Stably is participating in a virtual bootcamp called libracamp to build layer-2-solutions on top of the Libra blockchain. Starting with a phone number based registry that enables users to send Libra and other tokens to any phone number in the world.
In this post, we want to explain the reasoning behind choosing Libra, why we think it will succeed and what exactly we are planning to build.
Over the last months Libra has been gaining momentum. Despite raising a lot of controversies, the technical implementation is based on some of the best aspects of notable blockchain projects such as Tendermint, Ethereum and Bitcoin.
This will allow Facebook to facilitate frictionless payments for their large pool of users within a short period of time. However, we believe that the blockchain will also have a market outside of the Facebook ecosystem. Independent wallet providers and layer-2-solutions will leverage different standards to compete with Facebook. Already today projects such as OpenLibra are working on this.
Additionally, we see a big opportunity for tokens on Libra as Facebook itself has announced an investment token on Libra in order to gain funding. Like on Ethereum, the token ecosystem and Defi applications are likely to play a significant role.
What we will build
Libra addresses like such are 64 characters long:
This renders them difficult to use for everyday interactions. Without meaningful aliases, discovering a friend’s Libra address becomes a complicated multi-step process.
We propose a Layer-2-Solution that lets users use their phone number as an alias for their Libra Address. This will allow them to send Libra to any phone address in their address book.
Similar to how website domains are mapped to IP addresses, our decentralized Identification System leverages Libra Smart Contracts to abstract cryptographic addresses away to a more user friendly alternative.
To demonstrate the usefulness of this solution we will build a Wallet Appthat allow users to send Libra and our USD Tokens (USDS) to each other using their phone numbers.
Based on Shamir’s Identity-based cryptosystems research we propose a decentralized, phone number based identification system.
Multiple Validators, ideally nodes on the network, will be incentivized with additional transaction fees to process user identification requests (Step 1) with our open source solution sending out SMS verification via the Twilio API (Step 2).
For the user, both the interaction with the Validator and the transaction to the Smart Contract will happen in the background in a cryptographically secure way. To create the alias, the smart contract stores the [phone number -> Libra address] mapping upon successful validation (Step 3). Wallet apps will query the smart contract for the phone numbers in the user’s address book to discover their libra addresses (Step 4).
The business model
Besides the address registry network Stably is planning to build the following layer-2-solutions:
- Pegged Stablecoins
- Gasless Token Transfers
- Subscription-based Payments
Pegged Stablecoins will be launched first by Stably. Starting with the US Dollar, similar to our current products USDS and USDSB. We have started developing on Github based up on the existing eToken standard by Omri Ross which allows for ERC20 like Tokens on the Libra blockchain. We have found that Libra’s Smart Contract language is exceptionally well suited for tokens. Resources (data structure types) cannot be moved or copied thereby preventing accidental duplication and loss in smart contracts.
Gasless Token transfers allow users to pay for transaction fees in custom tokens instead of Libra. Not only does this increase the usability of tokens, but it will also create a more seamless and less complex user experience. On the technical side, this is done by sending Metatransactions to a network of relay nodes. Ultimately, this feature will be unlocked by the phone number based registry as it offers a reliable way to keep track of the transaction nonces to prevent replay attacks.
Subscription based Payments dominate the way services are compensated in the Web2.0 world — Spotify, Netflix, etc. all base their income models on subscription payments. The concept of cryptocurrency subscription payments is not new — in Bitcoin the nLocktime can be utilized to ensure a pre-signed transaction cannot be included in a block until a particular block number. Building the architecture for a transparent, user-friendly, opt-out payment standard will be a challenging task, but will result in great monetization opportunities for millions of businesses.
We have gained extensive technical knowledge in decentralized systems and are proud of our rich partner network in the blockchain space. We are a team of equity market traders, engineers, and payments experts. This will allow us to effectively bootstrap the proposed identification system on top of Libra. We would love to hear your feedback!
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