I teased this article on twitter a little while ago. It’s time to deliver:Offshore Storage — A recap
Some info is now outdated (this is just a recap), see below for our update!
For those who don’t yet know what Offshore Storage is all about, Offshore Storage is the basis of Haven Protocol. Haven’s Offshore Storage Protocol overcomes the biggest issue facing cryptocurrencies; market instability. Offshore Storage allows users to preserve the value of their coins, using Haven’s own ‘Mint and Burn’ concept, without the issues that plague current stable coins.
Users will be able to ‘burn’ an amount of Haven coins in return for a ‘native contract’ of the value of the burn in $USD terms at the time of the transaction. This keeps the value of your coins locked and stable — hence the name Offshore Storage. At a later date, the native contract can be exchanged back into Haven by minting the necessary coins with respect to the new trading price.
Later, if you want to exchange your $200 USD back into Haven, the number of coins minted are dependent on the Haven value at that time:If the price of Haven at the time of minting has moved to $2 USD, you will be returned 100 coins (100 [XHV] * $2 each = $200 USD).If the opposite occurs and the price halves to $0.50 then 400 coins will be minted and sent to you (400 [XHV] * $0.50 each = $200 USD). More information on the history here:
“Our vision and plan for Offshore Storage is far grander than anyone knows or has completely realised.”
Time to forget about native contracts. Start thinking about two coins on the Haven Protocol blockchain. Haven [XHV] and USD Haven [XHVD]. Our vision is a decentralised, crypto-backed version of Tether.
When you burn [XHV] you are converting [XHV] coins to [XHVD] coins, which represents ‘$USD worth of Haven’. Minting is converting these coins back into [XHV]. Just like Haven, [XHVD] coins are divisible and transferable. They inherit Haven’s privacy aspect with the added benefit of having a stable value.
Since the value of [XHVD] is guaranteed with Offshore Storage, there isn’t a difference between sending $10 [XHVD] ($10 USD worth of Haven) and sending $10 fiat. Other than the added privacy, that is.
Having [XHVD] in your Haven Wallet is akin to having USD in your Paypal/Venmo account with all the benefits of Haven Protocol — completely decentralised, low fees and private.
To expand on the [XHVD] Wallet concept, it gives the world access to a decentralised and free USD based ‘bank account’, away from prying eyes and centralised corporations. We envision Haven Wallets solely with a [XHVD] base, where the backing from Haven Protocol is obscured from the end user.
As adoption of cryptocurrencies increase, the market will favour a stable, private coin that does not expose the finances of corporate or private interests.
The problem with non-privacy coins is that they expose everyone’s account balances. Bank balances aren’t public information for a reason. No one really wants to expose their bank balance, regardless of how much or little they have.
I’ve personally talked to New Zealand based retailers about accepting Cryptocurrencies. Price stability and privacy are the only hurdles to their adoption — and Haven solves both.Further thoughts:
Thinking about the minting process, why mint back coins? With widespread adoption, you would never need to. Prior to that it would be in order to get the $USD value i.e [XHVD] -> [XHV] -> [BTC] -> stablecoin -> $USD. Although it is essential that this process works, if exchanges started using [XHVD] as a base pair for $USD fiat, you have a work around to minting coins in the first place, i.e. [XHVD] -> $USD. I suspect that with [XHVD]/$USD trading adoption, the amount of coins minted back into Haven reduces significantly and thus lowers the supply.Oracle:
For those who don’t know, an oracle is how a blockchain interacts with the wider internet i.e. an API. We will need to call an API in order to retrieve the current price of Haven. The current plan is that we are going to build this into the protocol itself. We will have strict rules in place to ensure that any tampering must be a cost of breaking said rules and thus everyone’s daemons will reject the invalid result.Technical Information:
We are planning to release technical information about how the Offshore and oracle processes will work. This will be in combination with the Q3 release of the Offshore test net.Contact us on twitter: