Offshift | August AMA — Answered!

August 20, 2020

The Team Responds in Part One of a Monthly Series

We appreciate all the great questions submitted last week for the Offshift August AMA, the first in what will become a monthly series. The team has worked hard to give thoughtful answers to as many questions as they could, which you’ll find below. If your question didn’t get answered, please come by the community Telegram and ask!

Hi Johnny is there any concern that staking rewards of 25,000 XFT (0.25%) per month for 60 months will not be large enough to incentivize initial bootstrap of Offshift’s zk system?

So staking rewards are meant to be funded solely by bridge fees, which are collected when a zkAsset crosses back over into XFT within seven days of being minted (there is no bridge fee for a zkAsset that stays on the private side longer than seven days). While it’s somewhat difficult to predict, we do anticipate bridge fees will be sufficient to fund staking rewards.

The allocation we set aside as a staking bootstrap is really for an added incentive on top of normal staking returns, meant to kind of grease the wheels of the economic model by incentivising early use of the shifting function and the movement of assets to the private side.

Also I’ve heard that zk tech is pretty expensive from a gas cost perspective, does Offshift have any solutions to reduce these costs in the long run?

Great question, yeah, the zkAsset contracts can be gas guzzlers with all the calculations involved. Obviously this is something we have to take into consideration, and it’s front-of-mind right now as gas costs hover near all-time highs.

We have more than one viable solution on the table and we’re working hard to determine which is most suitable according to our vision.

Regardless, the burden is on us to make sure our zkAssets provide more value than they cost to use, whether through staking, useability, or a number of other ways. We intend for them to, and that’s our primary focus as we develop the protocol.

Why is the team anonymous, and will it remain like that in the future?

To kind of paraphrase Ed Snowden, “who we are” doesn’t really matter. We feel like if that’s what people are focused on, they’re missing the point. The Offshift project isn’t about Johnny, Paul, or anyone else who works on it. It’s about empowering people to take their financial privacy into their own hands if they choose to. Frankly, it’s something much larger than any of us.

That being said, we realise our anonymity puts the burden on us to remove the need for trust wherever and whenever possible. We’ll continue to do that through things like the liquidity lock and team token lock (which we’ll deploy soon) whenever the community asks us to, and whenever we’re able.

How soon can this be deployed as a proof of concept to test net?

We aim to have shifting contracts deployed on Ethereum’s Rinkeby testnet before the end of the year. You can find our full development roadmap here.

If other projects come along to offer zkAssets as well will there be a way for ours to be interoperable?

As far as the Offshift protocol, the core functions like shifting and staking will only be usable with Offshift assets. Not knowing anything about the other projects it’s hard to say if our zkAssets would be interoperable with them.

What’s the minting process look like in practice for the zk-assets?

It’s a fairly straightforward burn/mint process really, with the addition of an oracle to peg price. Essentially a user sends our ERC-20 token, XFT, to a burn address, say the burn address associated with our BTC peg. This signals our zkBTC contract to mint tokens, of an equivalent value (in USD) to the XFT burned, to the address specified by the user.

It would be great to have a “private invoice” feature, so you can send someone a link and they can connect to web3 and pay with regular eth/usdc etc and you receive zk-eth anonymously without them having to understand what’s going on”

This is an interesting idea, although our zkAsssets can only be minted by burning XFT, so there would have to be an exchange of the eth or usdc for xft first, which could probably be automated via DEX. We’ll certainly consider it after the core development is finished, thanks!

Do you plan to have all contracts audited and tested before deployment to mainnet?

Yes we do.

From what I understand so far, the shifting process involves burning XFT, which will gradually reduce the supply of XFT. Is there any mechanism to regenerate the token supply? What would be done to prevent the XFT token supply from approaching zero, at which point the utility of shifting is lost?

So yeah, while XFT is burned to mint zkAssets and value is moved from the public side to the private side, the same can happen in reverse. Value can be moved from private to public by burning zkAssets and minting XFT.

Presumably in a scenario where nearly all the XFT were burned and all the value moved to the private side, the market would adequately incentivise, through price, moving value back to the public side by burning zkAssets and re-minting XFT.

Will you allow XFT holders to vote on which additional zkAssets should be available to mint?

Yes, we’re considering a decentralized governance system or voting system to determine which zkAssets will be created after the initial several we’ve announced.

We do want to kind of take our time with this though, there are a lot of factors to take into account to ensure the system is sustainable in the long term. This is something that will get a lot more of our attention after the basic protocol has been rolled out.

Are there any limits to what zkAssets can be created? It seems like every asset with an API price feed can be made into a zkAsset. Is that correct?

Right, essentially anything with an oracle price feed can be pegged as a zkAsset in the Offshift protocol. This is one of the things we’re most excited about, and we’ll talk a lot more about it in the coming months.

Do you have plans to allow people to shift their zkAssets to other chains or will everything remain on Ethereum?

This is something we’re exploring, yes.

As an anonymous team, would you consider open-sourcing development of the protocol, similar to the project and community Haven has built?

The application layer will stay proprietary at least during testnet, but yes, the contracts will be open source before launch.

How did this project get started? What inspired you & the team?

The driving principle behind the project has always been people’s right to privacy, both financial and otherwise. We saw the need for a simple tool that people can use to take control of their own financial privacy, and so we set out to create one.

What oracle solutions are you looking at and how far into talks are you?

We have an agreement in place with the leading oracle solution in the space. We’re currently working on integration and testing and will announce together after it’s complete.

How many team members do you have? And how many are core developers?

The team currently consists of Johnny (project lead), Paul (tech lead), Imhotep (community manager), two core developers (in addition to Paul) and a web & graphic designer.

Thanks again for your questions, and for taking the time to read our answers. We truly appreciate your interest in the Offshift project. Be sure to follow our official Twitter for the latest updates, and come by our community Telegram and say hi!

About Offshift

Offshift is leading private decentralized finance (PriFi) with the world’s first Private Derivatives Platform. It leverages zero-knowledge (zk) proofs and sources reliable, real-time price feeds from Chainlink’s decentralized oracle network to enable users to mint zkAssets, an unprecedented line of fully private synthetics. Offshift’s mostly anonymous team has developed a trusted reputation for their thorough privacy research, development and execution.

To learn more and get involved, visit the links below: