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White Paper in Five Minutes — Kirobo

White Paper in Five Minutes — Kirobo

Kirobo develops decentralized applications that broaden, consolidate, and develop the world’s DeFi infrastructure, with the aim of promoting cryptocurrency adoption and use. This white paper describes two of Kirobo’s services:

· The Undo Button retrievable transfer service; and

· The P2P Swap Button token swap service.


Blockchain technology is designed to be trustless.

Satoshi Nakamoto’s 2008 paper, “Bitcoin: A Peer-to-Peer Electronic Cash System”, proposed a system in which people transacted and interacted via digital assets backed by an immutable, pseudonymous, open-source record called a blockchain. The technology nullifies the need for third party oversight.

Thirteen years on, the cryptocurrency ecosystem has blossomed to a value of over USD 1.4 trillion, but there are serious problems holding the world back from full adoption.

The problem with blockchain

Human beings are not computers — they make mistakes. And blockchain technology relies on human input to function.

However, cryptocurrency transfers in their natural state are not user-friendly. The process involves specifying a destination address, which are long strings of alpha-numeric characters not easily recognizable to the eye. It’s too easy to copy the wrong address by mistake or as a result of fraud.

The result is that huge amounts of cryptocurrency are lost every year.

‘Lost’ in this context has two meanings: assets resting in wallets to which nobody has access, and assets sent to the wrong recipient, which could be another user or a smart contract that cannot release the assets. An additional factor contributing to the hoards of lost cryptocurrency — one which will only become more relevant as the years progress — is death. If a person passes away without revealing their secret key, the key to their funds dies with them.

Digital forensics company Chainalysis estimated in 2018 that there were 2.3–3.7 million lost bitcoins. Due to the nature of blockchain wallet ownership, it is not possible to know for sure if a wallet is inaccessible or simply not used. However, for example, it can be safely assumed that the 2.1 million bitcoins not touched since 2014 are inaccessible due to the existence of a strong economic incentive to use them.

Lost cryptocurrency is an issue because blockchain is by definition immutable, so erroneous transactions cannot be reversed. In addition, the pseudonymity of blockchain technology means that it is very difficult to identify malicious actors.

As a result, many cryptocurrency users refrain from doing anything with their digital assets aside from ‘hodling’, while others rely on solution providers that compromise on some element of decentralization.

Yet centralized solutions are missing the point of cryptocurrency entirely — the dream of a world in which people have complete control of their own money.

Decentralized finance

DeFi emerged as the answer to this issue.

The phrase refers to decentralized applications (dapps) that provide blockchain-based financial services that mimic the infrastructure of fiat finance, but without compromising on decentralization. They use smart contracts to enforce fairness without trust, providing services like storage, savings, investments, transfers, swaps, trust funds, inheritance services, and more.

For example, DeFi wallets such as MetaMask and Trezor give users complete control of (and responsibility for) their funds — a stark contrast to the companies that store users’ crypto assets and present a tempting target to hackers.

The market for DeFi applications is booming, with almost 13 million transactions passing through them on a daily basis. This shows that there is a real need for decentralized solutions that give crypto users the same experience they have with fiat finance, without requiring them to trust anyone else.

And as the ecosystem grows, we can expect this need to become ever more pressing.

Kirobo: creating a decentralized infrastructure

This white paper describes Kirobo’s solutions to two specific problems:

1. It is too easy to make a mistake when sending a cryptocurrency transaction, because wallet addresses are long strings of alpha-numeric characters that are not easily recognizable to the eye. Thus, copying an incorrect address is a common mistake, and if an address is replaced by a scammer, it is easy to miss. Furthermore, when a mistake is made, there is little to no recourse. On the Bitcoin blockchain, for example, it’s estimated that one fifth of all bitcoins are ‘lost’; that is, they have sat untouched in their wallets for protracted periods of time, implying that nobody has access to them.

Kirobo’s solution to this is the ‘Undo Button’.

2. Token swaps must be performed through one of three intermediaries — a centralized exchange, a decentralized exchange, or an OTC custodial party. Centralized exchanges and OTC parties take custody of assets/private keys, thus presenting a security risk. Decentralized exchanges (DEX) are prone to slippage, altering token prices according to their supply/demand algorithms, as well as charging high transaction fees. This means that users do not get a fair deal.

Kirobo’s solution to this is the ‘P2P Swap Button’.

Kirobo’s solutions — the Undo Button


Kirobo’s Undo Button is a retrievable transfer service. It effectively prevents cryptocurrency being sent to the wrong address, by mistake or by fraud.

How it works

The Undo Button prevents mistakes by requiring the first party (“sender”) to protect their remittance with a passcode, which they communicate to the second party (“recipient”) independently of the system. The recipient must enter the passcode in order to collect their funds, and the sender can cancel the transaction and retrieve their cryptocurrency at any time until the passcode is entered.

This prevents the possibility of sending money to the wrong address, because the transfer will only be actioned upon receipt of the correct passcode from the intended recipient.

The Undo Button mechanism does not require an additional transaction to retrieve funds, and thus does not compromise the integrity of the blockchain. Furthermore, the service is non-custodial, so even if Kirobo were to be hacked, the hackers would gain nothing.

Authentication process

When a transaction is initiated, the sender’s device transmits the transaction data, authentication key, and optional personal message. The authentication key is created by the sender’s device and comprises the passcode created by the sender, a public salt, a private salt, and hash values derived therefrom. The authentication key is sent to the smart contract and the two salt values, transaction data, and personal message to the Kirobo server. The Kirobo server sits outside the blockchain.

The server then sends to the recipient’s device the transaction data, a message if the sender chose to write one, and the public salt. Visible to the recipient is a pending incoming transaction and the message. When the recipient enters the passcode (received from the sender independently of this mechanism), their device will combine it with the public salt to create a hash value which is sent to the server. The server verifies the passcode by combining this hash with the private salt and hashing the resulting value. If valid, this will recreate the authentication key originally provided by the sender’s device. In this case, the server will tell the smart contract to ‘collect’, and the transaction will be actioned.

In this way, the passcode alone is insufficient to validate the transaction, so that, for example, if communication of the passcode was intercepted or overheard, the imposter would not be able to collect.

Currently, the service is compatible with ETH, USDT, BNB, UNI, LINK, DAI, USDC and WBTC. BTC compatibility has been temporarily disabled but will be reinstated in the future.

Kirobo’s solutions — P2P Swap Button


Previously, token swaps could not be reliably executed on a purely peer-to-peer basis because there was too much scope for wrongdoing and/or mistakes. Users had to rely on external venues to manage the trade, be they exchanges or custodial third parties.

The P2P Swap Button enables users to execute simultaneous, passcode-protected peer-to-peer swaps, without risk of mistakes. As a result, they are able to set their own prices, avoiding the slippage characteristic of exchange venues.

The slippage problem

Decentralized exchanges (DEX) emerged in 2014 as a decentralized solution to the custodial flaws of centralized exchanges. They provide a blockchain-based alternative to entrusting funds and keys to a third party, but have a different problem — slippage.

Slippage is the difference between a cryptocurrency’s market price and the actual cost at time of execution. It is a product of three variables: trade size, pool size, and the balance mechanism of the DEX used.

When you trade on a DEX, you’re depositing tokens into the pool and asking to withdraw another. The act of doing so alters the balance of the pool. For example, if a user wants to trade 1,000 ETH for token n, the price of token n will increase, giving the user fewer token ns for their ETH.

The imbalance is proportional to the amount traded — in other words, the larger your trade, the higher the slippage.

Kirobo’s solution

The P2P Swap Button executes simultaneous swaps via smart contract, negating the need to use an exchange. The parameters of the swap are agreed upon before completion, including the token prices, so slippage is avoided completely.

Technical explanation

The P2P Swap Button operates on a similar basis as the Undo Button, so that the initiator of the swap can cancel and retrieve their funds until the second party has input the passcode. However, the second party must also sign the transaction, and upon doing so, the smart contract executes a two-way transfer from both wallets simultaneously.

As with the Undo Button, the user initiating the transaction connects their wallet to the Kirobo interface and inputs the parameters of the trade. In this case, the parameters to be specified are both denominations of token, both amounts, and both addresses. As with the Undo Button, the first party creates a passcode which they communicate to the recipient separately, and can also attach a written message to the recipient.

The second party will review the parameters of the trade, and providing they approve, input the passcode they received from the first party. If the passcode is judged valid by the server, their wallet will ask for them to approve the transaction. Then the smart contract will collect the correct number of tokens from both wallets and deposit them in the other, simultaneously.

The first party can cancel the transaction at any time until the second party enters the correct passcode and signs the transaction.

The article is not investment advice and must be used for informational purposes only. It is very important to do your own analysis. You can use KIRO for utility purposes only. Israeli, Canadian, and USA citizens cannot buy KIRO.



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Alex Goldberg

Alex Goldberg

A huge crypto fan. I believe that the decentralized world is the future, Blockchain technology is changing the world.