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Controllable Privacy Financial Infrastructure on Layer 2

Part III of Tusima series

TL; DR

Tusima is committed to building a decentralized privacy financial ecology that is secure, interoperable across chains, and has auditable privacy protection. The aim is to solve the problems of privacy, cross-chain, and security in the Web 3.0 industry.

Blockchain has made much progress in recent two years, as its technology and DeFi pick up. Meanwhile, the industry advances with intensified shackles, as transparent data triggers successive asset thefts and privacy concerns for sensitive data. The Tusima network keeps every asset in the financial system private and supports auditing. A validator node network distributes trust and performs privacy protection. Imagine that funds prove that they only conduct privacy investment transactions within the authorized scope, investors make transactions and summit qualifications anonymously, and regulators audit sensitive user data without accessing the original data. All of these go on with privacy protected and interoperability sustained.

Tusima is the new generation of privacy financial network that integrates zero-knowledge (zk) proof and homomorphic encryption through the Fisher-Yates Shuffle algorithm. The platform works to build a decentralized privacy financial ecosystem with guaranteed security, cross-chain interoperability, and auditable privacy protection.

On Tusima, privacy is achieved through the account model and zk proof. Its tens of thousands of TPS (Transactions Per Second) is realized through zk-rollups, POS consensus mechanisms, and cross-chain interoperability protocols. Its indispensable indicators, such as TPS, make high speed and high frequency come true for decentralized financial applications.

Pressing Woes of Centralized Finance

How to work out fair and optimized incentives and distribute them underscores one core attribute of finance. Traditional financial institutions are plagued by serious headaches such as high cost, low efficiency, unbalanced service, low rate of return, isolated ecology, and under-the-table deals.

  • Intercepted information exchange incurs rampant risks.
  • High cost, low efficiency.
  • The financial service system lacks equality.
  • Personal privacy data risks serious leakage.

As Internet finance gains momentum, users come across increasing privacy leakages as they access a wide range of financial services. Banks or other financial institutions collect users’ personal information that goes beyond what is required by the services themselves, such as contacts, calls, photos, and other sensitive personal data on user phones.

Pros of DeFi

DeFi is short for Decentralized Finance. The past two years have witnessed the total value locked in the DeFi industry surging from US $588 million to US $79.8 billion. DeFi achieves far beyond the traditional finance industry.

  • Low remittance fees, high efficiency.
  • Ensures transparent, secured, fair, and untampered transactions with smart contracts.
  • Makes financial services equally accessible to billions of people worldwide who have no bank accounts.
  • Spurs innovation with technology ensures security with code and lowers the threshold of the payment sector.

Challenges Faced by DeFi

  • IP address and transaction amount are not separated during transactions.
  • Cross-chain information sharing lacks security and efficiency and communication privacy is generally not protected due to tough cross-chain communication barriers.
  • ETH, the main carrier of DeFi, suffers severe congestion, and gas price skyrockets as DeFi booms.
  • Assets of the treasury or projects are prone to be stolen under centralized management.

The Advent of the Financial Age

A financial system in a society underlines its overall production level. Financial advances are supposed to serve society, coordinating demand and supply imbalances. Financial innovations drive economic and technological growth to a great extent. All unleashes the ultimate value of the financial sector, with an intention to create a promising life for its citizens with its services.

As we all know, traditional finance shields user privacy from the public, at the cost of zero transparency, but not from financial institutions. Absolute transparency can only be achieved at the expense of privacy. Most financial services underscore privacy. Absolute transparency allows audit but confines large-scale deployment of financial applications on most blockchain platforms.

Anonymous projects or privacy payment projects guarantee the anonymity of token transfer with encryption technology but are limited only to the confidentiality of the transfer. These systems only prove the validity of the simple transfer of native cryptocurrency, incapable of complex logical operations. Inability to be programmed or audited deprives anonymous blockchains of sophisticated logic required for the deployment of financial applications.

At the moment, the top priority for decentralized finance is how to balance user privacy and the network value of data. Technologies, such as zk proof and homomorphic encryption, and iterative proof predict trending cutting-edge research fronts of the existing cryptography field. These technologies validate the identity of legitimate owners for certain rights or interests or convince validators that some assertion is right, with the absence of useful information provided to validators, rid of any potential leakage. Tusima is striving to set up an L2-controllable privacy financial infrastructure that walks the industry out of the existing Web 3.0 world.

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