Decentralized Finance (DeFi) has undoubtedly changed the world. The ability to dabble in the financial system does not require any trust. It is automated by smart contracts under which the agreed-upon rules are executed without the involvement of any intermediaries and, thus, helps the whole ecosystem run efficiently. It requires no reset or sleep, and the coding is free from any commissions.
This has created a system where people can be involved in different financial and economic activities that benefit both sides. One party gets higher profits since no escrow service charges a fee, while the other party gets lower interest rates. However, this self-acting system of smart contracts has a significant weakness related to data verification.
False Prophets and Lying Oracles
The quality of smart contracts depends on the quality of data they contain. If the input is airtight and verified, the computer-coded agreements will be executed flawlessly. On the contrary, if the contract’s information is manipulative or false, this can cause many issues.
For example, let us consider a smart contract that allows Bob to take out a stable coin loan under the collateral of 10 ETH with a loan to value (LTV) ratio of 80%. Bob decides to take a loan with an LTV ratio of 50%. The ETH is deposited in the smart contract, and the required stable coins are released. As the interest rate keeps increasing and the ETH value fluctuates, Bob can continue using the loan until its LTV ratio reaches 80%. When the 80% mark is crossed, the contract will liquidate the held ETH and give the lender his due, while the remainder will be transferred back to Bob.
Contracts like this are a standard in the DeFi ecosystem, and there are hundreds of airtight agreements. The weakness in this whole endeavor stems from where the current ETH is being picked up. Most contracts rely on oracles or data providers to this end, and this is the chink in the metaphorical armor. What if the oracle data is not correct? The market value could be lower than reported in the contract, and Bob would suddenly find his ETH liquidated and lost forever.
HAPI: Blockchain Secure Oracle
HAPI is a cross-chain smart contract setup that combines data, machine learning, oracles, and Decentralized Autonomous Organization (DAO) to create a new ecosystem that deploys publically verified and reputable data providers to ensure that only the oracles with good track records that can prove the validity of their information are used in the crypto sphere.
Oracles are chosen via the voting process in the DAO, where participants select their preferred oracle’s data provider and decide on the winner based on the integrity of its data and morality.
Along with the accuracy of the provided data, the use of machine learning can identify any suspicious activity and block the action to create a secure environment where hackers and other malicious parties will not be able to siphon off coins and tokens. As a cross-chain system, HAPI can extend the anti-hacker services to different blockchains so that a self-acting, community-driven police force will be established to stamp out hacks in the crypto economy forever.
HAPI Use Cases
HAPI has three-pronged attack strategies that help stakeholders of any crypto activity to ensure their protection from any kind of evil that plagues the cryptocurrency movements today:
- DEXs: DEXs, oracles, and the HAPI smart contract will be able to identify wallet addresses known for transferring stolen tokens or even the suspicious ones. DEXs can take this data and block any transactions to nip hackers in the bud effectively.
- CEXs: While centralized exchanges may not have the smart contract capability to stop people from performing fraudulent activities, they can still help as the digital thieves will need an exchange to trade in their stolen tokens for money or other coins. The centralized CEXs will be able to identify incoming tokens’ wallet addresses and withhold the assets until the situation is resolved. This creates a significant deterrent.
- High-Risk Tokens: The smart token contracts that have not been audited can be highlighted, and traders will be warned of possible frauds and scams to prevent the steal of money.
HAPI’s SHO on DAO Maker
Supporting HAPI or not, this shouldn’t be the question. It`s more about: Are you happy with the current cybersecurity situation? Do you recognize the problems we face in crypto? Are you willing to fight against cybercrime? Well, HAPI won`t be the swiss knife for all the problems we have with smart contracts, exchanges, and DeFi – but it could be your first action to strengthen the crypto ecosystem. You can back HAPI by participating in its token sale.
There will be a public IDO on the platform of Poolz on the 10th of March, the participation whitelist is already open. Poolz is a decentralized cross-chain IDO platform, built on top of web 3.0 network.
Another public token offering will be on the platform of DAO Maker within its Strong Holder Offering (SHO) program. DAO Maker is a startup accelerator created by investment-veterans of the 2017 bull run. The 2018 funded company has backed and supported many projects during the bear market, like LTO Network, Elrond Network, and Orion Protocol. Notable customers of the startup forge are Avalanche, Injective Protocol, Seascape, NEM, Ecomi, Harmony Protocol, 2key Network, AnRkey X, Yield Protocol, VAIOT, My Neighbor Alice, OpenPredict, Dafi Protocol, Aluna, and many more.
The project HAPI is also supportet Key Opinion Leaders by Ivan on Tech and BoxMining.