This article describes how and why OTN can be of any use to a person whether he is a novice or a veteran of a modern crypto-rush
Number of individuals, which recognize crypto as a possible mean of diversification of their funds, is constantly growing. The main reason to this, in our opinion, lies in the numbers of possible returns, or rather the influence those have on mavericks of all sorts and sizes.
For those impressed by the numbers: there are two general options to start investing in crypto. Please remember, trading and investing is a responsible decision one should make at his/her own risk. Seriously.
Crypto Investing from the Storage-related Point of View
- Simple option. You can open an account with an intermediary. The latter, most often, is a crypto-exchange. It usually uses a convenient interface in a form of a wallet app; sometimes an exchange doesn’t even provide that you have to be satisfied only with a complex interface of such exchange. Using this interface, you can quickly buy, sell and exchange crypto-currencies, but you will only have one username and password, with which you can access all available crypto-currencies. All operations will pass very quickly for sure. Nevertheless, not all intermediaries are equally reliable! Already, there is a massive collection of headlines, which can be expressed by the following formula:
Exchange X is Shutdown by the Authorities Y amid dissapearence of Z amount of BTC/ETH/OTN.
One thing’s certain: you cannot reliably say how securely your funds are stored inside these exchanges, and what is the probability of their sudden disappearance, don’t you?
2. Complicated option — cold storage; in this case, you get maximum security for the fund-storage puposes. If you independently provided a secure storage of your private key — no one in the world can use your funds. But you have to generate key pairs for each new network and come up with a way to store them. In addition, you will have to use a variety of (often inconvenient) user-interfaces to manage your accounts. And if you want to exchange one crypto-currency for another — you still have to use the services of an intermediary in the form of an exchange and trust your funds to this service. Most likely, the input and output transactions will take some considerable time.
OTN’s Solution for Storage
Open Trading Network allows you to combine the merits of the both options mentioned above. A user will receive a simple and fast way for transferring and exchanging crypto-currency, while provided with the security of cold storage. And all this is combined in a single convenient interface, using only one pair of “login” and “password.” Nobody can access your funds without knowing your private key. And the OTN DEX cannot disappear if there is at least one operating node of our blockchain.
In our OTN network, there will be more convenient analogues of existing crypto-currencies. Instead of BTC there will be OTN.BTC, instead of ETH — OTN.ETH, etc. In order to get OTN.% ANYCRYPTO% you will need to tokenize the external crypto currency.
The process of tokenization in our network will be provided and maintained by the gateways. They are centralized entities that can monitor external networks, interact with our network and have the API with which the wallet operates. It accepts an external crypto-currency and provides in return an internal analogue. At the same time, it ensures the safety of external funds until they are requested for withdrawal.
But the tricky thing is that gateways like any other entity in the blockchain environment, may not be associated with us in any possible way; we do not control or own them. Unfortunately, we cannot 100% guarantee the safety of funds on the side of such gateway (this is partially fault of the blockchain concept of decentralization itself). And although we will provide a strict monitoring process when connecting new gateways, we cannot rely on 100% reliability of these blockchain elements. Nevertheless, we are planning to introduce a mandatory requirement for the gateway operation in form of a guarantee in the base currency of OTN, which the gateway will carry out in a smart contract. This smart contract will allow the gateway to work only within the amount equal to the guarantee provided. Thus, the tokenized assets will be provided in the base currency of the OTN blockchain. And even in the extreme cases such as disappearance of any of the gateways — the user will always be able to receive compensation for his asset in the form of OTN.
For a user, the tokenization process will be this
- The user selects a gateway in the OTN wallet to start tokenization procedure;
- Chooses a currency from the liest of available ones, which he wants to tokenize;
- The wallet receives the address of the external wallet from the chosen gateway, where the user needs to transfer the funds;
- The user makes the transfer in the external network (from any convenient wallet, exchange, etc.);
- After the required number of confirmations is complete, the gateway issues new amount of the tokenized asset (within the limits of the guarantee);
- Gateway performs token transfer to the user;
- The notification of sucessful transfer of funds from the gateway finishes the procedure.
If a user changes his mind for whatever reasons there are, he is always welcomed to try out the de-tokenization feature.
The exchange of tokens within the network will occur in a decentralized manner via a smart contract. In the wallet, you can create an order to exchange one token for another. Such order is recognized as transaction on the network and must be signed by the user. Afterwards, it’s added to a block, and the order is placed into the smart-contract funnel. And at the same time, matching procedure is being initialized. If a smart contract detects a counter order at the time of signing, the intial order is executed. On the OTN network, the blocks are signed at a predetermined periodicity, which is 2 seconds. Thus, if in the smart-contract funnel there is already a counter order for your exchange transaction — then it will take you approximately 2 seconds to exeute the order. Pretty quick, isn’t it? Especially considering that all operations are performed in a decentralized manner and do not depend on any particular node (exchange).