0confirmation Public Mainnet Launch

Published in

0confirmation

6 min readDec 17, 2020

Today 0confirmation is making our initial app, 0cf Swap, open for public use.

tl;dr: 0cf swap allows you to swap BTC in its native form on any exchange or hardware wallet, to DAI on ethereum trustlessly using uniswap in under 2 minutes.

0cf swap has not been audited and is still new and risky software, do not use more than you could afford to lose. We have put limits in place to reduce risk, but it cannot be eliminated. We are currently engaging with auditors to review the protocol and app.

access it here: https://mainnet.0confirmation.com/trade/swap

What is it?

0cf is the first application built using the 0cf protocol. It allows users to trade BTC on uniswap and complete the trade while the bitcoin transaction is still in the mempool. This is accomplished through a short term loan (the duration of 6 confirmations) and the advent of the borrow proxy wallet which is a dynamic escrow that holds any assets acquired as a result of the proposed transaction. If the bitcoin transaction doesn't reach 6 confirmations the assets can be liquidated and the funds returned to the liquidity pool.

Built with renVM

0cf Swap is the first app to be built with tight coupling to renVM. All of the hard work of shifting the BTC from bitcoin to ethereum was taken care of by the renprotocol team. There a multiple points at which 0cf Swap communicates with renVM to complete the swap. You can read more about Ren here https://renproject.io/.

A proof of concept

The goal of 0cf Swap is to show what the 0cf protocol is capable of. We are open to talking to any applications or protocols that are interested in bringing this improved experience to their users.

A system for risk transfer

We believe that as DeFi continues its inevitable march across use cases, applications, and protocols towards consuming the entire global financial system, composability will be key. It is already proving out with the success of primitives like uniswap and compound. 0cf is a risk transfer protocol, isolating global confirmation risk to one location is much more efficient than individual apps or protocols addressing it themselves

How it works

A user creates a uniswap transaction to sell renBTC for DAI
They sign a message that contains the liquidity request for the amount of renBTC to trade and a uniswap transaction
They are prompted with a BTC address (generated via renVM) to deposit to
When the keeper sees the BTC transaction they post a security bond, Source the renBTC liquidity from the 0cf liquidity pool, Execute the swap, then send the DAI to a dynamic escrow (borrow proxy)
Once the BTC transaction clears the funds are automatically forwarded to the users address

Fees

The both the keeper and the liquidity pool depositors are taking a risk that between the uniswap transaction being executed and the BTC transaction timeout interval (10,000 blocks on ethereum) the price of the asset acquired has dropped dramatically compared to BTC and it is unable to be liquidated for the full value. For taking on this risk they are rewarded with fees. These fees will be controlled by the DAO going forward.

Keeper: 0.1%
Liquidity Pool: 0.1%
0cf Labs DAO: 0%

Earn

Contributors to the Liquidity Pool earn yield from the short term loans enabling the 0 confirmation swaps. Because the loans are only ~1 hour in length this pool can be very capital efficient depending on the distribution of volume over time.

Restrictions

This is a new protocol. It has not been audited. We have run numerous tests and feel confident that it should function as designed but as with anything new there are potential risks. To mitigate these risks we are starting with some restrictions in place. These will be adjusted over time.

Maximum trade size: .1 BTC (To limit Risk)
Minimum trade size: .026 BTC (To help make sure gas doesnt eat too much of the trade size)
Asset Whitelist (Just DAI to start)
Keeper whitelist (All keepers run by 0cf Labs to start)
Liquidity Pool deposit Whitelist (Reach out to us directly if you would like to deposit)

Gas as a Service

0confirmation started with a conversation in a Ren telegram chat. Shifting BTC onto ethereum is great but the experience of waiting for an hour to do so when compared with the relative speed of DeFi was a stark contrast. We approached it wide eyed and tried to cover every angle including allowing a BTC holder with no ETH to use the app as well. To accomplish this, we built into the protocol gas as a service. To perform the swap no gas money is needed. The protocol estimates the gas needed and takes it out of the renBTC shifted.

Who built it

0cf was built by JKR Labs, a Wyoming LLC, consisting of 3 DeFi enthusiasts and renprotocol community members. The control of the app and the protocol will slowly be transitioning ownership to 0cf Labs DAO.

Whats Next?

Integrations!

We are looking for DeFi applications and protocols that would like to bring this improved experience to their users. As a value added service there will be a fee that accrues to the protocol and we will be looking to use this to incentivize integrators as well. We think this can be a valuable revenue stream to wallets, decentralized exchanges, and other DeFi Apps.

Decentralization!

We can’t scale alone. We have recently launched 0cf Labs DAO and the doors are open. We are mainly looking for developers who would like to get some familiarity with the protocol and contribute to new features and applications. Please reach out if you are interested in joining.

A larger vision

In building this app we got firsthand experience with the struggles of working with cross chain applications and protocols. We working on plans for 0cf to be a starting point for a collective effort to build out more robust toolsets for cross chain interactions and use them to create novel and productive infrastructure. We see great potential in what we ave built beyond just swaps and want to work with people excited to explore the opportunities. Anyone passionate about this with the skills to contribute, please reach out.

Join the DAO!

There are 3 immediate areas where we have development needs. We can offer direct payment + a stake in the DAO for anyone willing to take on these tasks.

Sushiswap Module — We currently have 1 module (uniswap). Fork this and make it work with sushiswap
BSC Integration — BSC is the only other target chain for renVM and EVM compatible. Create an integration to open up 0cf to apps on Binance Smart Chain
Integrator reward mechanism — While it is important for 0cf to retain some liquidity, fees are assessed based on liquidity. To incentivize liquidity we would like to structure the protocol to reward integrators of the 0cf SDK and send it volume.

Other Roles

Reach out, work with us a bit and, if its a good fit, join the DAO

Grant writer (Lots of opportunities for grants for cross-chain work)
Designer (under-appreciated importance in DeFi)