One of the main cornerstones of the rise of blockchain as a potential substitute for the current financial system is the possibility to enable full privacy for everybody. As traditional banking institutions have central control of customers’ assets and money, they have the power to use it maliciously, which makes a digital and decentralized way to deal with money a necessity. To solve this issue, the Haven Protocol aims to be the leading platform when it comes to customer privacy, empowered by private-enhancing technology, and an off-shore banking work ethic.
Let’s talk in more detail about Haven Protocol and how it works.
How Does Haven Work?
Haven Protocol is a unique decentralized ecosystem where users have untraceable assets to exchange anonymously between different currencies and assets, with full privacy throughout all processes.
The idea is similar to an offshore bank, but without a banking entity behind it. By using Haven, anyone with a web3 wallet can exchange assets directly into it, with no need for third-party control or any sort of custody.
The idea is structured on Monero (XRM), which is an open-source PoW (Proof-of-Work) cryptocurrency based on the Cryptonote protocol, solely focused on fungibility and decentralization. That way, customers can have a world-class experience when it comes to privacy and anonymity.
The protocol has a range of synthetic fiat currencies and crypto assets to further potential portfolio diversification, so investors can expose themselves to more profitable opportunities. Users can choose to use whether xUSD, tic, or xGOLD for storing, exchanging, or trading in several different ways.
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All mechanisms behind the project are algorithmically fixed and fully decentralized, so there is not an entity, group, or even specific users to define exchange rates and other parameters. Haven remains a community-led project since its inception, not even holding any initial funding round or anything similar.
User funds are protected using private features such as Ring Signatures, Ring Confidential transactions (RingCT), and Stealth Addresses.
Ring signatures can be explained as a digital signature that can be performed by any member of a specific group of users, where each user has the keys. Hence, any crypto message signed using that specific ring signature is endorsed by a certain individual in that group.
RingCT is one of the unique features brought by Monero. It enables an utter experience on transactional privacy, as the value of funds being transferred is obfuscated, becoming sightless.
As the name suggests, Stealth Addresses is a reliable technology where users have their identities hidden, which prevents the public association of a transaction’s output with a specific wallet address.
Haven Native Token
The protocol issues its own token, called Haven (XHV), which is also based on Monero. So far, the maximum supply of XHV is about 18 million, and there is an estimated 13 million XHV in circulation across the blockchain market.
As the protocol aims to build a full-offshore part, once it happens the current circulating supply will fluctuate, as users will start minting and burning some of their funds (for example, XHV to xUSD).
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The project didn’t hold any ICO, employing alternative ways regarding funding. There is a 5% governance fee to cover expenses associated with essential infrastructure and marketing. These fees are collected over the mining of XHV.
The team of developers behind it works voluntarily, earning no actual payments. Their compensation comes in the form of XHV as well.
What is the Impact of the Platform?
Recently the crypto scene was shocked by the news about CENTRE, the issuer of USDC digital dollars, blacklisting a specific Ethereum address holding a huge $100k worth in digital assets, blocking a transaction.
Suddenly, people start questioning DAI as well. DAI is pegged to USDC as well, so DAI holders must keep their eyes wide open for potential issues regarding privacy and transaction blocking.
Although not long ago some investors and specialists were calling people seeking full decentralized models as “decentralization purists”, it is not hard to find out why the idea of getting rid of any sort of central or third party control whatsoever became a necessity in the crypto industry.
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Unfortunately, as long as a central entity has the control, any aspect can be controlled (including stopping or blocking funds) because the possibility to freeze assets is real.
Haven plays an important role in that scenario because unlike other stablecoins, X USD is completely anonymous and doesn’t let breaches for potential situations like that, as there is no way to seize users’ funds or block their addresses. The network didn’t even know if a specific user address or funds exist, as none of that information is available for them.
Haven Protocol is ideal for any crypto investors who want to store value without risking their privacy and control over personal funds. The development team behind the protocol is focusing on allowing full privacy and usability for everyday solutions involving cryptocurrencies. Once their structure becomes robust and mature enough, it will offer off-shore smart contracts technology to further privacy even more.