The DeversiFi Data Availability Committee has assembled!

DeversiFi is preparing to re-launch, powered by zero-knowledge proof settlement, allowing us to offer highly scalable trading comparable with any major centralised exchanges, whilst at the same time allowing you to trade without counter-party risk. This upgrade is in collaboration with StarkWare - a team of experienced cryptographers and engineers who designed the zero-knowledge scaling system DeversiFi will now use. To learn more, stay tuned and be the first to hear about important updates and trial days sign-up to our newsletter here.

As part of the solution, the upgrade also introduces a Data Availability Committee.

The Committee holds balances data off-chain and takes part in signing the commitments which update the blockchain state. This ensures that even if DeversiFi and StarkWare go offline, there will be an easy way to make sure that customers can withdraw their funds.

Why is the Data Availability Committee needed?

Privacy is key to trading. In addition to being slow, existing decentralised exchanges make all trades visible, however professional traders want to protect their trading activity and proprietary trading strategies from competitors and public view. Privacy will be a key requirement for decentralised exchanges to gain traction with this audience moving forward.

In order to achieve privacy, DeversiFi trader’s balance data will be moved off-chain, rather than storing it on the blockchain. There are several other privacy achieving methods that are currently being researched by StarkWare that could be implemented in the future, without requiring data to be stored only off-chain by a committee. However, the current approach was chosen as a pragmatic solution following conversations with large customers and will be improved in the future.

What is the Data Availability Committee’s Role?  

The Data Availability Committee has three main functions:

  1. Protect user trading privacy by allowing balance updates and trades to be hidden from other users.
  2. Check the balances state and if valid sign to allow the merkel root of the state to be updated on-chain.
  3. Publish all balances data if DeversiFi and or StarkWare were ever to go offline or withhold data.

The initial DAC committee is comprised of a small number of members, that were selected based on the following criteria.

  • Experience with running high-availability infrastructure
  • Relative independence from each other
  • Long-standing public reputation
  • History of supporting new technology and desire to be leaders in demonstrating the potential of a new second-layer scaling solution for Ethereum
  • Geographically diverse, both in terms of the entities themselves and their server locations

The group will be expected to grow as the size of assets held grows. We are excited to have such a highly respected group of members to allow us to kick off the first ever STARK-powered decentralised exchange.

Consensys: Founded in 2014 by Ethereum co-founder Joseph Lubin, ConsenSys is a market-leading blockchain technology company.

Infura: Infura is an infrastructure provider connecting users to Ethereum and IPFS.

Nethermind: Nethermind builds Ethereum solutions for developers and enterprises. Boosted by a grant from the Ethereum Foundation in August 2018, our team has worked tirelessly to deliver the fastest Ethereum client in the market, optimised to the very last byte.

Iqlusion: Iqlusion provides infrastructure for next-generation cryptocurrency technologies which are designed and built to scale to real-world demands.

StarkWare: StarkWare solves the inherent problems of blockchains – scalability and privacy. They develop a full proof-stack, using STARK technology to generate and verify proofs of computational integrity.

DeversiFi: DeversiFi, the first self-custodial exchange allowing traders to execute orders of any size directly from the security of their private wallets. Becoming the first StarkWare powered exchange by March 2020, offering deep-liquidity, high-speed, low-fee and instant settlement

Cephalopod: Cephalopod Equipment is based in Canada, serving the global Cosmos and staking communities. The Cephalopod team has significant experience in data center operations, distributed systems, and cryptocurrency. The team is comprised of long-term contributors to the Cosmos project including Ethan Buchman, co-founder of the Cosmos project.

How does the DAC work in practice and how are members incentivised?

In the normal course of affairs, committee members are responsible for:

  • Receiving each state transition and signing a commitment to the new state
  • Keeping a copy of this state private and secure

The exchange’s smart contract does not accept a state transition unless enough committee members have signed on the new state.

The DAC has an important role to play in a meltdown scenario, where both the exchange and StarkWare deny users’ withdrawal requests. In such an event, the exchange’s smart contract freezes the system, and committee members are responsible for making all their stored data publicly available so that users can safely retrieve their funds directly from the exchange’s smart contract. This is what is known as the ‘escape hatch’

Each member of the DAC runs a specialist piece of software on a dedicated server and is incentivised to ensure maximum uptime and performance via monthly payments from DeversiFi in the form of NEC tokens equating to a fixed monthly USD amount. As trading volume on DeversiFi increases, the NEC token may appreciate in value and therefore DAC members are incentivised to ensure they achieve maximum up-time.

Examples of logs from a DAC client are below:

For more information on the StarkWare technology, the technicalities of the Data Availability Committee or the escape hatch, see the StarkWare public GitHub repository

To apply to be a DAC member, please email info@deversifi.com