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Offshift – Solving the Privacy Problem in DeFi
Have you ever wondered how the world will look like when blockchain technologies will be adopted by the masses? Sure, the world will be fairer. Central banks will lose their power to print money freely. The power will be in the hands of the people because everyone is equal on the Ethereum blockchain. But there is one big problem left for us to solve: Privacy.
As you all know, most public blockchains are transparent, which means that anyone can see and verify any transaction that has happened in the past. This is okay at first because the actor’s identity is hidden by an anonymous public address. But is the address really anonymous for everyone? Even today governments and secret services can connect addresses to their actual owner. They work together with centralized exchanges, who are obliged to integrate KYC and AML services. So, centralized exchanges know the identity of their customer and this makes it easy to identify bad actors in the network, who used the exchange in the past.
If we don’t solve this privacy problem, we will soon have to deal with governments that are able to track every single transaction that we do on public blockchains.
How Offshift works
Offshift is a privacy solution on the Ethereum blockchain. It is specifically designed for anonymous token transfers. While using Offshift, nobody will be able to track your transactions anymore. Offshift works in two ways:
The XFT Token is an ERC-20 token that gives users the right to switch from the public Ethereum blockchain to the private Offshift solution. Therefore it’s a utility token that derives its value from the usage of the platform. XFT is not private though as it is an ERC-20 token.
Zk-Assets are at the heart of the Offshift ecosystem. They use the zkERC20 standard and are completely private. Nobody will be able to track any transaction anymore. zkERC20 tokens use zero-knowledge proofs, a cryptographic way to transfer tokens without revealing the participant‘s identity and transaction amount of the transfer.
Examples for zk-Assets
Zk-Assets could potentially include zkUSD, zkETH, zkBTC, or any other asset on and off the blockchain. Users can freely choose any asset and mint the corresponding amount of zk-Assets. It is game theoretically secured that zk-Assets always peg to the value of its underlying asset.
Zk-Assets can be minted by burning XFT tokens. This is made possible by a two-way bridge, which connects the public and private side of the Offshift platform. If users decide to bring newly minted zk-Assets back to the Ethereum blockchain, there will be a bridge fee to eliminate arbitrage opportunities. After seven days, the bridge fee will be zero.
This means that users can freely switch from transparency to privacy in a matter of seconds. Zero-knowledge proofs are coming to the Ethereum blockchain, allowing anyone to opt-out of the transparent nature of the Ethereum blockchain. Offshift will give users back their privacy.
There is a lot of demand for privacy solutions in the crypto- and DeFi industry. Many users only joined this industry for the sake of their privacy. As Offshift is one of the first privacy solutions for the Ethereum blockchain it can be expected that a significant portion of the DeFi community will be willing to use Offshift services. But it doesn’t stop there. DeFi is the fastest growing industry in the world and countless users join this space every day. This will also bring more users to the Offshift ecosystem. Offshift will grow together with the DeFi industry.
XFT has a total supply of 10 million tokens, which are distributed in the following way:
- 15 % Tokensale 1,500,000 XFT
- 5 % Liquidity 500,000 XFT
- 20 % Team 2,000,000 XFT
- 22.5 % Marketing/Ecosystem 2,250,000 XFT
- 22.5 % Development 2,250,000 XFT
- 15 % Staking 1,500,000 XFT
The initial presale price was around $0.15, and the listing price was $0.2. Currently XFT is traded for $1.6, which signals great demand for privacy solutions.
Offshift solves one of the fundamental problems in the crypto space: Privacy. Governments can track the identity of actors on the blockchain while working with centralized exchanges. While there is currently no way of avoiding centralized exchanges when you want to buy cryptocurrencies with FIAT, you are now able to opt-out differently. Just use zkAssets to be invisible on the blockchain.
Even the native token XFT seems like it could capture value as Offshift grows. People will need to buy XFT to participate in the Offshift ecosystem. This ensures demand for the token as the value of the token is highly tied to the usage of the platform.
All information presented above is for educational purposes only and should not be taken as investment advice.