Author Topic: sidechains and trustless gateways  (Read 2846 times)

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Offline moinyoin

I had some ideas recently. Why couldn't we make a transactions over DEX using external (sidechain) wallets metadata (private keys as well) placed inside encrypted memos of transactions? Any research on the approach?

You wouldn't want to reveal the entire private key to where you're sending. It would have to be modified specifically for graphene chains, I don't know of any work on this yet, but I can't think of anything more important.

Offline cptnSolo

I had some ideas recently. Why couldn't we make a transactions over DEX using external (sidechain) wallets metadata (private keys as well) placed inside encrypted memos of transactions? Any research on the approach?

Offline moinyoin

My point is that running a trustless gateway on BTS DEX is possible right now using bitAssets. How this gateway makes profit is another question. Evidently, transwiser knows how to do this, because this is what they do, they run a gateway which uses bitCNY.

I'm really curious how they do it. Do they buy it on the exchange or do they borrow it into existence.

Borrowing has risk of liquidation. Buying has slippage. It's interesting.

By the way, I just realized it wouldn't really be trustless as gateway won't be decentralized - you can send BTC there and might not get bitBTC asset, likewise you can send bitBTC asset and not get BTC (but can clearly get BTS out). That's the kind of worry that would be ideal to remove.

Offline yvv

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Openledger would not need to be trusted if they used bitAssets for their gateway instead of IOU, like transwiser does. BTS would still need to be traded against 1:1 pegged assets though to produce the price feed.

This doesn't make sense. Bitassets are a product of the Bitshares DAC, and are decentralized. How would a centralized exchange that is operating on the BTS DEX utilize Bitassets in a useful or profitable way that isn't already covered by the utility of the Bitassets themselves?

In other words, it doesn't make sense for OpenLedger to utilize Bitassets as a middle-man, because the whole point of Bitassets is to have stable, backed tokens without any middle-men.

My point is that running a trustless gateway on BTS DEX is possible right now using bitAssets. How this gateway makes profit is another question. Evidently, transwiser knows how to do this, because this is what they do, they run a gateway which uses bitCNY.


Offline fluxer555

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Openledger would not need to be trusted if they used bitAssets for their gateway instead of IOU, like transwiser does. BTS would still need to be traded against 1:1 pegged assets though to produce the price feed.

This doesn't make sense. Bitassets are a product of the Bitshares DAC, and are decentralized. How would a centralized exchange that is operating on the BTS DEX utilize Bitassets in a useful or profitable way that isn't already covered by the utility of the Bitassets themselves?

In other words, it doesn't make sense for OpenLedger to utilize Bitassets as a middle-man, because the whole point of Bitassets is to have stable, backed tokens without any middle-men.

Offline moinyoin

Openledger would not need to be trusted if they used bitAssets for their gateway instead of IOU, like transwiser does. BTS would still need to be traded against 1:1 pegged assets though to produce the price feed.

You're right. Even if a gateway provider leaves with all their real BTC, bitBTC would still be redeemable for that much worth of BTS.

On downside:
There's definitely liquidity issues for now with less popular bit assets which would make the job for gateway to replenish supply difficult.
It would also make it more difficult for sending for example real BTC out of BTS account.

Offline R

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When EOS  delivers what they promise, I'll move all my funds into it and forget about bitshares. Until then, I don't care neither about EOS nor about EOS sidechain.
Well it's a good thing we've got at least a year before then, so let's get brainstorming some ideas!

Offline yvv

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When EOS  delivers what they promise, I'll move all my funds into it and forget about bitshares. Until then, I don't care neither about EOS nor about EOS sidechain.

Offline R

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Sidechains (2 way peg) would be excellent, however wouldn't it potentially make EBAs redundant?

I think it'd be far less politically controversial to sidechain with eos than to migrate/merge BTS into/onto EOS.

Offline paliboy

Having trustless gateways would be awesome. Could we issue feature-backed asset for this?

Offline yvv

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Openledger would not need to be trusted if they used bitAssets for their gateway instead of IOU, like transwiser does. BTS would still need to be traded against 1:1 pegged assets though to produce the price feed.
« Last Edit: August 01, 2017, 01:30:04 pm by yvv »

Offline moinyoin

I saw old discussions about sidechains but couldn't find a new one and I think this is incredibly important for dex to have.

The DEX looks fantastic and has been doing really well as I summarized in this bitcointalk thread: https://bitcointalk.org/index.php?topic=1949828.0

Two major developments recently:
1) EOS coming out which much benefit possible for connecting DEX to it
2) Bitcoin got segwit making atomic swaps and sidechains easier

With EOS there are 2 major paths: (1) move to EOS and make it work or (2) sidechain to EOS and create basically trustless gateways

Additionally, the only criticism there is for bitshares is that gateways are trusted, so providing (2) sidechain bridges would be incredibly important for other coins like BTC as well even if (1) is done.

What I'm saying is instead of trusting openledger to return real BTC for open.BTC there could be drivechain / atomic swaps to trade between BTC and sidechain.BTC assets so people wouldn't have to worry about openledger gateway being solvent or around next year to redeem.

Atomic swaps: https://themerkle.com/what-is-an-atomic-swap/
Drivechain: http://www.truthcoin.info/blog/drivechain/

Imagine use of slow atomic swaps to load coins onto the dex in trustless manner while then having full trustless ultra high transaction capabilities of the bts DEX.

Potential collaboration with blocknet? They could be added as a trustless gateway as they are slowly adding coins to their collection. Currently they work with QTUM, DGB, PIVX, NMC, DOGE, MUE, VTC, SYS, LTC, DYN, DASH, VIA, and I'm guessing BTC after segwit is next. They are experts in atomic swaps, bts are experts in trustless fiat pegged assets, speed, and dex.
 
They think it's a great idea and they have the most experience with atomic swaps: https://twitter.com/The_Blocknet/status/890890575452491776



I see 2 main initial candidates for sidechains as priority: BTC (w/ segwit) and STEEM

1. BTC would introduce the broadest network effect allowing people to basically use BTS DEX as their wallet and pay in BTC for anything they want anywhere BTC is accessible. This would help people transition into sending around sidechain.BTC on bts chain instead of BTC network. This would be similar in concept to how people think rsk will evolve. Having trustless BTC/bitUSD market would be incredible that's easily redeemable.

2. STEEM is closest thing to EOS on livenet right now and would show if sidechain to it or EOS is practical. BTS devs have very good native understanding of both blockchains and would be best positioned to take advantage of it. Even if some graphene projects port to EOS, sidechain knowledge could come in useful for those that do not.


How to fund?

Can someone with technical understanding of bts side make at least a research proposal into this as a worker? It makes sense, right?

If getting uncertain project funded is issue, alternative would be to at least fund early research into it from volunteer donations (like others do but using DEX) with an asset sold from a multisig account in hands of active bigshots here putting up a sell wall like RNDSIDECHAIN1 vs bitUSD and using those funds to pay researcher(s) in weekly increments.

Being universal hub for trade for bitshares would be essential, but whether it's on EOS or on BTS, connecting to other blockchains in trustless manner is a must have imo.

What are your thoughts?
« Last Edit: August 06, 2017, 07:05:38 pm by moinyoin »