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DREP Research Institute: “Does Libra have 2.0 — Viewpoints on the future of public chain”

Recently the Libra Association has officially made some big updates to their project, almost obliterating the original framework. In this article, the DREP Research Institute will make an in-depth analysis of the difference between Libra 1.0 and 2.0

First things first, let us view the key points in the original white paper:

Right at the beginning(Page 4), the Association declares that the public chain will be open to everyone. It practically defines Libra as similar to Bitcoin or Ethereum.

“Anyone who meets the technical requirements can run a validator node.”

All blockchain projects can be categorized as “permissioned” or “permissionless”. The latter is commonly known as a public chain. Validator nodes can come and go as they please, without any interference or limitations. As we see, Libra 1.0 retained a high level of liberal values.

Apart from that, Libra has its own reserve based on a basket of prominent fiat currencies, most importantly the USD. But let us look at the details:

“Libra is not a peg to a single currency.”

The above sentence, placed in a prominent position in the whitepaper, acts as a form of assertion that Libra will not be “just another USDT”. It is not a digital form of national currency.

Probably not a surprise to anyone, the white paper immediately triggered responses from the SEC and House of Representatives. On the afternoon of June 18th, the same day of the official release, Chairwoman of the Financial Services Committee Maxine Waters publicly requested Facebook officials to come to Congress for hearing. In July, Head of Libra David Marcus attended the “trial” and was questioned by dozens of Congressmen. In October, Paypal and Visa pulled out of the Association, and even Mark Zuckerberg had to go to Congress himself.

However, numerous efforts by Facebook seemed doomed. During 2019 there was for the most part, bad news on Libra’s side. It was forced to promise that “it would go no further until official greenlighted by the U.S. regulatory agencies”. The original 2020 mainnet release is probably as good as dead. This April, Libra finally compromises and publishes the 2.0 White Paper. According our analysis, this version is drastically different from the previous one.

On the topic of mining nodes, 2.0 does not hesitate to overturn what it said before.

“Forgoing the future transition to a permissionless system while maintaining its key economic properties.”

What does it say? Libra will cease to be a public chain as we know, but all the validators will be vetted and censored. In addition, 2.0 adds a whole new chapter: Prevention of Crimes.

Libra will become a three tier structure. On the top level is the Libra Association. The second level will be vetted asset service providers, including wallets and exchanges. They will undergo period reassessments to make sure they obey regulations. On the bottom are common users. Their deposits and transfers will be capped at a certain amount without KYC verification.

Facebook has, at least in part, bowed to the demands of the American government. The whole system will likely be regulated by some form of American jurisdictions.

And yet another, perhaps more significant change is the transition to stablecoins.

“LBR will not be a separate digital asset from the single currency stablecoins.”

“LBR will simply be a digital composite of some of the single currency stablecoins.”

Various news reports have focused on the above change, declaring Libra 2.0 is, in its essence, a USD stablecoin. According to many, this move is the only reasonable decision considering intense pressure from the American government. It was actually anticipated that Libra would forgo its Utopian plan, and come back to its “senses”.

However, the future of public chain is not, and will not be doomed. The DREP Team is dedicated to building the next generation blockchain technology. DREP utilizes dual consensus mechanism of PBFT and DPOS, Schnorr Signature, making it lighter, easier than competitors. In test, the maximum TPS reaches 12000. In addition, DREP SDK makes game integration on blockchain frictionless, expanding the use cases of tokens. DREP is also compatible with EVM and WASM smart contracts. If you are interested in exploring future business opportunities in the blockchain industry, please join our community and keep updated with our latest news.

DREP Official Website: www.drep.org

DREP Telegram: t.me/drep_foundation

DREP Twitter: https://twitter.com/FoundationDrep

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DREP Foundation

DREP Foundation

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DREP 2.0 is the decentralized credit-data middleware based on layer-2 facilities, to be the backbone of DeFi Credit Era.