COVAL UPDATE 0717
Since our last update, we have focused primarily on the COVAL Platform, a new Protocol and an associated app. This update will give a high-level overview of this work.
The COVAL Platform is being developed with a primary purpose of moving value using “off-chain” methods. In other words, native crypto assets and tokens from other public and private blockchains (including ₡OVAL itself) enter the COVAL Network of distributed ledgers (COVAL Sidechains) where they can be flexibly and securely transacted using federated and p2p models. Transactions consist of both individual tokens and wallets (containers of tokens) represented by native sidechain ledger assets called Emblems.
emblem is defined as… Something which represents a larger whole. It is also synonymous with “token”.
This off-chain network is intended for apps and services built on the COVAL Platform and is considered to be a permissioned blockchain network. Though the platform is capable of reaching out and into other networks to bring interoperability features to users, the primary use is for transacting among nodes and users within the COVAL Network and adhering to the LAW Protocol.
LAW Protocol (Ledger Assigned Wallet)
The COVAL Platform implements the LAW Protocol which has been created by the COVAL team in conjunction with designing the COVAL platform. The LAW protocol describes off-chain wallet assignment transactions where a distributed ledger network (COVAL Sidechains) is used to log the assignment of wallets to users and the status of those wallets as Owned or Unowned. This simple concept is the basis for a secure and trusted wallet transport system and is at the core of the COVAL platform. The full LAW Protocol spec will be published soon at lawprotocol.org and linked to from coval.cc.
The COVAL Platform and LAW Protocol involves the following general components:
- Distributed Ledger Network (COVAL Sidechains)
- Secure COVAL API Endpoints and P2P secret sharing (DAT Protocol)
- HD Wallet Creation Service
- Multi-Factor Authentication/Authorization (MFA)
- User devices running COVAL apps (mobile, desktop, web)
The COVAL Platform uses a network of blockchain ledgers. We refer to these ledgers as Sidechains since the COVAL Platform base cryptocurrency is on the Bitcoin Blockchain (Counterparty Platform) but leverages purposeful ledgers that enable core platform functionality and service integrations.
All COVAL Sidechains interoperate with each other and can also interface with other public and private blockchain networks using various methods including a continuation of the work described here.
To understand the purpose of each COVAL Sidechain, it helps to view them in their domain name format with descriptions.
The LAW Sidechain
The LAW Sidechain is a core platform sidechain as opposed to other more ancillary COVAL sidechains (i.e. ZERO, PACK, PRISM etc). This distributed ledger’s transactions represent the state of wallets and users. A Key/Value data store embedded in the ledger is also used as an immutable activity log in addition to blockchain asset transactions that represent the transportable wallets (encrypted private key parts).
The COVAL Platform enables value transfer by facilitating the assignment of wallets to users. The wallet’s contents are effectively sent to another user who would also inherit the capability to send the wallet to yet another user and so on and so forth. MFA is leveraged in this user-to-user system and no single entity or user has full control and access to the funds in these sendable wallets. The intended benefits of the COVAL Platform are:
- Fast transactions
- No native blockchain miner fees
- Privacy via encrypted off-chain p2p transactions
- Transfer multiple types and amounts of assets and tokens in a single transaction
- Uses trustless models
- Enables COVAL products and services to function efficiently
LAW uses a concept of Owned and Unowned Wallets as well as users that are either the Owner or Holder of wallets. The LAW Sidechain ledger handles the assignment of wallets to users. An Unowned Wallet can be “held” by a user. Wallet Holders are able to:
- Request Ownership of Wallet
- Send Wallet to other users
- Receive tokens to addresses in the wallet
A Wallet Holder does not have direct access to the wallet/private key while the wallet status is Unowned but they control the ability to own the wallet by making a request to the LAW Sidechain ledger API which confirms if that user is the current Wallet Holder or not. Only the current validated Wallet Holder is able to make this wallet ownership request. Once the request is validated and approved via the ledger’s consensus algorithm, the user becomes the Wallet Owner and now solely controls the private key and ability to unlock the wallet and move any tokens inside it. Once an owner of a wallet, that wallet can no longer be sent to anyone else as it is effectively a private personal wallet at this point. Wallet Owners are able to:
- Send tokens that are in the wallet to other wallet addresses
- Receive tokens to addresses in the wallet (same as wallet holders)
Wallets as Blockchain Assets
A wallet represented as a blockchain asset makes it easy to send and receive wallets just like any asset or token. In the COVAL Platform’s implementation of the LAW Protocol, blockchain assets would represent unowned wallets. In our app, we call these assets Emblems. An Emblem is a type of asset which represents a wallet containing various other assets (tokens) such as bitcoin, ₡OVAL, ether and any tokens created on top of Bitcoin (i.e. XCP Assets) and Ethereum (ERC20 standard tokens). Other blockchain cryptocurrencies can be supported as well.
Only Unowned Wallets are represented by Emblems. Once a wallet is owned, the Emblem asset is destroyed (sent to a burn address). Emblem assets are not going to be listed on any centralized exchanges. They are only meant for p2p transactions and markets.
Though many details about how our platform works is left out of this blog post (such as how wallets are co-generated in a trustless manner and dependent on the ledger), we will be publishing a new section on our website with documentation for developers and users of our apps that will go more in depth when these materials are properly peer reviewed and completed.
Again, we are still working on all of this so the final design is not quite finished but this high level view of our model should provide a glimpse into our thinking on how COVAL will exist as a platform for movable value and give utility to the pre-existing ₡OVAL cryptocurrency.
A blockchain network protocol and the platform that implements it succeeds in part by having a token incentive model in place. This is normally referred to as a network token. COVAL’s network token is the same as the core cryptocurrency (₡OVAL) that we apply to all of our projects and services as well as partner integrations. No new token will be introduced.
₡OVAL is already available on Bittrex so there is no ICO stuff to worry about. We consider COVAL to be an Open Market Reverse ICO.
Brief Statement on Monetary and Fiscal Policy
Fees in ₡OVAL would apply to every wallet assignment transaction (LAW related) and other types of transactions related to cross-chain interoperability features of the COVAL Platform (using our APIs or within apps). These fees would partially be used to reward eventual transaction validators (sidechain nodes). COVAL reserves the right to take a portion of fees that flow through services that we choose to run on the platform. The fees would either be kept or destroyed/burned. More details on fee structures will be made available in the future. We will provide “free credits” during early roll-out and also in an on-going manner to help on-board new users and developers. Special tokens may also be used to bypass fees.
₡OVAL is a locked asset with a 1.2B total supply. No new tokens can be minted. We’ve talked in the past about efforts to lower the total supply by burning tokens (mainly via fees). This still applies yet we are not prepared to offer any deeper details and specifics on this at this time. As the COVAL Platform nears a launch, this issue will be a higher priority and we will announce more solid plans at that point… such as how long and how much of any fees would be destroyed or how other programs under consideration would work.
The Emblem App
We are working on a new app tentatively called Emblem that will be an implementation of the COVAL Platform and LAW Protocol. The goal is to take the normal wallet features that users would expect to have in an app and build layers on top that provide unique features powered by COVAL. Shapeshift is a planned integration which would give users a lot of flexibility for adding various digital assets to a user’s personal wallet in the app which can then be used to add a mix of tokens to sendable Emblem wallets.
We are currently prototyping this app in parallel with the completion of the COVAL Platform and LAW Protocol and are working with designers now to make sure it has a high quality UX and brand. The app will have its own brand and website.
The desktop version of the app will be a fork of Beaker Browser and have additional features and double as a fully functional Chrome web browser with native support for the p2p DAT protocol (which we are using in our platform as well).
Our next update will have more details and we’ll publish screenshots from our designers.
The CORD Program will be going through some modeling changes and will be relaunched. Any CORD partner efforts on our end are on hold until this process is complete. We think that CORD has potential to be an important part of COVAL but requires careful thought and dedicated resources to setup and manage properly to minimize risks and maximize benefits. Our focus is on building the COVAL Platform which CORD would be a part of so this decision is in the best interest of the overall COVAL Project at this time. The fund will be considered locked until further notice.
Any other project news will be included in the next update in August. There is more going on than what we are able to cover in this single blog post, especially related to our “labs” token projects (ZERO, PRISM, PACK). These all require the platform to be ready to properly implement them in the way that we want. So parallel development is ongoing.
A Note on the SEC’s Statement on the DAO and ICOs
You might have heard about the recent SEC report on the DAO concluding that DAO tokens were securities and the agency’s general warning to the public regarding ICOs. We think this is an important step towards more clarity and it’s been a long time coming. Though COVAL is not an ICO project, we are mindful of legalities and any overlap with crypto token models and economies. We will continue to monitor and understand the cryptocurrency and token industry and seek expert advice to make sure that COVAL follows regulations and considers any and all guidance that is made available.