Smart contract risk: smart contract vulnerabilities may be exploited, and synthetic assets are the key targets
Governance risk: most of the platforms are managed by centralized participants and have not been verified on a large scale
Oracle risk: many synthetic assets rely on Oracle to operate normally, which brings their own trust dependence and failure mode
Platform risk: Ethereum and other underlying blockchains will encounter the problem of carrying capacity. The more efficiency is needed, the busier the network may be, and the worse the situation will be. The cost market is inefficient, and preemptive trading or griefing attack will become a problem
Some views coincide with those held by the author. We believe that the most fatal for synthetic assets are contracts, prophecies and platform risks.
The function of Oracle is to obtain off-site data, verify the data signature, calculate and broadcast to each block. If a single point of failure occurs in any link, the upstream price source anomaly will sweep through millions of value contracts like domino effect, causing irreversible economic losses. Synthetix had abnormal feed price source information. The Oracle released the wrong price to the chain, and the Trading Robot arbitraged quickly after discovering it.
Another problem is that the current synthetic assets are basically mortgaged. The underlying logic of these mortgages is to use their token value to link various types of synthetic assets. But! If the project token lacks value support and the community belief collapses, the buildings will inevitably collapse. Because they do not have any physical collateral to support the project, investors will not generate electricity for love.
- Btcst – solvency mortgage
We are more optimistic about the recent btcst project, because it uses the numeracy token as the collateral synthetic asset. Compared with the mode of pure token mortgage to produce another synthetic token, here the value of real mining is given to the synthetic asset.
“Pledging the corresponding POW hash value and giving up the pow mining reward represents consuming a certain hash value to cast synthetic assets (binance research, 2021)”
12% of the global hash computing power takes bitcoin mining as the underlying asset pledge, which means that 12% of the computing power has given up the reward of bitcoin mining and chose to forge computing power coins and issue them to the market. Therefore, the currency price of btcst has been guaranteed, and there will be no problem that the currency price lacks value support and finally panic selling.
three τ Sage
V2 τ Sage, stp-7 NFT Oracle authoritative certification proposal, is expected to launch DAPP V2 in May τ Sage, at present, the community has passed by all votes.
The latest proposal is to address the issue of the true source of NFT authorization records. For NFT holders, they must and have no choice to believe that the terminal with all management rights in these contract data will responsibly save these NFTs and will not easily tamper with these records. So the btcst community proposed a τ Sage’s proposal, which is based on the authority authentication mechanism of NFT Oracle based on Hash computing power as the foundation of NFT underlying infrastructure, solves this problem.
The specific working principle is as follows:
In order to gain access, the contract of NFT Mint needs to be approved τ Sage obtains data verification and needs to pledge a certain number of btcsts to ensure the stability of the data.
NFT Mint’s contract will pass all the information created by authoritative certification to τ Sage network. τ Sage will perform authoritative verification and periodic summary of these records to reduce them to appropriate text. and τ Sage, as a decentralized network, must be composed of miners with sufficient mining power, who are used to judge these saved texts.
τ Sage will regularly insert the authoritative records as the text of bitcoin and other public ledgers with resistance risks. The original records will also be τ Sage contracts are kept for verification.
NFT holders can use τ Sage can immediately verify the complete authorization chain of its token, and identify its NFT authorization record, where and how to store it. Of course, in this mechanism, it can also query the block ID of bitcoin and other public ledgers with risk resistance.
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