World News: 14:00 GMT Tuesday 3rd December 2019. [Vega Protocol via Businesswire via SPi World News]
Dr. Klaus Kursawe, Vega Protocol BFT and blockchain researcher, led discussions during San Francisco Blockchain Week on how many of today's decentralized trading protocols are sidestepping or paving over four major technical issues that will preclude mainstream adoption of DeFi products.
As outlined by Vega’s research, these systemic issues present both old and previously unknown impossibility results that can disrupt current decentralized trading applications built on both Proof-of-Work (PoW) and Proof-of-Stake (PoS) protocols:
While both PoW and PoS protocols are affected by these issues, both use fundamentally different approaches to navigate their results. Vega’s strategy is to use a PoS solution, which is better suited to address the unique needs of financial markets. Vega’s solution is a PoS-based protocol, designed for financial markets. In addition, their protocol’s proposed architecture provides the flexibility needed to adapt to future changes, including portability to other existing platforms or the ability to replace the consensus protocol on the fly through an on-chain vote.
“PoW protocols have had a great impact on Byzantine fault-tolerant applications, and have enabled a large number of exciting applications. However, for the case of trading, we believe that the latency, finality and fairness goals strongly prefer a voting based (i.e., PoS) set of protocols, even if that poses new challenges in keeping the network open and permissionless,” said Dr. Klaus Kursawe.
Vega’s decentralized trading protocol resolves the issues above for posterity, presenting a better or alternative protocol for the development of, and porting over of existing DeFi products and exchanges. As it stands, DeFi applications being built on smart contract platforms, depending on their use case, could potentially encounter obstacles as these impossibility results arise.
Recently,, “there’s now more Ethereum (ETH) tied up in DeFi apps than ever before.” The legacy blockchain today hosts an all-time high of 2.36 million ETH in lockup for DeFi apps valued at more than $420 million. That number is likely to increase as more and more blockchain projects latch onto the latest “killer use case” for cryptocurrency.
These numbers become more alarming if we consider the existing limitations of decentralized exchanges. The need for liquid trading, and an eventual stable medium of exchange, are major components for the adoption DeFi DApps. Proper infrastructure is required to architect a decentralized financial ecosystem for the trading of both crypto and non-crypto products.
Vega Protocol plans to dedicate significant research and development resources to tackle the obstacles in successfully architecting the decentralized finance (DeFi) world. Through collaborative efforts, the Vega team plans to craft viable solutions for the mainstream adoption of decentralized technologies.
Keep up to date by following Vega on. Join the discussion and find out about upcoming events in their forums at .
To learn more join Dr. Klaus Kursawe’s AMA on Friday 22nd November at community.vega.xyz
Dr. Klaus Kursawe started working on Byzantine Fault tolerant protocols in 1998 in the context of the MAFTIA project, designing the first practical protocols for fully asynchronous ordering. He also worked on issues around practical implementation, such as membership management. This work was published and shared at leading cryptographic and distributed systems conferences such as Crypto, ACM CCS and PODC, as well as implemented in IBMs Sintra and in part formally verified. He has since worked and taught in a wide area of cryptographic and security related activities, including hardware security, IoT security, privacy, and the security of critical infrastructures, and has published about 50 peer-reviewed papers and book chapters. In the blockchain world, Dr Kursawe was advisor to the Chainspace project and performed pre-publication security reviews for the consensus layer of the Libra protocol.
Vega is building tools that guarantee the freedom to trade and make capital markets available to everyone. This vision will be realized through a protocol for creating and trading derivatives on a fully decentralized network. Traders can use the Vega protocol pseudonymously and be rewarded by other participants for creating new products and providing liquidity. Follow along onto see the latest updates, including news and details about the concepts underpinning Vega. This communication is issued by Vega Holdings Limited.
Business Wire: 14:00 GMT Tuesday 3rd December 2019
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