At ETHDenver 4405 meal purchases have been done with BuffiDAI (a DAI equivalent, identical in value to 1 USD) and burner wallet in only 3 days. The community is claiming a success in scalability and adoption of Ethereum:
BuffiDai proved that POA might be a viable scalability solution for Ethereum, but it’s not the only one. LeapDAO and Blockada have partnered up to demonstrate that Plasma is ready to be used the same way. At BlockSplit and DaoCon Zero, participants will be using Plasma chain called Sundai.
At the EthCC 2019 talk “Fixing Ethereum’s Fragmented User Experience” Taylor Monahan lists 45 steps a new user needs to take to be able to use a decentralized application. Onboarding new users is an unsolved problem in the crypto-currency space.
Austin Griffith’s Burner Wallet offers a simple throw-away wallet that can be initiated from a QR code. While the security and portability is limited, the wallet clearly communicates to the user that it is not intended for long-term use, but rather funds should be swiped (sent in full while discarding the origin wallet) to a more secure wallet at the end of the day.
At ETHDenver, visitors have been given a QR code which, once scanned, opened the burner wallet in the users’ browser and initialized the wallet with BuffiDAI funds. In this example the installation of the wallet and the access to liquidity have been compressed into one step.
Dai stable Coin
The Dai is a stable coin pegged to the value of USD created by the Maker organization. Because it is backed by Ether and locked in smart contracts called Collateralized Debt Positions (CDP), it can not be shut down like other centralized stable coins, of which Tether is the most prominent example.
Using a stable coin has many obvious advantages in transactions. Users have less mental cost in doing purchases as they don’t need to go through an additional step of value conversion, like they would need to when doing purchases in BTC or ETH. Furthermore, businesses that operate on a thin margin have no risk at realizing a loss, once the volatility of the currency has been absorbed.
Plasma vs Sidechains
ETHDenver’s burner wallet implementation used sidechain technology. With sidechains, a custodial account holds a mirror image of the funds present on both the Ethereum main chain and the sidechain. This allows cheap and fast operations on the side chain, and an “exit” to the main chain when desired by simply withdrawing from the custody contract.
At ETHDenver, attendees and merchants transacted with BuffiDAI on the implemented POA sidechain, allowing merchants to verify purchases with just a glance at a colorful icon on the buyer’s screen. Transactions went through at VISA speeds – confirmed in 2-5 seconds. Merchants then “cashed out” after the event by sending BuffiDAI to the custodial contract which released DAI to them on the Ethereum mainnet, allowing them to trade it for fiat if they so choose.
An alternative technology is Plasma – similar to side chains, plasma chains are constantly connected to the main chain and feature time delays on exits. This means that the implied trust in a typical sidechain setup like xDAI at ETHDenver – wherein 3 of 4 validators (in the specific case of xDAI) of that sidechain need to collude to cause damage – disappears.
In Plasma, the latest valid state is always saved (checkpointed) on the Ethereum main chain, and so even if things go very wrong on the Plasma chain itself, users can still escape the coming storm as long as they submit their desire to exit the system in time. The key differences between sidechains and plasma chains are:
- Sidechains rely on validators, and require you to trust that the majority are honest
- Plasma chains are trustless and safely checkpointed on the main chain, but are slower to govern and exit / enter – it takes days to get governance proposals approved.
As a demonstration proving Plasma’s viability in the real world, South Europe’s biggest annual blockchain conference Blocksplit.org will be utilizing SunDAI.
SunDAI, the conference’s BuffiDAI equivalent, will be pegged to DAI and will be used in the same way it was used at ETHDenver – purchasing food and other items from partners and sponsors.
Users will be given a private key in the form of a QR code at registration which, when loaded into any browser, will provide them with the ability to access a Plasma-connected burner wallet for feeless, instant, near-free transactions, all under the secure umbrella of the Leap Network, LeapDAO’s Plasma chain.
The goal of the experiment is to prove that Plasma is a mainstream-ready and mature technology, capable of powering real-world events and use cases at a large scale.
SunDAI – using Plasma in real commerce
The xDAI sidechain used at ETHDenver to facilitate BuffiDai trades has demonstrated how fast and cheap transactions are an essential building block of cryptocurrency adoption, but we should not corrupt ourselves confusing it for the solution. As stated earlier, the xDAI chain is a proof of authority setup between (currently) 4 validators. Only 3 of 4 validators need to be bribed or otherwise corrupted to steal any funds that are locked into the sidechains bridge on the mainnet.
This architecture cannot stand in the centre of a showcase of decentralization. Its centralized nature would turn the showcase into irony, a proof that we can not achieve scalability without compromising on security.
Luckily, we don’t have to rely on it. In recent months, multiple Plasma chains have launched on the Ethereum mainnet. The Plasma design, while relying on a single operator, limits the operator’s authority and provides scalability and security without taking custody of funds. Given that a plasma chain is non-custodial, users can “exit” their funds from it back to the main chain at any point in time, without trusting any majority or depending on validators to approve their actions.
Plasma, rather than being a single project or company is actually a framework for building scalable applications. In many ways it is like taking the bus instead of packing the highway with individual cars. Hence, it contributes to the ecosystem as a scalability technology.
LeapDAO is an open source organization that has committed itself to deliver scalability as a global public utility. The Leap Network launched by LeapDAO on the Ethereum mainnet in February is currently able to deliver about 500 TPS.
Instead of optimizing along a single metric, the community is striving to enable distributed applications to take the “leap on Plasma” and run faster and at lower cost. This will enable a wide array of new applications in the Ethereum ecosystem that were previously hindered by block timing or transaction cost. Read more about LeapDAO’s roadmap in this post ( https://leapdao.org/blog/Plasma-Roadmap/ ).
In public utility networks, the users of the network form a group of stakeholders. They are collectively responsible to govern it and sustain the utility and put it to best use. Plasma users monitor the chain and if they are not happy with its state (censorship or invalid state) they can exit their funds to the mainnet securely at any time. The Leap community copies from this design and introduces Minimal Viable Governance ( https://leapdao.org/blog/Minimal-Viable-Governance/ ), an analogous approach where governance proposals are held for 2 weeks before they are applied to the chain. During this time users have enough time to anticipate the effects of the governance change and exit their funds if they don’t agree.
At BlockSplit Conference, Leap Network will provide the transaction highway for merchant operations. The Leap Network will contain a mirror image of the Ethereum mainnet smart contracts required to execute transactions at the conference venue, and users will be given QR codes with burner wallet keys. The twist – instead of the xDAI network, this instance of the burner wallet will be auto-connecting to the Leap Network.
After the conference, any SunDAI remaining in attendees’ wallets (beyond the amount given by the conference organizers at check-in) along with any rewards claimed during the hack games at the event will be withdrawable to users’ mainnet wallets. This will make sure everyone can cash out any remaining topped up funds and safely discard the burner wallet.
Should an attendee run out of funds at the conference, several partners will be on-location ready to sell top-ups for fiat. Likewise, fast-exits will be facilitated by conference partners ready to buy out any remaining SunDAI on the spot, saving the end-user from having to wait out the plasma exit period currently defaulting to 7 days.
If you are curious to know more about the project, read more about us on the website and follow us on twitter. We would love 💛 to see more of you getting involved in LeapDAO. We are looking for like-minded people. To get started, join our Slack community.
If you’d like to know more about the conference itself or grab one of the few remaining tickets, see https://blocksplit.org and https://daocon.io. We hope to see you there to discuss all things plasma and mainstream Ethereum!