and provide any additional pertinent information. The primary purpose is to ensure that all signatories are acting independently and using best practices for private key storage. A report summarizing all steps taken and who did the audit will be made public. Canadians must be able to validate the right measures are in place to protect their funds.
(e) There is a simple approval process if signatories wish to visit any country outside Canada, with a potential whitelist of exempt countries. At most 2 signatories can be outside of aligned jurisdiction at any given time. All exchanges would be required to keep a compliant cold wallet for Canadian funds and have a Canadian office if they wish to serve Canadian customers.
(2) Regular and transparent solvency audits.
(a) An audit must be conducted at founding, after 3 months of operation, and at least once every 6 months to compare customer balances against all stored cryptocurrency and fiat balances. The auditor must be known, independent, and never the same twice in a row.
(b) An audit report will be published featuring the steps conducted in a readable format. This should be made available to all Canadians on the exchange website and on a government website. The report must include what percentage of each customer asset is backed on the exchange, and how those funds are stored.
(c) The auditor will independently produce a hash of each customer's identifying information and balance as they perform the audit. This will be made publicly available on the exchange and government website, along with simplified instructions that each customer can use to verify that their balance was included in the audit process.
(d) The audit needs to include a proof of ownership for any cryptocurrency wallets included. A satoshi test (spending a small amount) or partially signed transaction both qualify.
(e) Any platform without 100% reserves should be assessed on a regular basis by a government or industry watchdog. This entity should work to prevent any further drop, support any private investor to come in, or facilitate a merger so that 100% backing can be obtained as soon as possible.
(3) Protections for hot wallets and transactions.
(a) A standardized list of approved coins and procedures will be established to constitute valid cold storage wallets. Where a multi-sig process is not natively available, efforts will be undertaken to establish a suitable and stable smart contract standard. This list will be expanded and improved over time. Coins and procedures not on the list are considered hot wallets.
(b) Hot wallets can be backed by additional funds in cold storage or an acceptable third-party insurance provider with a comprehensive coverage policy.
(c) Exchanges are required to cover the full balance of all user funds as denominated in the same currency, or double the balance as denominated in bitcoin or CAD using an established trading rate. If the balance is ever insufficient due to market movements, the firm must rectify this within 24 hours by moving assets to cold storage or increasing insurance coverage.
(d) Any large transactions (above a set threshold) from cold storage to any new wallet addresses (not previously transacted with) must be tested with a smaller transaction first. Deposits of cryptocurrency must be limited to prevent economic 51% attacks. Any issues are to be covered by the exchange.
(e) Exchange platforms must provide suitable authentication for users, including making available approved forms of two-factor authentication. SMS-based authentication is not to be supported. Withdrawals must be blocked for 48 hours in the event of any account password change. Disputes on the negligence of exchanges should be governed by case law.

Steps Forward

Continued review of existing OSC feedback is still underway. More feedback and opinions on the framework and ideas as presented here are extremely valuable. The above is a draft and not finalized.
The process of further developing and bringing a suitable framework to protect Canadians will require the support of exchange operators, legal experts, and many others in the community. The costs of not doing such are tremendous. A large and convoluted framework, one based on flawed ideas or implementation, or one which fails to properly safeguard Canadians is not just extremely expensive and risky for all Canadians, severely limiting to the credibility and reputation of the industry, but an existential risk to many exchanges.
The responsibility falls to all of us to provide our insight and make our opinions heard on this critical matter. Please take the time to give your thoughts.
submitted by azoundria2 to QuadrigaInitiative [link] [comments]

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