This paper describes a way for drivechain to be implemented on monero with minimal impacts on privacy, analyzes community sentiment in BTC and XMR communities, and goes in depth on the security flaws inherent to drivechain as well as the possible ways they can be fixed. Below is the paper’s abstract verbatim.
Abstract
Monero’s private by default design and lack of major exchange centralization makes it an attractive central currency to develop drivechains on. Through a minimal scripting system other applications of cryptocurrency can be implemented on sidechains of monero while mainchain currency remains unaffected. Additionally monero’s tx keys may allow for better truly trust-less implementations of drivechains by having a built in secret to attest to an action made. While drivechain is by far not a perfect protocol the benefits it would add to the monero ecosystem, such as increased adoption through expansion of use cases and ease of fiat by having legal entity compliant sidechains, makes preliminary research into implementing it on monero worthwhile despite the fact that drivechains as they are should not be implemented on monero. This paper sets out to be heavily criticized so developers experienced at improving monero can adjust the outline below into something that can expand monero without damaging the security of funds and stability of monero’s fiat currency valuation.
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As you can see in my post on overlay networks I’m all in on DeFi. I just want to do it in a way that doesn’t ruin Monero in the process. Blind merge mining and hashlock escrows are NOT the way to implement it correctly. Twiddle sees the problems clearly and points them out, if you dare to read. (He got paid very little and invested a lot of time, so please read.)
I would implement dApps or scripting, first, not on monero core. One-way atomic swaps is all you need! BasicswapDex and Oxen are less known examples.
TL;DR: blind merge mining and hashlock escrows are an attack vector for monero security on the consensus layer and an entry point for trojan horses. We CAN have all the DeFi we want without compromising security.
https://yewtu.be/watch?v=9ZdWe5VZRuo [Kewde - BasicSwap: Increasing Monero’s Resiliency using BasicSwap DEX] https://www.monerotalk.live/104 [Creating L2 & Proof of Stake Infrastructure on Cryptonote w/ Kee Jefferys (Oxen)]
BTC/ETH sidechains would be silly but there are valid uses of sidechains. Currently all transactions are stored on the blockchain forever, but do you really need to have 600 coffees a year forever on the blockchain for a significant portion of the Monero community? It makes much more sense to farm that out to a Monero Mimble-Wimble sidechain. Since this side chain specialises in small purchases, the consensus rule might also be speedier, so you get all the benefits of the lightning network with none of the drawbacks. Similarly, having a sidechain for scripted actions like automatic subscription payments (or at least payment reminders) would be nice, or more complex multisig and escrow wallets. If done correctly, all this could be done without touching the main Monero chain so Monero can focus on being real cash and the sidechains can do the extras and test out experimental features that may come to Monero eventually.
ease of fiat by having legal entity compliant sidechains
rofl
Good work. Thx. Sorry, but KYC on a sidechain… that was a funny thought.
So… your personal conclusion is that you want some scripting. I asume then you would be happy with any solution other than Hashrate Escrows ?
Don’t laugh. Gold can be purchased in many jurisdictions without KYC, so having a tokenized gold sidechain that may be exchanged with real gold at participating local dealers might actually qualify as a legal fiat on/off ramp. If gold is KYCed in your region, just then use a silver, copper, or even industrial grade manure or toilet paper side chain token. You can’t KYC all commodities. Imagine the field day the press would having on any politician that required KYC for trading fiat for bull manure (BS) and vice versa. The jokes just write themselves.
BTC and ETH sidechains on Monero, imagine the possibilities…of being able to actually send transactions.
