Category Archives: Decentralization
EigenLayer Unveils Restaked Rollups In Collaboration With AltLayer – The Defiant – DeFi News
New tooling will enable developers to quickly spin up app-specific networks without compromising on decentralization.
Restaking protocol EigenLayer and rollup solution provider AltLayer have introduced a concept called restaked rollups, which could solve key issues for Ethereum scaling.
To that end, AltLayer is offering three services which will, in theory, allow developers to quickly spin up their own app-specific rollups, without sacrificing decentralization or compromising on speed.
EigenLayer allows users to restake their staked Ether or liquid staking tokens (LSTs) to secure other services in addition to the Ethereum blockchain. Third-party systems secured by EigenLayer are called Actively Validated Services (AVS).
In the context of the partnership, EigenLayer provides the security for AltLayers rollups as AVS.
Rollup networks, which are Layer 2 scaling solutions for Ethereum, have been a recurring theme this year, attracting more than $16B of assets to their chains. Arbitrum is currently the leading L2, with roughly half the sectors total value locked (TVL).
However, spinning up a rollup that offers fast and cheap transactions without compromising on decentralization has proved to be a massive technical challenge.
The biggest hurdle for rollup developers lies in sequencers, key pieces of software responsible for ordering, processing and aggregating transactions on a rollup before posting their results to the main chain.
Currently, leading rollups like Arbitrum and Optimism control their own sequencers. With the use of such centralized sequencers, the projects could potentially rearrange transactions to favor certain parties which would be antithetical to decentralization.
However, as AltLayer points out, the teams reputation and the number of people observing major chains like Aribitrum and Optimism have made centralized sequencers an acceptable design choice, at least in the short term.
This centralization risk increases when dealing with individual developers looking to spin up a small-scale rollup. Enough people arent watching the chain, so its hard for such projects to develop user trust.
Despite this, tooling has emerged for developers to deploy their own rollups Arbitrum, Optimism, and others have released software development kits (SDKs) to simplify the process. These SDKs dont provide all the tooling to make small-scale rollups strongly decentralized, which is where AltLayer and Eigenlayer are looking to step in.
Eigenlayer and AltLayer are part of an emerging design paradigm in the Ethereum space centered around modular blockchains. The core idea is that developers can pick and choose different providers to take on various aspects of a rollups architecture.
The restaking rollup framework may prove to be another step along the way to a crypto stack where developers can deploy fully decentralized rollups within minutes.
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EigenLayer Unveils Restaked Rollups In Collaboration With AltLayer - The Defiant - DeFi News
OCEAN Aims To Further Bitcoin Mining Decentralisation In 2024 – Forbes
EDITORIAL USE (Photo by BRIAN BIELMANN/AFP via Getty ImagesAFP via Getty Images
On Tuesday, Nov 28, legendary Bitcoin Core developer Luke Dashjr announced the launch of OCEAN mining, which closed a $6.2M round led by Block Head Jack Dorsey as a new type of mining pool that aims to decentralize bitcoin mining.
As Luke put it in a communique on Oct 31, OCEAN is "a new type of pool that enables miners to be truly miners again."
Bitcoin mining today is primarily done via pooled mining, which requires miners to point their hashrate to a mining pool that aggregates this towards mining blocks and subsequently makes payouts to these miners. Nearly all mining pools communicate using a now outdated protocol introduced in 2012 called Stratum V1, which only lets the pool have the final say on which transactions ultimately make it into a block.
In the aforementioned communique from Oct 31, Luke highlights that "the centralization and overreach of other pool operators has changed Bitcoin to the point where the security model of Bitcoin is at high risk." Adding, "Pools operate like custodial bank accounts and have the ability to decide who can and who can't use Bitcoin."
It is for these reasons that increasing efforts are underway to decentralize bitcoin mining to address the issues with the existing Stratum V1 protocol, the consequences of having dominant mining pools in certain regions, and having mining done by a handful of pools.
OCEAN, a Wyoming-based company, co-founded by Bitcoin Core developer Luke Dashjr, is a non-custodial pool that requires only a bitcoin address to join, and is the successor of the Eligius bitcoin mining pool (a popular zero-fee mining pool that had mined over 11,631 blocks), which Luke founded and was operated from 2010-2017.
Since its launch, OCEAN has successfully found two blocks and operates at a hash rate of around 422.8 Ph/s. Additionally, as part of its commitment to transparency, the company displays its node policy and block templates on its website.
Over the last few weeks, discussions around handling data such as inscriptions on-chain have surfaced, with OCEAN being accused censoring these transactions, but seems to be a misunderstanding.
Due to OCEAN running a parallel implantation of the bitcoin node software, Knots, maintained by Luke, certain transactions in the above bucket go beyond the default maximum 42-byte datacarriersize limit (responsible for dictating the maximum size of data in data carrier transactions that get relayed and mined) which cause them to be excluded from the blocks it mines.
Currently, there are no Stratum V2 mining pools that engage in pooled mining, however, OCEAN intends to fully transition into using Stratum V2 and allow for payouts to miners over the Lightning Network.
As posted by Luke on Dec 8 on X, formerly Twitter, "OCEAN is on a path to decentralization, and very soon, we are going to be in a position where hashers will be able to fully participate as miners and perform the intelligent parts of mining such as deciding which version of node software to run and what filters or other policies to apply to block template construction."
Additionally, OCEAN is on a mission to build on its three core principles of being non-custodial, transparent, and permissionless by focusing its efforts in 2024, amongst other things, on "leveraging and improving Stratum V2" and incorporating "Lightning payouts, which will solve the dust problem for small miners."
The options for miners in 2024 are promising. The overall landscape of efforts focused on decentralizing bitcoin mining is also on a positive trend and, undoubtedly, a welcomed change for all miners globally.
I'm a Nigerian Bitcoin core contributor and the CEO of the Bitcoin venture capital firm Recursive Capital. I also serve as a board member of trust, a non-profit focused on training African bitcoin and lightning developers via Btrust builders and growing the African Bitcoin ecosystem.
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OCEAN Aims To Further Bitcoin Mining Decentralisation In 2024 - Forbes
BNP’s Election Strategy: Focus on Decentralization & Responsible Opposition – BNN Breaking
BNPs Strategic Stance: Abstaining from Elections & Emphasizing Decentralization
Majibur Rahaman, the Joint General Secretary of the Bangladesh Nationalist Party (BNP), has announced the partys decision to abstain from the forthcoming city corporation elections. During a recent press conference at the BNP Central Office, Rahaman stated that this move was a strategic choice rather than an indication of weakness. He emphasized the BNPs role as a responsible opposition party, consistently opposing any governmental policies or actions perceived as corrupt or unjust, while avoiding strikes, rallies, or destructive activities.
The BNP, during the press conference, unveiled a 24-point election manifesto that primarily focuses on decentralization. The party plans to upgrade existing divisions into provinces and rename them. New proposed names include Uttar Banga, Barindra, Jahangirnagar, Jalalabad, Jahanabad, Chandradwip, Pahar Maynamoti, and Chattala Province. A core part of this decentralization initiative entails transferring at least 50% of central government departments to these provincial capitals.
This restructuring aligns with the BNPs objective to establish a federal government structure in Bangladesh. This would also involve a complete overhaul of the Election Commission, ensuring it operates as a fully autonomous and impartial entity. Rahaman underlined that the BNPs primary aim has always been to safeguard the peoples interests and instigate positive changes in governance and administrative systems without resorting to disruptive measures.
In stark contrast to the BNPs stance, recent disruptions, including vandalism and arson attacks on the railway during a BNP-Jamaat called blockade, have caused physical harm to citizens and extensive damage to government property. These actions aim to obstruct the upcoming elections and the nations progress. The government and the people of Bangladesh are steadfastly against such acts of violence. They are resolute in preserving peace and continuing the countrys socio-economic development, even in the face of these challenges. A non-cooperation movement, urging people to boycott the upcoming general elections on 7 January, was announced by the BNP Senior Joint Secretary General Ruhul Kabir Rizvi during a virtual press conference.
In conclusion, while political unrest persists in Bangladesh, the BNP continues to emphasize its dedication to positive change and the protection of peoples interests. Despite the decision to abstain from the upcoming city corporation elections, the party remains committed to its strategies, focusing on decentralization and the establishment of a federal government structure. The BNPs stance is a testament to their aspiration for a more democratic and just society, without resorting to disruptive protests or acts of violence.
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BNP's Election Strategy: Focus on Decentralization & Responsible Opposition - BNN Breaking
EthereumPOW Core Team Disbands to Achieve Full Decentralization as OneDAO Provides Transitional Support – Cryptonews
The EthereumPOW core team is disbanding to achieve decentralized governance, with OneDAO providing temporary support. Image by Sergey Nivens, Adobe Stock.
The core development team behind the proof-of-work (PoW) fork of Ethereum announced on Tuesday its decision to dissolve EthereumPOWs centralized structure in favor of complete decentralization.
According to the announcement, the EthereumPOW core team will be disbanded in order to achieve full autonomy. Going forward, EthereumPOW will rely solely on PoW consensus and decentralized governance to become a deity-less public chain. This move hands over governance of the EthereumPOW blockchain to its community of users and miners.
Servers supporting the network will be transferred to OneDAO, a decentralized protocol on the Harmony blockchain. OneDAO will provide transitional maintenance for EthereumPOW until long-term ecosystem partners can be established.
Lead EthereumPOW developer Jadal Page explained the reasoning behind relinquishing centralized control.
We have explored and validated the feasibility of ETHW operating independently without Cores support, confirming the fundamental technical and operational conditions for ETHW in such a scenario, Page wrote in the announcement.
The Ethereum hard fork occurred in September 2022, just before the main Ethereum blockchain transitioned from PoW consensus to a more energy-efficient proof-of-stake model following the Merge upgrade.
Some developers and miners unhappy with the perceived centralization and loss of revenues created EthereumPOW to preserve the original PoW-based Ethereum. Since its launch, the forked token ETHW has struggled to gain adoption, however.
Grayscale decided against supporting ETHW in September, citing a lack of liquidity and custodial support. This removed a major source of potential demand. As a result, ETHW has declined from its launch price of $100 to around $2.59 currently.
By dissolving centralized control and embracing community governance, the EthereumPOW team hopes to reinvigorate the network. OneDAO will provide technical assistance during the transitional period as the developers step back. Still, success will ultimately hinge on whether the cryptocurrency community chooses to adopt EthereumPOW over the dominant Ethereum PoS blockchain.
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Polkadot: Can this metric aid with DOT price prediction – AMBCrypto News
Polkadot [DOT] has maintained its streak of sitting on top of the list of key metrics that signifies the degree of decentralization. This can generally be perceived as a positive update, and the blockchain technologys core value is decentralization.
But will this be enough for the token to register gains on its price chat?
Polkadot Insider recently posted a tweet highlighting the blockchains nakamoto coefficient.
For starters, the metric indicates the minimum amount of work required to disrupt any specific blockchain. Whenever the metric increases, it clearly indicates that it is more difficult to break a blockchain, making it more decentralized.
Coming back to the tweet, Polkadot Insider revealed that DOTs nakamoto coefficient stood at 92. This was commendable, as back in April 2023, DOTs metric was only at 70.
Apart from DOT, other notable blockchains that made it to the list include Mina Protocol [MINA], THORChain [RUNE], Avalanche [AVAX], and Solana [SOL]. However, decentralization alone might not be enough for DOT to make its investors profitable.
Like several cryptos, DOT has also witnessed a price correction in the recent past. To be precise, in the last 23 hours alone, the token was down by over 3%.
As per CoinMarketCap, at the time of writing, Polkadot was trading at $7.13 with a market capitalization of over $8.9 billion.
To see what went wrong, AMBCrypto took a look at the tokens liquidation levels.
Upon checking, we found that DOT failed to go above a key resistance level in the recent past. The token experienced a substantial hike in liquidation when its price reached $7.77, which resulted in a price correction.
It will be interesting to watch when the market revives and how soon DOT will be able to go above that level.
Therefore, AMBCrypto checked DOTs daily chart to understand what to expect from Polkadot in the near term. Polkadots MACD displayed the possibility of a bearish crossover soon.
Read Polkadots [DOT] Price Prediction 2023-24
Its Money Flow Index (MFI) also registered a slight downtick from the overbought zone, meaning that selling pressure on the token was high.
The possibility of a further drop in price was pointed out by another indicator. DOTs price touched the upper limit of the Bollinger Bands, which generally results in a price correction.
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Polkadot: Can this metric aid with DOT price prediction - AMBCrypto News
Kelp Is Crafting a Global Currency by Fusing Central Banking Theorem and Blockchain Decentralization – Yahoo Finance
Kelp
A currency designed to #GROWLIKEKELP through autonomous, decentralized mechanisms, ultimately becoming the foundation for a new global financial ecosystem.
St. Vincent and Grenadines, Dec. 12, 2023 (GLOBE NEWSWIRE) -- Kelpis a new cryptocurrency aiming to become the stable foundation of a modern, global financial ecosystem. Its mission is to succeed where other crypto projects have failed and deliver the promise of digital money by combining actual econometric models and central banking theorems.
Kelp is inspired by a growing demand within the crypto community for a stablecoin 2.0. Several prominent voices, such as Brian Armstrong of Coinbase and renowned investor Ray Dalio, have discussed the possibility of Flatcoin - a new stable cryptocurrency that could become a form of decentralized digital money with worldwide use.
Kelp's mission is to transcend the limitations of existing cryptocurrencies, striving to become the cornerstone of a new, global financial ecosystem. Unlike its predecessors, Kelp doesn't merely replicate current fiat currencies in digital form. Instead, it charts a fresh course towards universal adoption, applying the principles of central banking and sound monetary policy within a decentralized framework.
Drawing inspiration from Bitcoin, Kelp acknowledges the challenges faced by the most popular cryptocurrency in becoming a widely accepted form of digital money. Kelp addresses these issues head-on, especially the volatility stemming from Bitcoin's fixed supply. Through the integration of blockchain technology with a sophisticated econometric model, Kelp introduces a stability protocol the Kelp Protocol. This innovative approach positions Kelp to fulfill the essential functions of money: a medium of exchange, a unit of account, and a store of value.
The Kelp Protocol is engineered to stabilize the currency by analyzing market activity and predicting the optimal circulating supply. This system dynamically adjusts economic variables, such as interest rates, to influence market behavior, sidestepping direct market manipulation.
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Adding to its appeal, Kelp has launched a mobile application, available for both iOS and Android users. The Kelp App, inspired by the success of projects like Quahl (formerly Initiative Q), allows individuals worldwide to reserve future Kelp. Remarkably, this reservation process doesn't require financial commitment. Instead, users engage in community-building activities, like referrals and Action Tasks, to earn their stake in Kelp. Already, the app boasts a burgeoning community of 80,000 members.
As Kelp continues its journey, it stands as a testament to the potential of combining the best of traditional finance and decentralized innovation. With its unique model and growing user base, Kelp is not just a cryptocurrency but a movement paving the way for a stable, accessible digital economy.
About Kelp
Kelp is a Canadian fintech company comprising financial experts and crypto professionals led by entrepreneursEdward Bishop(founder and CEO) andRakshit Kumar(CTO and co-founder). Some of its partners include prestigious brands in the crypto space, such as industry-leading auditor SolidProof and crypto aggregator CoinMarketCap.
Kelp is developing an all-encompassing ecosystem of protocols and algorithms designed to bring about price stability. Currently, the company has an R&D division building KATE - Kelp's Autonomous Trading Engine - that will utilize the Kelp Reserve, Kelp DEX, and smart contracts to create a unique investment solution. This product will use hedge fund algorithms to analyze the market for opportunities. It will likely come online in the Q2 of 2024.
You can download the Kelp mobile from the Apple App Store and Google Play Store to try its innovative features.
Learn more about Kelp by following these links:Website|Twitter|LinkedIn
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XRP 100 USD Soon. In this discussion, well explore the | by Tom Holland | Dec, 2023 – Medium
In this discussion, well explore the XRP, the backbone of the Ripple offering, shedding light on its decentralization features and debunking common misconceptions.
Unraveling the Myth: Is XRP Centralized?
Cryptocurrency enthusiasts often find themselves in heated debates, and one recurring claim is that XRP is centralized. This accusation is often thrown around without a full grasp of the intricacies involved.
Ever encountered a Bitcoin Maximalist dismissing XRP as a centralized coin? The next time it happens, ask them to explain the XRP. This blockchain, a vital component of Ripples ecosystem, is frequently misunderstood, and yet, it stands as one of the most decentralized platforms in the vast cryptocurrency space.
Lets embark on a journey into the XRP, the blockchain ecosystem powered by the XRP token. The PL in XRP refers to the ledger, the digital archive of recorded transactions that constitutes a blockchain. Detractors often brand XRP as a centralized banking coin, oblivious to the fact that XRP is a permissionless and open-source blockchain ecosystem, comparable to many other layer one networks in the crypto realm.
At the heart of the XRP lies the native token, XRP, setting it apart from other layer one networks. XRP isnt just a cryptocurrency; its a utility within the XRP. It facilitates transaction fees, cross-border payments, and adds liquidity to various financial applications. Think of it as the lifeblood that keeps the XRP thriving.
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XRP 100 USD Soon. In this discussion, well explore the | by Tom Holland | Dec, 2023 - Medium
Unleashing the Power of Zerone: A Decentralized On-Chain Token Hybrid Contract Trading Protocol – Medium
In the ever-evolving landscape of blockchain technology and decentralized finance, Zerone emerges as a groundbreaking protocol designed to revolutionize on-chain token contract transactions. This decentralized system is built on various chain contracts, including Arbitrum, BSC, and Ethereum, fostering an open and accessible environment for users. In this article, we will explore the key features and advantages of Zerone, shedding light on its innovative design and how it addresses critical challenges in the world of decentralized finance.
Decentralization and Open Source:
Zerone distinguishes itself by being a decentralized protocol, providing users with a trustless and transparent platform for on-chain token contract transactions. The open-source nature of the contract underscores its commitment to inclusivity and collaboration within the blockchain community. This democratization of access aligns with the fundamental principles of decentralization, empowering users to engage in transactions freely without reliance on centralized authorities.
Multi-Chain Compatibility:
One of the strengths of Zerone lies in its compatibility with multiple chain contracts, offering users the flexibility to choose from platforms such as Arbitrum, BSC, and Ethereum. This interoperability enhances the protocols adaptability to different blockchain ecosystems, catering to the diverse needs and preferences of users across various networks.
Efficient Market Dynamics:
Zerone introduces an efficient market model through the utilization of on-chain token orders and economic incentives. This framework creates a dynamic environment for users, enabling them to participate in token transactions with reduced friction and enhanced market efficiency. The modular and scalable smart contracts further contribute to the protocols adaptability, allowing users to make continuous choices as they navigate the decentralized marketplace.
Zero Slippage Trading Mechanism:
At the heart of Zerones innovation is its zero slippage trading mechanism. Zero slippage, defined as the minimal difference between the expected and executed trade prices, empowers users to practice ultra-high leverage on perpetual contract platforms. This becomes especially significant in scenarios of low liquidity, where the real-time depth provided by centralized exchanges mitigates potential losses caused by slippage. Zerones zero slippage mechanism exemplifies its commitment to providing a seamless and secure trading experience for users.
Capital Efficiency and Leverage Activation:
Zerones design is focused on achieving high capital efficiency and leverage activation, resulting in increased capital utilization and higher returns for liquidity providers (LPs). The protocol facilitates the ability to profit from both upward and downward price fluctuations, offering users a versatile tool to navigate diverse market conditions.
Single Token Automated Market-Making:
Zerone incorporates a single token automated market-making (AMM) mechanism, similar to other successful protocols in the decentralized finance space. This mechanism simplifies user participation, requiring the community only to deposit tokens into the liquidity pool to earn transaction fees generated from trades. This design promotes inclusivity and liquidity provision, fostering a vibrant and engaged user community.
In conclusion, Zerone stands as a beacon of innovation in the decentralized finance arena, offering users a robust and efficient protocol for on-chain token contract transactions. From its multi-chain compatibility to the zero slippage trading mechanism and capital efficiency, Zerone addresses critical challenges and empowers users with a versatile and user-friendly platform. As the decentralized finance landscape continues to evolve, Zerones contributions mark a significant step towards a more accessible and efficient future for blockchain-based financial transactions.
Zerone Official Social Media Links!
English Twitter: @ZeroneDexChinese Twitter: @ZeroneDex_cnOfficial Telegram: @ZeroneDexDiscord: discord.gg/EKJjy2djDG
Visit our website: zeronedex.com
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Matter Labs Collaborates with Chainlink Labs, Joining Chainlink SCALE and Integrating Price Feeds on zkSync – Yahoo Finance
The native integration ofChainlink Price Feeds on zkSync will help enable the creation of high throughput DeFi protocols
SAN FRANCISCO, Dec. 12, 2023 /PRNewswire/ -- Matter Labs, an engineering and cryptography research company working on and developing software in relation to the zkSyncprotocol, a layer-2 trustless protocol that provides a scaling solution for Ethereum, and Chainlink Labs, the primary contributing developer of Chainlink, the decentralized computing platform powering the verifiable web, announced today that zkSync is joining the Chainlink SCALE (Sustainable Chainlink Access for Layer 1 and 2 Enablement) program to help propel the adoption of zkSync Era, the fastest zkEVM Ethereum layer-2 scaling solution. Additionally, Chainlink Price Feedsthe industry-leading price data solution underpinning the onchain economyare now live on zkSync Era.
zkSync is joining the Chainlink SCALE Program
zkSync's participation in SCALE will maximize its ecosystem's success by increasing its developers' access to industry-leading oracle data and services and further minimizing the gas costs that Chainlink nodes incur when submitting oracle reports for Data Feeds on zkSync Era. This deployment of resources will help zkSync realize its vision of preserving Web3's decentralization as it helps scale Ethereum while giving its ecosystem developers access to a wide range of reliable and low-cost oracle services for an extended period of time. This will set a foundation for zkSync to support highly scalable, fully featured, and secure applications.
"We're thrilled to see zkSync become a part of Chainlink SCALE, and to help drive its long-term network growth and sustainability," said Marco Cora, Senior Vice President of Business and Operations at Matter Labs. "Chainlink Price Feeds is a critical and industry-standard infrastructure that has wide reaching benefits for developers and users alike. Combined with our new prover, Boojum, and with our unique design around state differences, it will make zkSync the cheapest rollup for Oracle updates. This will open up a new design space to pave the way for new innovation and use cases."
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Chainlink SCALE is an initiative centered around sustainably accelerating the growth of blockchain and layer-2 ecosystems. Its focus is providing L1s/L2s with increased access to high-quality, low-cost, and in-demand oracle services by enabling them to cover operating costs (e.g. transaction gas fees) of Chainlink oracle networks for a period of time. As blockchain/L2 ecosystems in the Chainlink SCALE program mature, the operating costs of oracle networks can increasingly transition toward being fully covered by dApp user fees.
"We're pleased that zkSync has joined the Chainlink SCALE program to help empower developers with the industry standard Chainlink Price Feeds and other services, helping accelerate the adoption of zkSync Era," stated Johann Eid, Chief Business Officer at Chainlink Labs. "By reducing the operating costs of Chainlink orale nodes, zkSync can help ensure projects have access to the industry-leading services needed to build highly scalable, feature-rich, and secure applications."
Through the use of Chainlink Price Feeds on zkSync, developers can create advanced applications that maintain the strong reliability and security guarantees necessary to attract user funds, and then scale seamlessly as their total value locked (TVL) grows. This increases the overall liquidity within zkSync's DeFi ecosystem and propels network growth.
Ultimately, the native integration of Chainlink Price Feeds on zkSync helps developers leverage the massive security and scalability advantages inherent to zkSync's cutting-edge zk-rollup on Ethereum and will help enable the creation of high throughput DeFi protocols with robust security, paving the way for the mass adoption of Web3 technologies.
About ChainlinkChainlink is the industry-standard decentralized computing platform powering the verifiable web. Chainlink has enabled over $9 trillion in transaction value by providing financial institutions, startups, and developers worldwide with access to real-world data, offchain computation, and secure cross-chain interoperability across any blockchain. Chainlink powers verifiable applications and high-integrity markets for banking, DeFi, global trade, gaming, and other major sectors.
Learn more about Chainlink by visiting chain.link or reading the developer documentation at docs.chain.link. To discuss an integration, reach out to an expert.
About zkSynczkSync is cutting-edge zero-knowledge (ZK) technology to scale Ethereum and bring crypto to the mainstream reaching millions of developers and billions of people in need a technological solution for achieving progress and prosperity. Deeply rooted in its mission to advance personal freedom for all, the zkSync blockchain network makes digital self-ownership universally available. It is trustless, secure, reliable, censorship-resistant, privacy-preserving, hyperscalable, accessible, and sovereign. To learn more about zkSync, visit http://www.zksync.io.
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Revolutionizing Decentralized Finance: Zerone’s Hybrid Perpetual Contract Protocol – Medium
Decentralized finance (DeFi) has emerged as a groundbreaking paradigm, offering financial services without traditional intermediaries. Despite its growth, decentralized protocols supporting derivative or on-chain token contract trading remain rare and often lack significant utility. This article explores the challenges faced by existing decentralized exchanges and introduces the Hybrid Perpetual Contract protocol by Zerone, a decentralized solution facilitating trustless asset exchange and enabling complex financial positions.
The Need for Decentralized Derivative Trading
Centralized exchanges have struggled to provide sufficient trading options for all on-chain assets, making it difficult to short decentralized assets or engage in more intricate financial positions. In response to this challenge, Zerone introduces the Hybrid Perpetual Contract protocol, a decentralized solution allowing the exchange of one token for another using a market-determined token, such as BTC/ETH, to facilitate token option effects.
Zerones Approach and Utilization of Ox Protocol
Zerone leverages the Ox protocol to enable token exchanges at rates determined by protocol users. The Ox whitepaper extensively discusses various decentralized exchange mechanisms, including on-chain order books, automated market makers (AMMs), off-chain governance channels, and hybrid off-chain methods. Zerone adopts a hybrid approach based on Ox, believing it offers the most efficient market by enabling both market-making and token trade settlement on the blockchain.
Decentralization Challenges in Derivatives: Oracle-Based Approaches
Previous attempts to decentralize derivatives, such as Velocitys Oracle-based approach, faced significant challenges. Velocity proposed using oracles to provide asset pair exchange rates, allowing smart contracts to handle option contract operations. However, this approach presented drawbacks, including limitations on frequency, latency, and cost of price updates. Additionally, reliance on oracles introduced centralization, with a few parties having control over prices and the potential for economic incentives to manipulate prices.
Zerones Innovative Solution
In contrast, the Zerone protocol eliminates the need for an Oracle-based approach, allowing traders to execute financial product trades at any mutually agreed-upon price. The protocol operates without requiring the contract to have real-time knowledge of market prices. Instead, traders submit their selected orders, which are used to execute trades. The market then chooses the best-priced orders aligned with the economic interests of traders, ensuring transparency and efficiency without compromising decentralization.
Market Efficiency and Trader Empowerment
Zerones approach ensures a market that is both efficient and fair. By allowing traders to provide their selected orders, the protocol empowers users to actively participate in determining the best prices for trades. This decentralized and market-driven approach mitigates the risks associated with centralized control over prices, fostering a more equitable and transparent trading environment.
Zerones Hybrid Perpetual Contract protocol represents a significant step forward in decentralized finance, addressing the challenges faced by existing protocols supporting derivative or on-chain token contract trading. By combining the strengths of decentralized exchanges with the innovative use of the Ox protocol, Zerone provides a solution that empowers traders, enhances market efficiency, and eliminates the need for centralized control over prices. As the DeFi space continues to evolve, Zerones protocol stands out as a beacon of innovation and decentralization in the world of financial technology.
Zerone Official Social Media Links!
English Twitter: @ZeroneDexChinese Twitter: @ZeroneDex_cnOfficial Telegram: @ZeroneDexDiscord: discord.gg/EKJjy2djDG
Visit our website: zeronedex.com
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Revolutionizing Decentralized Finance: Zerone's Hybrid Perpetual Contract Protocol - Medium