One Easy Trick to Make Your Favorite EOS Token Project More Valuable
Most of us have gotten excited about projects on the EOS blockchain. We might even be investing our own hard-earned cash into a project and buying some tokens. However, that’s as far as our excitement is allowed to go. After buying tokens, we are then met with a waiting game, forced to passively standby while the devs get the project up and running. Well, I am here to tell you otherwise because there is, in fact, something that you can do to add value to your favorite projects: Ask the devs for Multsig.
Multisig is short for multiple signatures. It refers to accounts that need two or more signatures in order to successfully sign any transactions on behalf of the account. Multisig is preferable because it prevents a situation in which any one person or computer is single point of failure of a project.
A single key pair owner permission governing a token smart contract introduces security risks and attack vectors against the dApp the token contract supports.
Multisig represents a movement away from centralized tokens that require only a single signature. In the example below, you can see the single “owner” authority allowed by centralized tokens.
Decentralized tokens, on the other hand, require multiple “owner” authorities, as is indicated in the example below.
EOSIO allows smart contracts to be updated on the blockchain after being deployed. This feature is very useful, since it allows developers to improve their dApps on a rolling basis. However, this power also comes with responsibilities. At the same time that the owner of a token smart contract can improve the contract functionality, extending its repertoire of actions and functions, the owner can also manipulate the token’s core aspects, like its circulating supply and token ownership. It is difficult to imagine a situation in which the legitimate contract owner would make such malicious changes on purpose, but a single user is always vulnerable to hacks and attacks. Often the solution for this problem is to burn the owner keys (effectively removing the possibility of any update from anyone), but in practice adding multisig to the contract is more viable to projects. In summary, a contract is much more reliable and secure when it has either burned its owner keys (after making all necessary updates) or has at least set a multisig to its owner.
There are three main reasons why a project should go multisig:
- Token Security: A multisig token contract is better protected against hacks that could mint tokens or even change smart-contract specifications and functionalities;
- Governance: It is a best practice to have multiple parties involved in the decision making when a whole community is affected by changes. A multisig account allows for better and transparent checks and balances.
- Token Value: A safer and more trustworthy token will increase any projects, bottom line.
Decentralize your Token by adding multisig to your smart contract owner and active authorities, and after you are done with your change, burn the keys.
For more businesses to flourish in the EOS ecosystem, they must be able to rely on the security and stability of tokens. People are going to shy away from tokens that are unpredictable. And, well, they should. But with more decentralized tokens, they don’t have to question the consistency of the tokens. A multisig smart contract prevents a single rogue user from manipulating the token’s fundamental properties.
Here is Obolus recommendation to token projects: Decentralize your Token by adding multisig to your smart contract owner and active authorities, and after you are done with your change, burn the keys, i.e., give the control to a system account like eosio or eosio.token.
If you wanna help your favorite project, send the devs of your favorite project something like this:
Dear project owner,
Thank you so much for putting all these sleepless hours on my favorite project on EOS. You rock!
I notice that the token contract authorities for Owner and/or Active are still under one single key/authority. I know that you must be busy building the future, however I believe that the EOS ecosystem (and our project) will be much safer if you could give control of the Owner, Active and any other authority with the ‘setabi’ command to ‘eosio’ or at least a multisig account. #askmultisig
All your community will be thankful and more secure.
Yours favorite token holder.
If you also believe that tokens must be decentralized on EOS, share this article with the hashtag #askmultisig
Obolus smart contracts support Multisig. Read more about our joint announcement in this link or Trade Now on Switcheo Exchange.
Following this article, stay tuned for an in-depth explanation on the various decentralized platforms.
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