Use cases of ET Protocol
Let’s dive into more details on how the ET Protocol will function, including the most complex and customized use cases, as well as their possible simplifications and optimizations.
As you might have read in the latest development blog, Eternal Trusts aims to become the first trustee protocol for hybrid intelligence-based autonomous execution of long-term fiduciary purposes. The protocol will provide all necessary infrastructure to enable fiduciary companies, multi family offices, trustees, and experts from different fields to join the ecosystem and solve long-term fiduciary objectives of people, such as financially supporting their dynasties or charities in the long-term.
Unlike classical trusts, the trustee in Eternal Trusts is represented by a system of smart contracts and a network of oracles — a group of individuals acting anonymously in the interests of the whole platform’s and their own reputation. Decentralized trusts of ET are capable of storing clients’ assets at smart contract addresses, not only in cryptocurrency or token form, but also in the form of tokenized traditional assets and funds. ET-Protocol will provide layers of integrations for asset management companies to enable exchange between various tokenized assets, such as national currencies, raw materials and precious metals, portfolios, stocks, and indices.
Main potential ways of integrating the protocol are described on the schemes below. Here’s what abbreviations mean:
CLT — Client;
dAPP — Multi Family Office Application;
PR — Service Provider;
DNET — Network of DAO Directors;
NNET — Private Blockchain Nodes;
ONET — Network of Oracles;
PT — Trust Protector;
O — Main Oracle;
D — Sole DAO Director;
EOS-ETT — Smart Contract System “ET-Protocol” in the EOS network.
The widespread adoption of ET Protocol will result in a large fiduciary ecosystem with multiple actors competing for the right to manage the clients’ assets and achieve their long-term objectives.
The most customized scenario is presented below, where all the details of the system’s function, including the participants and the technical infrastructure, are predetermined, customized and set up by the DAO directors. In this case, a business owner, trustee, or a family office creates a decentralized autonomous organization with its own network of DAO directors and sets up the initial set of DAO rules.
After the initial steps, the DAO directors should select all participants of the protocol and assign their roles. They need to form their own network of oracles (experts, arbiters, and assistants), set up servers to store and process private data and start attracting clients that need to fulfill their fiduciary objectives.
In this case, a service provider has to purchase tokens to create and initiate smart contracts and distribute the required token amount to the participants. There is no need for the client to buy tokens because the assets are automatically converted after their transfer onto the smart contract of the ET-dApp. Some participants of the system must hold tokens to continue participating in the process further.
Besides the custom use case with all participants determined and all infrastructure set up by the ET-dApp DAO directors, the ET-Protocol provides several ways to optimize the structure and hierarchy of the fiduciary system, depending on its end goal and available resources. One of the ways to make the whole process less complicated is renting private node networks instead of setting them up from scratch.
In essence, the creators of an ET-dApp would not need to deploy their own private node Hyperledger-based network with limited access to data/keys and to private information channels between the participants. Instead, they can use ETT Tokens to rent already existing networks that passed security audits.
We think that creating and renting public NNETs for ET-dApps can become a very lucrative business model for providers of computational resources with a good reputation and track record.
It is not necessary for the creators of ET-dApps to gather their own networks of oracle experts. They can employ already established expert networks that specialize in fields related to the client’s purpose.
For institutions, companies, and other groups of experts with a good track record, this is a familiar and attractive way to monetize their knowledge and expertise.
Similarly, it is not necessary for the creators of ET-dApps to establish their own networks of service providers.
Forming the network of service providers while earning an additional fee from customer’s assets is an appealing model for organizations working with exchanging cryptocurrency and fiat money, as well as any service providers ready to accept cryptocurrencies as a means of payment.
To sum up, when creating and configuring ET-dApps, the protocol can provide advanced customization, sometimes at the expense of decentralization, and a narrow specialization of the service being created.
For example, an ET-dApp creator can assign special roles to some participants of the oracle network, such as the role of a Protector (PT) who will have the authority to veto decisions and withdraw assets from the smart contract according to strictly defined rules, and will serve to protect the clients’s assets from unwarranted spending and to oversee the purpose execution flow.
Also, an ET-dApp creator will be able to specify another type of third parties — oracles-beneficiaries (O), in case of providing trustee services that require asset redistribution. In particular, the Trustee itself can simultaneously be a service provider (PR), the sole director of DAO (D) and the principal beneficiary oracle (O), as shown in the scheme below.
An example of such use case is that of a traditional trust fund but with the goal of reducing the human factor, providing standardization and automation of business processes. This also leads to the reduction in the service costs and the minimization of risks when working with cryptocurrencies, in comparison with the traditional scheme of handing over keys or cryptowallets from their owners to the trusted party.
This article continues the series that presents excerpts from our technical paper that is coming up for publication soon. This marks the beginning of our strategic pivot towards becoming the first trustee protocol for hybrid intelligence-based autonomous execution of long-term purposes. The open source protocol architecture is currently in the initial stages — there are many interesting architectural challenges that we will need to solve in order to build our project as a protocol, including some alterations to the tokenomics model essential for the whole system to work. We believe that this strategic step is very important for Eternal Trusts, because it expands the scope of the project and puts us on the same footing as other multipurpose blockchain-based infrastucture projects with a wide array of use cases. Follow our Medium to stay tuned!
