Update: Resistance have announced a reduction in the hardcap of the project, reduced from $18m USD to $6.8m USD. 42% of the available tokens for the TGE will be sold in a private sale, with the remaining 8% being sold to the public as part of an IEO on an as yet unnamed exchange. The sale has also been pushed back from Q1 2019 to Q2 2019.
Resistance: The First Anonymous Decentralized Exchange (DEX) & Privacy Coin with CPU Mining & Masternodes
The Resistance project and DEX (ResDEX) comes at an opportune time in the scheme of DEX’s, with a recent run of bad press against the incumbent DEX platforms. The EtherDelta founder, the granddaddy of DEX’s, was recently charged by the SEC for operating an unregistered exchange, leading to questions as to its ongoing existence. Prior to this charge, EtherDelta had already been dying a slow death, with the platform being sold by the initial owners and a hack in late 2017 affecting consumer confidence in the platform, resulting in greatly reduced volume and interest on the exchange.
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The Securities and Exchange Commission today announced settled charges against Zachary Coburn, the founder of…
IDEX, the latest kid on the DEX block, and the DEX with the most volume of the past six + months, are now in the reactive process of making several fundamental changes to their platform in order to comply with the increased focus of regulators on DEX operators. While never a true DEX, IDEX has reaffirmed that fact and refers to the platform “as a “non-custodial” or “hybrid-decentralized” exchange”.
In the article below, along with admitting their own decentralisation shortcomings, IDEX actually provide an excellent playbook as to the steps required to achieve full decentralistion, something it seems the Resistance team have taken on board, as outlined in the project overview below.
Pragmatic Decentralization: How IDEX Will Approach Industry Regulations
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Perhaps the fairest comparison regarding Resistance and existing DEX platforms, from a purely technical standpoint, is in existing standalone client based DEX’s, the leading example of these being Waves. The major difference between Waves and Resistance/ResDEX (past the obvious privacy differences covered below) is that on Waves all pairs use BTS as the base currency/pair, while ResDEX supports paring between all currency types.
A full comparison of CEX and other DEX’s as compared to ResDEX can be seen below.
1 — ResDEX
ResDEX is accessible via the Resistance Desktop Application and is available on Windows, MacOS and Linux. This application is the core difference between Resistance and other “centralised” DEX platforms like IDEX or EtherDelta, and more in line with decentralised client offerings such as Waves and Komodo (though with several key points of difference to those also).
This is a very important point to note, as this is what makes Resistance truly decentralised. The decentralised client and blockchain, powered by CPU mining and masternodes, paired with the plan to release the project into the hands of the community once matured, means Resistance has the ability to be a fully decentralised DEX, not just in name, but also in practice. Without a single point of failure, such as a domain name/web host and a controlling entity who can be pressured by government authorities, paired with fully distributed/decentralised client and node infrastructure, Resistance has taken a leaf out of Bitcoin’s book in its quest for true autonomy.
ResDEX requires no user registration and users have no trade or withdrawal limitations applied to accounts. Required wallets are created for the user when installing/first run of the Resistance Desktop Application. Wallets can be backed up, restored and exported (and thus can be independent and imported into other wallets) from the desktop application and are secured via AES-256 encryption. Resistance will have full Ledger Nano support once mainnet is released.
Due to the way Resistance matches trades, unlike IDEX and EtherDelta, users retain full control of their funds at all times (they are not deposited into a smart contract/escrow for trading ala IDEX/EtherDelta). This removes another critical point of centralisation and issues surrounding custody of funds and how to access them, as happened with EtherDelta when it was compromised, and IDEX when it went though its extended maintenance periods. Instead of trades being lodged in an offchain database, matched and then eventually settled onchain, Resistance allows for peer to peer matching of trades, powered by their node infrastructure. In this respect, full nodes have an advantage over non relay nodes, as full nodes are the ones propagating the order book and broadcasting trades, they will be the first to see them.
Resistance state they will allow anyone to become a market maker on their DEX to ensure liquidity on the platform. Market markers would receive fee free accounts, however at this point in time it is unclear as to what the qualifying criteria is to become a market maker. One thing is for sure, liquidity is a key component to any exchange as no liquidity = no use of said exchange.
Additionally ResDEX allows hidden order books. Hidden order books, as the name suggests, are not viewable via the main DEX interface and instead can be setup as private “pools” between users, in which trades can be carried out away from prying eyes on an invite only basis. We’ll leave it up to your imagination as to the many uses this could have in the crypto ecosystem.
Most importantly, to avoid the main issue that has plagued IDEX and EtherDelta, that of SEC scrutinisation, users from the USA will be not only banned from participating in the token sale, but also from use of the overall platform itself.
There are three main components that make up the ResDEX client.
- Atomic Swaps
Atomic swaps are one of the key technological breakthroughs that have been developed in the blockchain space over the past two years. Essentially an atomic swap allows a user to directly trade one coin for another (swaps are direct blockchain to blockchain), without the need for any intermediary. Atomic swaps on Resistance are borne from the use of Komodo’s Etomic tech, as detailed in the article below.
With Etomic Swaps, Komodo Supports 95% of All Coins in Existence!
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Traditionally atomic swaps come with a great deal of overhead to the end user, with a full blockchain required at the clients end to facilitate an atomic swap (this can take a large amount of time and disk space, along with technical overhead for the end user). Atomic swaps on Resistance are made user friendly by giving users the ability to connect directly to Resistance nodes who hold these record on the users behalf. In that sense, a user can download the Resistance Desktop Application and once funds have been deposited to the appropriate wallets, can carry out an atomic swap almost immediately.
Resistance extends existing atomic swap capabilities by adding in an additional layer, called InstantSwap. As the name suggests, InstantSwaps are atomic swaps that remove the need to wait for block confirmation times. In terms of usability this is quite important, as block confirmation times vary from blockchain to blockchain and in some cases can take up to ten minutes plus.
InstantSwap sidesteps this block confirmation issue by allowing a users to deposit funds into a “time locked contact”. In this sense, at both ends, there is proof of funds, and as such, Resistance can then instantly (in less than a minute…this is based off the Resistance blockchain block time) facilitate the users trade, transfer the funds at each users end, and carry out the confirmation on the various blockchains post transaction.
- Zero Knowledge Proofs
Zero knowledge proofs is a concept that was introduced in a whitepaper called “How to Explain Zero-Knowledge Protocols to Your Children”. Zero knowledge is a critical component to the privacy layer of Resistance as it allows for a trade to be facilitated without direct knowledge of the internal details of the trade itself.
Zk-SNARK is a technical implementation of zero knowledge proofs that allows the process to happen as a single message and to be confirmed within milliseconds and was first used on Zcash. Zk-SNARK information is also publicly verifiable, allowing for any entity the verify the fact the transaction took place, without giving up the internal information of the underlying transaction itself. This technology is the underlying privacy protection that allows anonymous transactions when using the RES token.
- Tor Integration
Tor integration on ResDEX is an additional layer of privacy that ensures privacy protection for the Resistance Desktop Application and its connection to the distributed Resistance network. While transaction privacy is handled via the underlying Resistance blockchain and use of the RES token/Zk-SNARKs, Tor integration protects the network information of a user, ensuring that from connection to the network to communication of transaction across the network, a user is fully protected from any prying eyes.
It is the combination of these two pieces of technology that allows Resistance to be a truly anonymous DEX.
2 — RES Blockchain
The Resistance blockchain is a privacy orientated blockchain and is based off Zcash (which in turn is a fork of Bitcoin). As such, it includes all of the privacy features used in Zcash, and is used to facilitate trading using the RES token in which users can optionally trade on the ResDEX using RES as an intermediary coin. By carrying out a trade using RES as the intermediary coin, the transaction is fully private, utilising Zk-SNARKs, the RES token and the Resistance blockchain to obfuscate details of a transaction that would usually appear on a public blockchain, such as sender address, receiver address, input value and output value. In this sense, to compare to a traditional concept, RES acts as a tumbler or mixing service, but in a much more untraceable and seamless fashion and most importantly without relying on the underlying tumbled/mixed coins blockchain infrastructure.
To provide an example, a trade could be made from BTC to RES and then RES back to another coin, such as ETH, with the receiving coin having have no connection back to the sent coin. Alternatively a user could do a BTC to BTC trade, from one wallet to another, using RES as the intermediary token and the resulting transaction and receiving wallet would have “clean” BTC deposited.
The Resistance blockchain has a maximum two megabyte block size and one minute block intervals. 100 blocks are required before newly minted (i.e mined) coins can be spent. Proof of Work difficulty adjustment is set per block.
3 — Reward Splitting
Block rewards on Resistance are split into four main categories, Proof of Work (CPU Mining), Proof of Research (BOINC), Masternodes and Ongoing Project Development (Governance).
The proposed initial block reward is 100 RES with the maximum proposed block reward being 200 RES. From this block reward, 30% will go to Proof of Work, 30% will go to Proof of Research, 30% will go to Masternodes with the remaining 10% dedicated to Ongoing Project Development.
- Proof of Work (CPU Mining)
CPU mining is compatible with Windows, MacOS and Linux. CPU mining can be carried out directly via the Resistance Desktop Application (for ease of use) and additionally via a command line CPU miner (yet to be released and faster than the Desktop Application due to reduced overhead). While mining via the Resistance Desktop Application, users can specify how much CPU power is dedicated towards CPU mining (as well as Proof of Research).
The CPU miner operates off an ASIC resistant algorithm, yespower (a fork of yescrypt) and is optimised for CPU architecture, making mining on other architectures (ASIC, FPGA & GPU) too time consuming to be economically viable. The underlying principle of this design is to make the mining pool for Resistance blockchain as democratic as possible, i.e. the more accessible it is, the more clients can/will connect, the more distributed the network is, the more secure and hardened to attack it is. This same theory applies for the use of PoW combined with masternodes, as the network is not reliant on one “singular” source of power. I.e a single mining pool should not have enough hash power to control the chain.
- Proof of Research (BOINC)
Proof of Research is an older concept in relation to distributed computing however is a novel use of CPU power in relation to a blockchain project. Resistance has phrased this as giving Resistance users the ability to “make a positive contribution to humanity”.
Resistance will maintain a list of approved BOINC projects in which users can dedicate CPU resources towards. With block rewards being split evenly between PoW, PoR and masternodes, one would expect equal distribution of resources across all three elements, as if too many resources are applied to any of those individual elements, rewards for a user will decrease on this element, and thus it would make sense for the user to move across to the underutilised element thus increasing their portion of the block reward.
Resistance have setup a mining pool that allows users to connect the BOINC client to the pool for ease of use. The mining pool website can be found here — https://www.respool.io/
Instructions on how to connect and mine on respool are in the video below.
Masternodes on Resistance are much like masternodes on any other blockchain. They require a user to stake RES tokens in order to operate a RES node (10K RES) along with a VPS server running the masternode software.
Masternodes hold a full copy of the Resistance blockchain and will facilitate the decentralised order book and atomic swap process, along with additional functions. As previously stated, at this point in time they will receive 30% of the overall block reward for serving these froles.
Resistance state in their whitepaper there is the potential for masternodes to have the opportunity to receive “proportionally greater rewards (approximately) for larger stakes by running multiple nodes and/or, possibly, larger node types” however at this point in time it is unclear as to what this actually involves.
Masternodes will be implemented in Q2 2019 with the release of the Resistance mainnet.
At the private sale token price, a single RES masternode will cost $2347.90 (taking into account the 30% discount for the private sale). Based off the IEO token price, a single RES masternode will cost $3052.23.
- Project Development (Governance)
As per the Resistance roadmap, in Q3 2019 Resistance will be fully released to the community, fulfilling the promise of full decentralisation. As such, decisions that shape the future of the Resistance platform will be decided upon by community members, via the use of voting rights by masternodes.
There is a caveat on this governance aspect that has not been clearly explained in the whitepaper however and that is “how the money contained within a treasury should be spend, but again, this is something that will be decided by the community and a board made up of select community members”.
The treasury referred to is the 10% of each block reward that will be put aside to serve this purpose. It is currently unclear as to how this board of select community members will be decided. At this point in time this has been left open by the Resistance team, stating “the details on how decentralised governance will be implemented will be decided by the community”. As such, with such lack of detail at this point in time, it is difficult to make any judgement of substance (past decentralised governance = good) on this.
Resistance have also committed to dedicating 15% of their exchange fees to support a specific privacy project, as voted for by the Resistance community.
More details on the tech behind Resistance can be found in the article below.
As mentioned previously, the main functionality of the RES coin is to facilitate private and anonymous trading via the use of the Resistance blockchain.
To host a Resistance masternode on the platform, users will be required to stake 10K RES coins per masternode and this will have the usual effect on a masternode based blockchain network of locking these tokens from the overall circulating supply.
Users who hold RES in their RES wallet on the Resistance Desktop Application will receive a share of 50% of the fees generated by ResDEX, with this being proportional to the amount of RES the user holds.
Past the use of the RES token to facilitate private transactions on ResDEX, the RES token will be used to pay rewards to PoW, PoR and masternode participants, with 10% of all block rewards dedicated to the rolling project development fund, to be spent as needed, and as dictated by the governance stipulations of the platform.
The Resistance project has an overall hardcap of $6.8m USD (reduced recently from $18m), with $5.4m of this being raised in a ongoing private sale (attracting a 25% discount) and the remaining $1.4m being raised in an IEO on an as yet unnamed exchange, expected to be held in Q2 2019 along with release of the Resistance mainnet.
The RES token has an IEO price of 0.30523c USD while private sale receives and additional 30% bonus on this price, pricing the private sale RES token at 0.23479c USD.
In total, 30m tokens will be issued during the IEO and private sale from a total of 126m tokens. 60m of these tokens are pre mined, with 66m to be mined in the future.
It is unclear if unsold tokens will be burnt or added to the project development fund.
1.5m tokens will be dedicated towards an airdrop. The whitepaper does not provide any details on how this airdrop will function. One assumes this will be used as an initial seed for adoption of the platform.
A smart play for the airdrop would be to airdrop RES tokens to existing DEX users.
10.2m tokens are earmarked for the team/founders and advisors. An interesting point to note is the lock of team tokens for two years, which is more than acceptable, however these are locked into masternodes for this duration, meaning the team will control a potentially significant portion of the initial masternodes and as such, voting rights on the network.
While this is good for the stability of the network, the effect this will have on the decentralised governance model are yet to be seen. Based off a 10K RES stake per masternode, the Resistance team could run 102 masternodes on day one of mainnet.
Strategic partners (unclear as to who they are) will receive 5.4m tokens, with 2.16m of these tokens being available for immediate release.
As part of the most recent update to the project, Resistance have created an “ecosystem fund” and 15% of tokens are allocated to this fund which will be used to “further foster growth in the privacy community, funding researchers, projects, and partners”.
The remaining 3.9m tokens will be reserved for trans mining.
To exhaust the additional/total token supply via mining rewards, this will take approximately 125 years.
Resistance first came into existence in late 2017 and seems to have resisted (pun intended) the easy cash grab ICO time of 2017/early 2018, instead opting for a more measured approach, demonstrated in the multi faceted offering that reflects the learning experience and continued development of other blockchain projects during this time.
Q2 2018 marked the full formation of Resistance as an actual company. Initial seed funding was also completed at this time along with the prototype version of the Resistance network.
Q3 2018 introduced the Resistance testnet along with the wallet (with Tor integration) and CPU mining.
At the Q4 2018 stage of the roadmap, Resistance have ticked off InstantSwaps and fiat gateways, and have (wisely) pushed the public sale back to Q2 2019.
Q2 2019 heralds the launch of mainnet and the Resistance IEO should happen around this time.
Q3 2019 is when Resistance takes its final form, with release of the project to the community. One would expect this would include open sourcing of the code for peer review as part of this process, though not explicitly stated in the roadmap.
It’s refreshing to see a roadmap with the delivery of the main product close to the actual sale and “finalisation” of the product coming shortly after.
The Resistance team is 14 members strong with a team of 7 individual advisors. Team members of note include —
- CEO Anthony Khamsei founded Gold Security in 2012, a public online security company based in Stockholm Sweden.
- CFO Harry Li did a 9 year stint as a Corporate Finance Manager at Accenture.
- CTO Luke Wegryn most recently spent 2 years as Cisco as a Penetration Tester and Security Research Engineer.
- In the core Development Konstantin Alexandrov logged time at Microsoft for 4 years, while Alexander Peslyak is the founder of the Openwall project, creator of the yespower algorithm and former advisor to Zcash. Patrick Schleizer founded the security-focused Linux distribution Whonix.
All in all a very experienced team with a huge amount of experience in IT Security, InfoSec, privacy and development. Considering the scope of this project, really the perfect compliment for what is trying to be achieved.
On the advisory team there are several names of note.
- Ivan Liljeqvist from Ivan on Tech. Definitely one of the more legitimate voices in the space.
- David Kravitz. Formally IBM, Motorola. Vice President of DarkMatter.
- Vlad Ovtchinikov. Team trainer at Blackhat & Cyber Security Researcher.
It is unclear if these partners are simply incentivised partners or have taken a stake in Resistance as an investment also.
Resistance have also partnered with Simplex in order to allow users to purchase crypto using fiat directly via the Resistance Desktop Application. This seems like somewhat of an odd choice for an anonymous DEX, but if this helps with further ease of use and adoption of crypto, it can hopefully only be a good thing.
Ledger is also included as a partner of Resistance, and Ledger Nano support will be integrated into the desktop application also.
More recently, Resistance have also partnered with Huobi MENA in an agreement that allows for shared liquidity between both platforms and ResDEX access to over 150 cryptocurrencies and 350 trading pairs from Huobi.
Resistance is IDEX/EtherDelta meets Waves/Komodo, combined with Zcash/ZK-SNARKs and Tor, with the addition of its own privacy coin, InstantSwap technology and CPU mining. Quite a mouthful really. The Resistance approach is an interesting one, in the sense they are taking bits and pieces of existing technology, merging them into one and adding a few tasty sprinkles on top. No doubt this stems from the influence of some of the Linux/FOSS proponents on the team (along with plans to open source and release to the community). This has allowed for a much reduced time frame in regards to actual delivery of a product, something in the times of ICO’s over promising and under delivering (or never delivering), is more than welcome.
The Resistance offering is well thought through and coming at a time of increased regulatory oversight into DEX’s, exchanges and crypto in general, offers a distinct point of difference along with several other value offerings, such as mining and masternodes, that have made so many coins popular in 2017/18. The design of the platform should make it resistant to regulators, however this can only be known for sure as the platform goes into production and receives attention by such parties.
Of course the big question mark with any exchange, token or platform, is adoption and liquidity and this is something we’d like the Resistance team address in more detail before the token sale. Traders chase volume, so if Resistance can ensure volume and thus liquidity on the platform early on, while providing a better and more protected user experience than other DEX’s, this would be a huge step forward in ensuring the long term success of the project.
Is resistance to Resistance futile? We shall see…
- Private Sale is ongoing, IEO will be held in Q2 2019
- Fully decentralised (in the true sense of the word) client based DEX
- Forked Zcash blockchain inclusive of ZK-Snarks technology
- Privacy coin (RES) allowing for private and anonymous transactions
- Tor integration enabling communication privacy when using ResDEX
- ResDEX powered by Proof of Work CPU mining (yescrypt) and Masternodes (10K RES token stake required)
- Atomic Swap and InstantSwap technology allowing for direct blockchain to blockchain transfers/trading of cryptocurrencies
- Peer to Peer non custodial trading engine
- Hidden order book allowing for pool based private trading
- Proof of Research via BOINC. Token rewards given for giving back
- Strong team of InfoSec and Linux/FOSS luminaries
- Short roadmap delivering a finished product sooner rather than later. Mainnet scheduled for Q2 2019. Full release of the project to the community is scheduled for Q3 2019
- Partnership with Huobi MENA for shared liquidity between ResDEX and Huobi MENA, ensuring better liquidity for over 150 cryptocurrencies and 350 trading pairs
We have rated Resistance at 84.50% in our blockchain project review sheet.
This rating has recently increased from 83.25% due to the reduction of the Resistance hardcap. While this may be a small increase on such a large hardcap reduction, this has been offset by the fact mainnet is now scheduled for Q2 2019 instead of Q1 2019.
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Please note, the thoughts and opinions in this article are those of the writer and in no way should be considered financial advice.
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