bZx distributes the margin negotiation protocol on Ethereum Mainnet


10 September 2018 11:13 PM

The news on implementation is accompanied by audit results, protocol changes and integration with another relayer service.

The team behind bZx (formerly b0x) recently announced the implementation of its integrated 0x protocol on the main Ethereum network. The bZx protocol was created for lending and trading services at decentralized non-custodial margins and is powered by the BZRX token.

The team believes its protocol is important because decentralized trade does not generally facilitate non-custodial margin trading. By allowing its protocol to be integrated into existing exchanges and relays, bZx allows margin traders to avoid centralized exchanges, which the authors of the white papers have the potential to compromise investor funds.

The deployment of the protocol follows an audit conducted by ZK Labs, an independent Ethereum auditor that includes some prominent voices in cryptospatism, such as Matthew Di Ferrante (Ethereum Foundation) and Nick Johnson (Ethereum Name Service). Di Ferrante concluded in the course of the audit that the bZx code "is generally well structured and appropriately subdivided into compartments". Furthermore, due to the protocol's intelligent OpenZeppelin contracts, the risk of bugs is lower.

However, Di Ferrante noted that one aspect of the contract can have an effect on the whole system. Specifically, the protocol specifies a network of contracts delegatecall that can freely write updates stored on a single proxy contract, so "an update to any component [of the proxy] can affect the status or the balances in the 39; whole protocol. " This detail leads to "an extremely accurate updating and maintenance process". The bZx team believes, however, that this vulnerability can be solved through private testing of updates before releasing them on the main network and the new protocol governance system.

The bZx protocol was tested using a single signature wallet, but is now governed through "a time-tested variant of the multi-signature Gnosis wallet ". Multi-signing, or multisig, simply means that a transaction requires the authorization of multiple keys. The bZx team noted that this configuration is similar to that of the project 0x, which also uses a multisig proxy mechanism.

Despite the security of the protocol, bZx acknowledges that two major rectification attacks (or attempts to distort computational randomness in favor of an attacker) may occur within the system: mining collusion and spot market manipulation. The former attack would involve bounty hunters, either in collusion with the miners or acting as miners to inflate the exponential moving average (EMA) and drain the guarantee fund (which is usually dispersed in creditors in the event that they lose their their funds). There are two ways to make it work:

"A miner with a large amount of power hash could censor the transactions of other bounty hunters and enter their 0 gwei transaction, thus claiming a large size without engaging in a war of gas (at the cost of giving up most of the transaction fees presented by competing bounty hunters) Alternatively, a miner with a large amount of hash power could be encouraged to play at EMA so that bounty hunters engaging in a gas war, thereby enriching the miner. "

The attack on the manipulation of the spot market would have led to an artificial increase in the number of liquidations on the network, so you can direct more taxes to bounty hunters , who are paid for their settlement services.

The team goes on to describe a combined EMA and an attack on the spot market where a bounty hunter could exploit their informational advantage about which loans would be liquidated, even if the "advantage" obtained from this information is "should be relatively low. "

A address these potential dangers, bZx has changed its protocol in four ways : do not pay more bounty hunters out or distribute gas refunds from the guarantee fund; withdraw the transaction fees of the bounty hunters from the guarantees offered by the traders; and requires that the trader's collateral is greater than 0.5 Ether. The team believes that these changes help to ensure "there is no way to profitably empty the guarantee fund".

Always accurate, bZx also said that although manipulation of the spot market would no longer be possible due to protocol changes, an EMA attack alone could still occur. For the bZx team, however, this "remaining attack vector is obscure and … highly unlikely."

In addition, the crew announced the integration of the protocol with Bamboo Relay. The bZx team has already partnered with five other relays: Shark Relay, Amadeus, Instex, STAR BIT and OpenRelay.

Unlike a centralized or decentralized cryptocurrency exchange, a relayer allows token holders to directly exchange their portfolios with one another. The relayer platform provides users with a way to find, position and fill their orders. Relayers do not hold any assets or execute any negotiations.

The bZx people expect more speakers to integrate their protocol in the future.

Source link