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Blockchain Tokenization

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Page 1
Let’s talk
Tokenization
DEVOXX MOROCCO
2017BADR
BELLAJ
When developers get interested in Money

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What’s the
Blockchain

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Failure
Ecash
‘1983-1998’
E-gold
‘1996- 2007’
Liberty Reserve
‘2006-2013’
Success
Bit Gold
Success
Bitcoin
‘Since 2008’
De...

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Blockchain Tokenization

  1. 1. Page 1 Let’s talk Tokenization DEVOXX MOROCCO 2017BADR BELLAJ When developers get interested in Money
  2. 2. What’s the Blockchain
  3. 3. Failure Ecash ‘1983-1998’ E-gold ‘1996- 2007’ Liberty Reserve ‘2006-2013’ Success Bit Gold Success Bitcoin ‘Since 2008’ Designed in 98 Failure Failure Succes Succes A SOLUTION FOR A BIG PROBLEM
  4. 4. Simply put, the blockchain is a machine for creating trust. “ “
  5. 5. © 2017 MCHAIN A SECURE AND DISTRIBUTED LEDGER Secure Uses cryptography to create transactions that are impervious to fraud and establishes a shared truth Immutable The database is “write once” so it is an immutable record of every transaction that occurs. Distributed There are many replicas of the blockchain database. In fact, the more replicas there are the more authentic it becomes. Transparent : Data is stored in clear, available to anybody
  6. 6. Alice sends Bob $70 Ahmed sends Farid $15 Smart Contract Secured ledger
  7. 7. SMART CONTRACT: autonomous programs
  8. 8. INTERBANK SETTLEMENT DEBIT CREDIT Balance 100$ Transfer 100$ DEBIT CREDIT Balance 200$ Balance 100$Transfer 100$ DEBIT BANK A’s ACCOUNT 100$ CREDIT BANK B’s ACCOUNT 100$ TRANSACTION BA HOW IT WORKS?
  9. 9. N5545 N5546 Block validated by the network and added into the blockchain (updated) TX+Signature Transaction cryptographically signed and sent to the network Nodes ADDRESS: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN ANNONYME Transaction is complete N5547 Block processed(Mining Process)Verified and included in a block (timewindow) TXj+Signature TXi+Signature N5547 HOW IT WORKS?
  10. 10. © 2017 MCHAIN ICO : Initial coin offering
  11. 11. © 2017 MCHAIN WHAT IS AN ICO Initial Coin Offering (ICO)' An unregulated means by which funds are raised for a new cryptocurrency venture. In an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender or other cryptocurrencies, but usually for Bitcoin.
  12. 12. © 2017 MCHAIN SESAM In 2016, 64 ICOs gathered over $103 mln. (CoinDesk) $257 Million: Filecoin
  13. 13. © 2017 MCHAIN A NEW TREND
  14. 14. © 2017 MCHAIN How to run an ICO HOW TO RUN AN ICO
  15. 15. © 2017 MCHAIN AN IDEA WITH A TOKEN Create the need
  16. 16. © 2017 MCHAIN HOW TO RUN AN ICO IDEA White paper Campaign & advisors Pre-sale ICO Token List ing in the exchange markets ICO tracker : Tokenmarket.net
  17. 17. © 2017 MCHAIN PLATFORM TO RUN ICO • ICONOMI • NXT • Waves • COUNTERPARTY • ETHEREUM • NEO • Bitshares • UBIQ
  18. 18. © 2017 MCHAIN ICO ON ETHEREUM ERC-20 standard: developed in late 2015, de-facto standard for fungible assets. Many enterprises decided to raise funds via Initial Coin Offering (ICO): Users deposit money to a dedicated web-service or Ether to a book building contract; • The total investment is converted to a fixed number of tokens; • A smart contract is issued, where each user gets tokens according to his investment share.
  19. 19. © 2017 MCHAIN ICO PARAMETERS Token details (name,decimals,..) Total Supply Hard Cap (ETH,BC.) Soft Cap
  20. 20. © 2017 MCHAIN TOKEN SALE STRUCTURE
  21. 21. © 2017 MCHAIN
  22. 22. © 2017 MCHAIN Security & Risks
  23. 23. © 2017 MCHAIN Security Security of the ICO process and contract maintenance is a vital issue. Threats: Token loss due to contract misbehavior; Availability loss: external contracts (say, exchanges) can not interact with the token contract due to its errors. Vulnerabilities: Insecure code; Error-prone interface.
  24. 24. © 2017 MCHAIN The Decentralized Autonomous Organization 2016 Biggest crowdfunding ever : The DAO was crowdfunded via a token sale in May 2016. When Ether was trading at $20, the total Ether from The DAO was worth over $250 million (from more than 11,000 investors). Now its 330 (4B$). Hacker gained control of 3.6 million Ether, around a third of the 11.5 million Ether.
  25. 25. © 2017 MCHAIN DAO HACKED!! The code written for The DAO had multiple bugs, and the recursive call exploit was one of them.
  26. 26. © 2017 MCHAIN ETHERPARTY BREACH: ANOTHER ETHEREUM ICO GETS HACKED
  27. 27. © 2017 MCHAIN Parity vulnerability 1 The wallet exposed a function: // constructor - just pass on the owner array to the multiowned and // the limit to daylimit function initWallet(address[] _owners, uint _required, uint _daylimit) { initDaylimit(_daylimit); initMultiowned(_owners, _required); } which was in charge of initializing the wallet owners. However, the author forgot to include a check to see if the wallet had already been initialized, thus allowing anybody to call this function and completely overwrite the owners[] array, giving themselves full access to the wallet.
  28. 28. © 2017 MCHAIN Parity vulerability 2 The wallet exposed a function: An unwitting user took control of this library contract by calling the initWallet function on the library contract, which gave him ownership of the library contract as it had not been initialized (since it was a library contract) and the variable only_uninitialized had not been set. The user then suicided self-destructed it, obliterating functionality for ~500 multi-sig wallets and effectively, irreversibly freezing ~$150M. A hard fork would be required to restore the contract and/or return funds.
  29. 29. © 2017 MCHAIN Next is Assets tokenization Tokenization is the process of converting rights to an asset into a digital token on a blockchain. There is great interest by financial intermediaries and technologists around the world in figuring out how to move real-world assets onto blockchains to gain the advantages of Bitcoin while keeping the characteristics of the asset. • Transfers of Ownership vs. Transfer of Limited Rights (SMART CONTRACT) • The Key Legal Issue: Ensuring Token Consistency • Response to the need for trust in intermediaries, poor infrastructure integration, and the speed of settlements – are in third place.
  30. 30. Q&A

Editor's Notes

  • Hard cap = not accepting any further contribution once the cap is reached
    Soft cap = minimum cap to reach in order to consider the ICO as successful, otherwise the investors can withdraw their investments.
    Total supply
    Currency accepted : ETH, BTC
  • The Decentralized Autonomous Organization (known as The DAO) was meant to operate like a venture capital fund for the crypto and decentralized space. The lack of a centralized authority reduced costs and in theory provides more control and access to the investors.
    few members of the Ethereum community announced the inception of The DAO, which was also known as Genesis DAO. It was built as a smart contract on the Ethereum blockchain. The coding framework was developed open source by the Slock.it team but it was deployed under "The DAO" name by members of the Ethereum community.

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