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Golden Hardcore | StarkEx: The Future of Crypto Trading



Golden Finance recently launched the Hardcore column to provide readers with introductions or in-depth interpretations of popular projects. Press: On June 4, 2020, StarkWare, a zero-knowledge proof development organization, launched the scalability engine StarkEx on the Ethereum mainnet, and it has been deployed on DeversiFi. StarkEx uses zero-knowledge proofs to enable centralized exchanges to provide self-custodial services and bring liquidity into self-custodial transactions. The current transaction speed can be as high as 9000TPS, compared with the TPS of Ethereum is only around 3. This issue of Hardcore introduces StarkWare's interpretation of StarkEx. Traders and investors will experience massive changes in crypto trading. Traders will be able to trade in the most intuitive way: trade directly in their own wallets, maintain escrow status at all times, and take advantage of the liquidity pool provided by Centralized Exchanges (CX). In addition, traders' funds are always available for payment. Exchanges will also change. Exchanges will provide custody transactions and self-custody transactions (Self-Custody, SC) for customers to choose, and all transactions come from the same liquidity pool. They will reduce the operational risk associated with custody of crypto assets. They will be able to provide transaction protection to their customers and protect them from harm. A crypto exchange that provides tailored premium services for any tokenized asset will be comparable to Wall Street exchanges. From time to time we see information about the risk of CX custody of encrypted assets, most recently Binance, before Bithumb and Quadriga and many other hacks of CX, even dating back to the infamous Mt.Gox hack. Unlike real-life robberies, each of the aforementioned hacks resulted in the theft of encrypted assets worth tens to hundreds of millions of dollars. Jinse Finance mining data broadcast: BTC’s network computing power rose by 2.33% today: Jinse Finance reported that according to the data of Spider Mining Pool: BTC’s total network computing power is 152.682 EH/s, mining difficulty is 21.05T, and the current block height is 686893. The theoretical income is 0.00000618/T/day. The computing power of ETH is 613.532TH/s, the mining difficulty is 7938.16T, the current block height is 12597647, and the theoretical income is 0.00270565/100MH/day. The BSV network computing power is 0.734EH/s, the mining difficulty is 0.10T, the current block height is 690836, and the theoretical income is 0.00122537/T/day. The computing power of the BCH network is 2.612 EH/s, the mining difficulty is 0.36T, the current block height is 691430, and the theoretical income is 0.00034451/T/day. [2021/6/9 23:23:29] We rarely hear of exchanges outside the blockchain industry being hacked. Why? The reason is simple, those exchanges do not hold assets for traders, so there are no financial assets that can be stolen. Centralized exchanges in the blockchain industry are different. They host users' encrypted assets, so users face huge counterparty risks. This is a historical "bug", an artifact of cryptographic design and limited blockchain bandwidth, and somehow turned into a so-called "feature". It’s worth emphasizing that in the blockchain space, custody is actually far more dangerous than elsewhere, because no trusted party can reverse an illicit transaction: stolen assets cannot be recovered. Through hosting, the centralized exchange has formed a huge asset honeypot, and hackers are always thinking about intrusion and theft. StarkWare recently demonstrated the ability to conduct large-scale self-custodial transactions, achieving 500 transactions per second on Ethereum, which is 200 times higher than Ethereum's current TPS. We expect this metric to grow significantly in the coming months. We believe that self-custody transactions are now ready and therefore inevitable. Jinse Finance Mining Earnings Report|Today’s BTC network computing power is about 118.54EH/s: Jinse Finance reported that according to OKEx mining pool data, today’s BTC network computing power is about 118.54EH/s, and the network’s difficulty is about 16.10T. The current block height is 630183. After the halving was completed yesterday, some mining farms have shut down the mining machines of the previous generation of 16nm chip technology represented by Antminer S9. With the expiration of part of the farm electricity contract brought about by the alternation of flat water and abundant water, if the currency price does not rise sharply, it is expected that more old mining machines will be eliminated by the owners. Current BTC earnings: 0.00000781BTC/T/day. It is predicted that the next difficulty will be 16.73T (+3.90%), and there are still 5 days left before the adjustment. [2020/5/13] This article will focus on StarkWare's centralized exchange solution StarkEx, which will bring the benefits of self-custodial transactions to the huge liquidity pool of centralized exchanges. We believe that once centralized exchanges introduce StarkEx into their main systems, crypto asset trading will become more efficient, secure and larger. Together with 0x, we recently launched the Alpha version of StarkDEX, a scalability solution for decentralized exchanges (DEXs). The figure below is a comparison of centralized exchanges (CX) and decentralized exchanges (DEX) in several important aspects, and how StarkDEX and StarkEx address their main shortcomings. Centralized Exchanges and Decentralized Exchanges Comparison Chart Liquidity requires scale. Exchanges must be able to match and settle large volumes of trades to provide liquidity. The blockchain (i.e., layer 1), as a public distributed ledger, is a very natural place to record the ownership of encrypted assets (especially transaction settlement). However, the operation and storage capacity of the blockchain is greatly limited. For example, Ethereum can currently support up to about 40–50 transactions per block, which is equivalent to about 3 transactions per second. This is in terms of scalability and liquidity. Both are very low. Golden Relativity | DappReview CEO Niu Fengxuan: Blockchain can transform the collaborative relationship between developers and players: In this issue of Golden Relativity's "Dapp Game", for Tong Yang, the content-ethexc partner of Golden Finance, "in addition to the gameplay, are other levels There are reasons that contributed to the outbreak”, Niu Fengxuan, CEO of DappReview, said that blockchain is just an additional technology and tool that we can use for games. Console games were born in the 1960s, and today they are still fiercely competitive and popular. Steam, as a distribution giant for end games, does not need listing and external financial support. Niche games have long been a tens of billions market and are still growing. The term "blockchain game" is even a pseudo-concept. It was only used to refer to all games that use blockchain technology in the early days of the industry. In the end, these games still have to land on different platforms. So, can the blockchain subvert the entire game industry? I don't believe it. The blockchain can transform the collaborative relationship between developers and players. It can increase the economic attributes and incentive mechanisms of the game by introducing token economy and asset tokenization. It can allow players to now own a physical entity in the real world. The virtual assets in the game are the same as items. These are innovations and optimizations, not holding a banner to deny all traditional games. In the final state, for most players, the experience of blockchain implanted in the game should be indifferent, as long as the game is fun, it does not matter whether the blockchain is used or not. [2018/12/3] The centralized exchange is actually a trust-based 2-tier solution, which is currently the only means with high liquidity. In order to do this, traders must surrender custody of their crypto assets. If a trader insists on retaining custody, he must trade on illiquid decentralized exchanges (DEXes). The market voted unequivocally on the matter, CX is much bigger than DEX. When forced to choose between high liquidity and SC trading, traders chose liquidity. But traders still want the best of both worlds: high liquidity and SC trading. With StarkExchange, they can have their cake and eat it too. Analysis | Golden disk: XRP/USDT oscillates near the neck line: Comprehensive analysis of the golden disk: XRP/USDT oscillates around the neck line at $0.352. If pressure is encountered at the neck line, it is more likely to continue downward. In the later stage, you can pay attention to the support level of 0.341 US dollars. [2018/8/18] The central exchange (CX) custody will face many problems, which will affect its profitability, operation and regulatory risks. Hindered profitability: Revenues are down, costs are up. Income: When it comes to retail, crypto trading is widely considered to be the "Wild West." This may not deter early adopters, but it will likely prevent the next round of large-scale landing. Customers are asked to trust the exchange's custody despite overwhelming evidence to the contrary. Institutional investor demand is also negatively impacted: if custody is handed over to CX, it becomes more challenging to take advantage of liquidity opportunities that exist elsewhere in a timely manner. Cost: Protecting large assets leads to increased costs; high-quality security operations are expensive. The larger the asset, the more attacks are triggered. With fewer assets, there is less incentive to attack, and the cost of securing the system is lower. Insurance is also expensive, not only because the industry does not understand the cryptocurrency industry well enough, but also because of the unique ownership model of crypto assets, where no trusted party can recover from malicious actions. Disadvantages of custody operations: There is a huge operating overhead to maintain custody of billions of dollars worth of encrypted assets. Interestingly, centralized exchanges will deploy teams that have undergone strict scrutiny. These teams are trustworthy and can control the private keys of encrypted assets. Security requirements required these teams to be as small as possible, but workflow requirements pushed them in the other direction as more and more assets were handled. The burden of custody means that centralized exchanges are not as flexible as they should be. Regulatory risk: Regulatory regimes often require custody to be separated from investment or trading. In the case where CX does not host encrypted assets, it is easier for regulators to achieve this type of investor security protection. Jinse Finance live report Chen Qiannan, Chief Operating Officer of Chengyun: Blockchain is a necessity for the big travel industry 3.0: Jinse Finance front reporter reported in real time, at the 2nd Global Financial Technology and Blockchain China Summit 2018 held on April 12, Chen Qiannan, Chief Operating Officer of Chengyun, gave a speech on "Reshaping the New Travel Pattern" at the meeting, saying that the blockchain is a necessity for the big travel industry 3.0. In the big travel industry 1.0 industry, booking tickets are ordered through the Dos black screen system agent; in the big travel industry 2.0, the black screen is transformed into a white screen system, and users can book tickets independently. However, the Internet cannot solve the existing problems of big travel. The centralized organization has mastered customer data. When it comes to the big travel industry 3.0 system, the blockchain can empower and upgrade the big travel industry. [2018/4/12] STARK can provide a layer 2 solution on Ethereum (that is, a solution that runs on top of the Ethereum blockchain), which is a scalability engine that will allow CXes to provide SC transactions to Take advantage of its large liquidity pool. Like other scaling solutions based on zero-knowledge proofs (zkp), we do not change the fundamental functionality of the blockchain, but rather its goal, from computing small payloads on-chain to verifying exponentially smaller payloads computed off-chain. large payload. The basis of the ZKP scalability engine is the recognition that the blockchain should be used for verifying computational proofs, not for general computation. Instead of doing transaction settlement (computation) directly on the blockchain, the blockchain is used to verify STARK proofs, which verify the validity (validation) of a large number of pending transactions. The STARK proof system is highly asymmetric in computing work distribution, where the prover does a lot of work and the verifier does little work (exponential reduction). Now, if the prover runs in the cloud (off-chain) and the verifier runs on-chain, we can exploit this asymmetry to verify on-chain a lot of computation done off-chain. Note that not only can the prover run off-chain, but it doesn't actually need to run open-source, because in the proof system, there is no trust assumption about the prover. The blockchain is rarely used, the commitment to the off-chain state is stored off-chain, and the verifier performs little computational work on-chain to verify off-chain state transitions. Since StarkExchange only accepts valid transactions, the prover itself cannot generate proofs for transactions not properly signed by users. This means user funds cannot be stolen. If users have access to off-chain state, they can always walk away with their funds. Neither the exchange nor the prover can withhold these funds, as users can activate "escape pods," essentially an emergency mode activated at the user's discretion when they refuse service, and they can withdraw directly from the on-chain smart contract funds. Activating the "escape pod" is a key component of securing SC deals. In order to activate the "escape pod", a trader must have the ability to prove ownership of the asset. Ideally, one would like to have both SC transactions and privacy. There is currently a tradeoff between the two, DEXs offer SC transactions without privacy, CXs protect the privacy of other traders (not the CX itself!), but no SC transactions. StarkExchange may eventually achieve this trade-off through shielded trades. In the absence of confidential transactions, different data availability solutions can be selected based on the degree of trust in the exchange. We envision some possible options (and there are sure to be others): Trustless: transaction data is sent on-chain. In order to reduce the data size, the digital signature is not stored on the chain, and the digital signature needs to be verified by the prover as part of the proof. This represents an effective transaction volume cap, which is determined by Ethereum's capacity. It is worth noting that for the native deployment of StarkExchange, the data on the chain will easily generate 3,000 transactions per block, which is 100 times the current capacity of Ethereum. Minimize Trust: Put cryptographic commitments to the state of exchange accounts on-chain. The full cryptographic state is publicly stored off-chain, and its availability guaranteed by a trusted federation. The federation will guarantee that it sees the public copy of the state. Trust-Based: Puts cryptographic commitment to the state of exchange accounts off-chain. The full state is stored privately by the exchange, which means that traders enjoy the privacy of third parties.


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