While the growth of the cryptocurrency space has been a matter of concern to some, the truth is several next-generation cryptocurrency platforms have cropped up recently.
These platforms address current and pertinent issues that previous legacy cryptocurrency, blockchain, and legacy platforms could not since their inception.
One of those platforms is the Syscoin LUX platform.
They recently launched and include support for both fungible tokens and non-fungible ones (NFTs) as well.
We were intrigued by their recent partnership with Blockchain Foundry; the developers of the Syscoin core platform.
So, we reached out to Jag Sidhu, CTO Blockchain Foundry and Developer of Syscoin to find out more.
Here is what he had to say.
Jag Sidhu, CTO Blockchain Foundry and Developer of Syscoin
E-Crypto News:
Congratulations on the launch of your platform! What’s next for Syscoin Lux?
Now we focus on productizing Syscoin in multiple fronts both through the foundation members as well as blockchain foundry to enable utility on the platform as well as providing convenient services for ease of use and leveraging its toolset.
On research side we now start to dig into details on implementing our NEVM solution which is a revolutionary re-think of a world financial computation engine using blockchain and zero-knowledge-proofs (Here is a Medium piece on future plans)
E-Crypto News:
How exactly does the new platform work?
It is very closely and purposefully tied to the Bitcoin code base, it has been extensively designed to either be backwards compatible to Bitcoin but also adapt the code base in ways that do not go against the policies set aside by the hundred if not thousands of engineers who contribute to Bitcoin daily.
We created an asset platform that can support a generalized framework for tokenization including fungible, non-fungible with abilities to enable business-rulesets offchains for such things as compliance and instant redemption.
The token platform is intuitive in that its one token model but it supports both fungible and non-fungible through the same asset.
For security we are merge-mined with Bitcoin, providing a green and secure mechanism to offer a stable network for the enterprise and retail users on the platform. Bitcoin miners contribute no extra energy to mine Syscoin at the same time.
E-Crypto News:
What are the opportunities that Syscoin Lux provides to users of its platform?
Business concepts including security tokens with compliance settled on public blockchains (for the first time), any NFT’s related to assets (fractional or not) and fungible tokens thought of as loyalty or currency.
Fungible tokens may take advantage of the notary for advanced loyalty redemption services such as onchain enforced campaign management.
E-Crypto News:
Please, can you tell us more about your partnership with Blockchain Foundry?
Blockchain Foundry is the company that producticizes Syscoin through a roadmap that is heavily invested and geared towards the development of use-cases using Syscoin.
Our first few years we data-mined and collected enterprise feedback as to what is required from an ideal token platform and we built it up from ground up to where it is now serving the use-cases that best could be generalized into useful features without adding costs and security issues to other users on the platform.
E-Crypto News:
How can the Syscoin platform be the platform for both Fungible and Non-Fungible Tokens? Please, can you explain further about this feature?
The assets are represented as UTXO coins which like Bitcoin and Syscoin are inherently fungible except that the UTXO once spent usually gets passed along to a new UTXO mapped to a transaction ID and a transaction output number representing the new UTXO.
In our case to attach persistent non-fungible properties we add a 64-bit integer field to denote the NFT ID that is to live alongside that UTXO irrespective of where and how it is transferred throughout its lifecycle as UTXO’s are sent along in Bitcoin and Syscoin today.
The Asset (Syscoin Platform Token or SPT for short) is created with some supply defined and the issuer then can mint coins representing NFT’s or FT’s, by simply defining an NFT ID along with the minting process the issuer can opt to create an NFT.
By specifying the amount associated with the NFT the issuer creates a fractional NFT that can be split up based on the precision denomination set in the SPT upon creation.
Creating an SPT also costs 1 SYS which is provably burned and issuing an NFT or FT simply costs network fees paid to miners which are negligible.
For example if I create an SPT with 8 digit precision just like Bitcoin/Syscoin, and issue an NFT of 1 COIN I actually can have 100 million different divisible UTXO’s of that NFT which may represent separate objects.
The issuer may assign data representing the NFT to each divisible fraction of that NFT or may have one data set governing all fractions of that NFT, its very flexible like a smart contract but without requiring the need for complex smart contract development which may cause risk if the contract has a bug.
E-Crypto News:
Please, can you tell us more about Syscoin Platform Tokens (SPTs)?
The tokens are a generalized framework for the main use-cases of fungible and non-fungible tokens where the only thing the blockchain really knows is the settlement of UTXOs and also potentially enforcing a signature of the notary if notary is assigned.
The rest of the use-cases can be extrapolated through the general mechanism governing the use of working with UTXOs in the Bitcoin/Syscoin standard policy.
Doing so simplifies the system and makes the system much cheaper in terms of gas costs and reduced complexities building apps leveraging the framework.
E-Crypto News:
How does the UTXO consensus system work?
Since we migrated to the UTXO model away from the account model it actually simplified the design considerably.
The input UTXOs of a transaction are added up in terms of amounts in a map keyed by the asset ID, and the outputs UTXOs are added up, the inputs and outputs must match.
Since the fees are paid in gas (SYS) there are no other complexities needed. Making it simple was a design philosophy so that adoption may occur through an easy to audit and integrate solution.
It fits well within the existing Bitcoin/Syscoin design and leverages all of the optimizations and security features that have been built-up over the years since genesis.
This design lets us atomically transfer multiple assets in one transaction because inputs/outputs of multiple assets are allowed to be transferred at once.
This will enable a variety of use-cases like efficient DEX’s as well as asset-based payment channels like Lightning Networks but for assets including fungible and non-fungible tokens.
Paying in one token and atomically receiving another for payment is an exciting proposition done at scale without hidden costs, middlemen or chances of fraud as the system scales up.
E-Crypto News:
How do Syscoin Platform Tokens (SPTs) function in line with Bitcoin-Core logic?
They leverage all of the existing UTXO logic with the addition of an asset ID and a possible field for an NFT ID.
The unit and functional tests which are extensive with great code coverage has been actively been improved over the years in both Bitcoin and Syscoin communities and we leverage all of that infrastructure applying the security and efficiencies of the UTXO model to the generalized token framework of SPTs.
E-Crypto News:
Please, can you tell us more about Syscoin Lux’s Notary feature? What is it? How does it work? What does it do? What are the benefits to users of the Syscoin Lux platform?
-
-
Its a really simple yet effective feature in Github
-
The wallets and SDK’s conform to the standard, but the process is an SPT would opt-in by setting the required notary fields including address and a URL endpoint which is running some notary software which is responsible for getting a raw transaction and doing whatever it needs with it finally signing a signature from the address defined in the SPT by the issuer.
-
Upon a user transacting with the system, the wallet would sign, reach out to the notary to gain the notary signature, then locally sign again to send to the network.
-
An interesting feature that emerges is that the notary can enforce wallet-to-wallet rules required by regulations under travel and money rules yet at the same time it may not actually classify as a custodian.
We feel that payments in crypto will likely require wallet-to-wallet safeguards for AML purposes in the near future and so custodian services will likely gate these users by onboarding them with KYC and allowing them to transact with other onboarded users.
Custody services not only are responsible for the users money but also require stringent licensing which vastly varies on jurisdiction, making it very hard to penetrate payments globally.
The notary applies the same benefits by allowing transactions to be safe-gaurded for AML reasons but potentially not being classified as a custody solution. For this we are actively working with securities lawyers to potentially get a no-action clause on the platform from the SEC.
The nuance that we believe makes it the same as custodial providers yet not actually a custody lies in the definitions of custody which are outlined as having control of an asset, and if that control is lost/stolen/confiscated then the asset itself is determined at risk of loss of control from the custody provider.
In the case of notary, the SPT owner can modify the notary should the notary keys become lost and so the business operating the notary can help “unstuck” their service by having an independent third-party “reset” the system by changing the notary key required to validate the transactions.
This would make it very easy to penetrate globally having one service act as the guardian of rulesets which we intend to be productive at Blockchain Foundry but as always is open to competition as we are building into an open source platform.
We feel since we spent considerable time researching and developing the features on Syscoin we would have a significant advantage entering and penetrating the market but if competition were to arise we would welcome it as a development for the ecosystem so you can call it a win-win under the token economy principles.
-
E-Crypto News:
What are the developer tools made available for smooth and seamless integration into applications?
We have built SDK’s such as the javascript SDK (examples repo here
We are building easy to use web wallets + chrome extensions and connection to hardware wallets through web-usb for web connected hardware wallet interfaces.
We will likely build an NFT SDK to make it easy to manage NFT’s and their use-cases
We are also working with multiple clients looking to build into the tech stack and they will have their own enabling factors on the platform.
E-Crypto News:
How can developers take advantage of the opportunities made available by the Syscoin Lux Foundation?
They can monetize their own ideas by developing and taking ideas related to tokens to market with the unique feature-set not found in other platforms.
E-Crypto News:
What is the Syscoin Lux backstory?
We have developed alot of world-first innovations since 2013 when we first started with Syscoin. However through our learnings along with enterprise clients we have streamlined those developments into an abstract solution that can generally solve a lot of the problems and use the blockchain most effectively without running into scale issues as users start to use it.
We have parameterized the system to sustain global levels of scale, this is only possible by analyzing and applying learnings from over 8 years experience as a professional in the industry by knowing what does or doesn’t belong on a DLT.
By focusing on providing a base layer that can provide generalized token settlements, and focusing on transactionality offchain we will be able to scale globally.
Of Course with offchain payments particularly something like Lightning Networks trades off a little bit of liveness for the sake of scale, so we did provide an onchain scaling mechanism called ZDAG for point-of-sale probabilistic guarantees of settlements which is applied at the transactional level in Syscoin.
The combination of offchain scale (payment channels) with onchain settlements and scale (ZDAG) create an intuitive solution that can scale generally without the same adoption bottlenecks facing Bitcoin.
E-Crypto News:
What are your thoughts on the explosion of the cryptocurrency space?
We are at the peak value phase where the markets have extracted the most they can out of our environment to maximize shareholder values globally.
We now must re-invent ourselves by taking the next step towards how we perceive value and how we interact with information with value.
Blockchain naturally removes frictions amongst people, places or things interacting with information which may also have monetary implications.
The aspects of money intersect with this re-invention because the settlement of value and settlement of money in a trade scenario are synergistic as well as the rational economic incentives which are layered in to secure such a system also involve some sort of money that is interacting in the system.
As the market realizes from multiple tangents that Blockchain disrupts any sort of value settlement or transfer, there is tremendous network effect stemming from multiple industries creating a sort of mega unicorn through a feedback loop that centers around money itself.
E-Crypto News:
How did you get started with cryptocurrencies and their allied technologies?
Early days we realized the direction we were headed as a society, from traditional markets to crypto currencies wasn’t too big of a jump, however some of us having computer science backgrounds let us naturally get involved and realize the implications of the decentralized aspects of settling value through consensus.
Political, architectural and logical decentralization concepts led us to distinguish our place in the industry by picking and choosing elements of our design that match our philosophy of our world-view as well as the elements of computer science dealing with computational scale, network bandwidth efficiencies and practical economic incentives promoting rational behaviour benefiting everyone involved.
E-Crypto News:
What are your thoughts on the emergence of cryptocurrency ecosystems such as Ethereum, Binance Smart Chain, Polkadot, Solana and Syscoin Lux?
I have covered most of this in my medium article, however I would say that all chains except Syscoin and Ethereum are focused on Layer 1 scale potentially sacrificing security aspects of settling value.
This fundamentally is mis-aligned with our vision and we are preserving the gold-standard in our design by thinking about secure settlement first and foremost and then ideas to scale after that.
Layer 2 protocols were borne out of this necessity as Ethereum L1 has hit fee-market issues, and they naturally evolved to understand that L2 protocols are the only way forward.
The key aspects with the advent of zero-knowledge proofs which are a holy grail invention almost as big as blockchain itself is that data availability is the tradeoff in all of the designs around L2.
We have a unique take on the data availability problem as documented in our paper. Today Syscoin LUX can deal with that availability by having users make payments or trades on payment channels and using onchain ZDAG or settling onchain only when needed.
Tomorrow we will introduce NEVM and L2 zkRollups with data availability tradeoffs for enterprises depending on use-cases. For example some may want complete control of the data for compliance reasons and others may want to use onchain data storage for a completely decentralized L2 solution at the cost of slightly higher fees.
The difference in scaling of the two options varies and you can see it near the bottom of the article but the aggregated benefits will allow the system to generally scale to serve global IoT, distributed computation and payments for the masses with cost efficiency and security in mind.
E-Crypto News:
Where do you see the cryptocurrency space in the next decade?
Likely everything you use that has any type of circuit board will likely have some tie-in to either a loyalty crypto or some public crypto for payments, rewards or even Digital Identity rooted to a L2 on something like the Syscoin blockchain.
Our lives even though we may not know it will be managed by self-sovereign access keys to unlock the users information and value.
E-Crypto News:
How can cryptocurrencies and their allied technologies solve humanity’s problems?
By creating efficiencies and unlocking vastly new possibilities that were never thought possible prior to blockchain. Enforcing non-fraudulent monetary policies will allow us to prosper further and exponentially speed up our understanding of our surroundings, our universe and how we can live better lives in unison.
E-Crypto News:
Please, can you tell us more about the Z-DAG protocol?
-
-
Whitepaper:
-
You can read about the independent performance report here
-
Its an onchain payment scaling solution but in the big picture think of it as an onchain fallback for payments once most users are transacting on payment channels or L2 rollups.
-
E-Crypto News:
What are the effect of your partnerships with mainstream technology heavyweights?
Partners are very important for growth from grass roots (basically where we are today) to mainstream accepted and adopted.
As we bring the software into production aka mainnet with Lux now and NEVM feature later we will have completed our blockchain technical roadmap and then focus solely on the business relations, marketing and connecting to enterprises for productizing the platform.
E-Crypto News:
If you had three wishes and genie that could make them come true, what would they be for the cryptocurrency space?
To not put people and companies on a pedestal, not one of those offer any sort of general truth that can be applied to this technology because we are still laying the road for where we will ultimately go as a result of the blockchain.
The only thing I would take away from influencers is that we are building something and headed in the right direction together.
We should all embrace this fact that we are building something that will be the solution to alot of our current economic and socio-economic world problems.
If we all embrace working together we will end tribalism that has been a stigma since we were hunter/gatherers and we will be much more effective to decrease the timeline to bring this technology to production quality.
