tbDEX - The liquidity protocol of #Web5
tbDEX bridges the worlds of legacy money and digital money, by providing a framework for establishing social trust.
Here 👇 is how it’s done 🧵
tbDEX bridges the worlds of legacy money and digital money, by providing a framework for establishing social trust.
Here 👇 is how it’s done 🧵
1. No Atomic Swaps
But first, let me tell you the bad news: there will be no atomic swaps.
This sounds terrible but the reality is that no interface with the fiat monetary system can be trustless.
The endpoints on fiat rails will always be subject to laws and regulations.
But first, let me tell you the bad news: there will be no atomic swaps.
This sounds terrible but the reality is that no interface with the fiat monetary system can be trustless.
The endpoints on fiat rails will always be subject to laws and regulations.
2. Negotiating trust
Not being trustless → requires trust
How is such trust built between strangers without any centralized entity?
With Decentralized Identifiers and Verifiable Credentials!
Not being trustless → requires trust
How is such trust built between strangers without any centralized entity?
With Decentralized Identifiers and Verifiable Credentials!
Don’t know what are these?
I got you covered!
I got you covered!
https://twitter.com/pippellia/status/1575409128125644800
3. Here is an example of trust negotiation
Alice wants to buy a car with her Bitcoins.
She wants to know who the seller is and whether the car has a valid license plate.
Alice wants to buy a car with her Bitcoins.
She wants to know who the seller is and whether the car has a valid license plate.
4. The seller is not comfortable sharing who he is.
Instead, he presents Alice with 2 credentials that prove:
- he is the owner of the car
- the car has a valid license plate
Alice finds this information enough to carry on with the exchange.
Instead, he presents Alice with 2 credentials that prove:
- he is the owner of the car
- the car has a valid license plate
Alice finds this information enough to carry on with the exchange.
5. Quoting directly from the tbDEX whitepaper
“In its most abstract form, [tbDEX] it is an extensible messaging protocol with the ability to form distributed trust relationships as a core design facet."
“In its most abstract form, [tbDEX] it is an extensible messaging protocol with the ability to form distributed trust relationships as a core design facet."
6. "It would violate the principle of trying to achieve the maximum amount of decentralization if the negotiation of trust was dictated at the protocol layer.”
7. Knowing what the tbDEX protocol is set to achieve,
let’s take a look at How it actually works step by step.
let’s take a look at How it actually works step by step.
8. Discover the counterparties
For a wallet to initiate an exchange using tbDEX, it must be aware of the DIDs of potential counterparties.
This can be done automatically or manually, but the final choice of who to include is always up to the user.
For a wallet to initiate an exchange using tbDEX, it must be aware of the DIDs of potential counterparties.
This can be done automatically or manually, but the final choice of who to include is always up to the user.
9. Initiating a Transaction
The user's wallet initiates a transaction using parameters specified by the user, for example:
"exchange 100 USD for the corresponding units of crypto XYZ"
The user's wallet initiates a transaction using parameters specified by the user, for example:
"exchange 100 USD for the corresponding units of crypto XYZ"
10. Sending the Requests
The user's wallet sends the request to all previously listed counterparties.
The user's wallet sends the request to all previously listed counterparties.
11. Receiving BIDs
Each of the counterparties provides one or more BIDs for the request.
As we learned with the example of Alice, the BIDs might ask for particular credentials.
Each of the counterparties provides one or more BIDs for the request.
As we learned with the example of Alice, the BIDs might ask for particular credentials.
12. Selecting the best offer
The user selects the best offer (deciding to disclose the credentials required, if any) and the transaction is settled.
Simple, isn't it?
The user selects the best offer (deciding to disclose the credentials required, if any) and the transaction is settled.
Simple, isn't it?
That's a wrap!
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1. Follow me @pippellia for more content about #Web5
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If you enjoyed this thread:
1. Follow me @pippellia for more content about #Web5
2. RT the tweet below to share this thread with your audience
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