The collapse of Celsius, Voyager, 3Arrows, Alameda, Terra and others proved the counterparty risk inherent to custodians and underline the huge self custody opportunity
Today our self custody offer is restricted to our webapp and API. This is not enough. Self custody needs to be embedded into other applications, and accessible to everyone.
With the release of a new chain - Fusionchain - we are opening self custody primitives, letting any third-party developers create independent self custodial applications.
Integrating both Cosmwasm and Ethermint libraries, both Solidity and Rust developers can work on Fusionchain.
Introduction of “keyrings” allows user flexibility in holding key materials, reducing centralization by enabling simultaneous onboarding of multiple MPCs or broader KMS.
QRDO plays the central role in Fusionchain, serving various purposes in a $54 billion Cosmos ecosystem
”F**k Sam” - said a person whose funds are still trapped in FTX.
The line to get money out of FTX is no different than the line years earlier in front of Lehman - and it’s not unique to FTX. The collapse of Celsius, Voyager, 3Arrows, Alameda, Terra show we haven’t solved self custody yet.
When we started working on the next iteration of Qredochain we asked ourselves how we can embed Qredo’s self custody primitives into as many applications as possible, but noticed we were limited in what was possible.
Today, Qredo is made up of two technological pieces: an on-premise MPC network that creates cryptocurrency addresses & sign transactions, and a blockchain that keeps tracks of the digital assets in the addresses generated by the MPCs. With this combination we grew to >115.000 wallets and >1.6m network transactions (1).
However, on the flipside, our value proposition is limited as it only extends to our own webapp and API.
We challenged ourselves to think bigger, and focus on what we could achieve rather than to protect what we’ve built so far.
When we launch Fusionchain testnet, we transition from a pure application-based platform to an open self custody protocol. We landed on 7 criteria such a protocol must meet:
It’s open by design. The code is open-source, available to everyone, and it promotes participation from external developers.
If we want to embed self custody into as many applications as possible, we must attract a large developer community.
If new technologies surpassing MPCs emerge, and as new Key Management Solutions (”KMS”) become available, we need a future-proof & extensible architecture to incorporate those changes.
QRDO must evolve for enhanced usability beyond gas fee payments & governance weight determination.
It must engineer trust away from us. Blockchain applications are never fully trustless - for example Qredo has a trustful MPC interface - but some applications are closer to being trustless than others. We want to make practical moves towards decentralisation, validator onboarding and minimising the trust users put in our own blockchain.
Leverage existing code, and recycle what we can. We want to establish backwards compatibility, and interoperability with existing Qredochain.
It must yield performance increase and ease our system maintenance so that we can focus on increasing development velocity (e.g. L1 onboarding, transaction parsing…)
Building the Fusionchain testnet on the Cosmos SDK with its CometBFT consensus protocol was an obvious choice: it’s stable, fast and customisable and we have deep in-house expertise with CometBFT and Golang. Cosmos is modular, where each module has a state and handler logic that’s distinct to other modules. This enables tight coupling, so we can extend the feature set without risking breaking existing code.
Leaning on Cosmos, Fusionchain will be a high-throughput, low-latency chain with instant finality and no challenger period. In addition, through IBC, it’s highly interoperable including token transfers to other app-chains, cross-chain contract calls and interchain security. We’re excited by the ease with which external validators can be onboarded and we are thrilled to introduce on-chain custody services to a $54bn large and growing ecosystem with over 249 apps & services (1).
We are also looking forward to benefitting from all out of the box Cosmos modules we would otherwise need to build ourselves, and tailoring our chain by building custom self custody modules (e.g. our identity, treasury, policy or QAsset module).
A self custody protocol is a set of rules defining how a network handles assets, achieves consensus and validates transactions. It’s agnostic to the application, and just like web2 applications use HTTPs, TCP/IP, DNS, web3 applications can use our protocol to create self custodial applications.
But the reality today is different. Qredochain - the protocol - and Qredo - the webapp - are linked, and because Qredochain doesn’t support smart contracts we are limited in our ability to extend self custody beyond our frontend and APIs. All the functionality we are exposing is behind closed curtains.
With the introduction of Fusionchain testnet we are lifting this curtain, giving you direct network access. This way any third-party developer can create a new generation of applications that are entirely self custodial and independent of Qredo.
Users can use a native a blockchain interface that can be interacted with through the CLI without using our frontend. Transactions are visible through standard Layer 1 Blockchain explorers, and all transaction fees are levied in $QRDO. The Qredo webapp will be one of of many frontends built on-top of Fusionchain.
To embed self custody primitives into as many applications as possible, we knew we needed to attract as many developers as possible.
Today, Ethereum and EVM-based chains have the largest market share and the most smart contract developers. But, the next largest tranche of engineers are Rust developers since Solana, Cosmos, Polkadot, NEAR and others use either pure Rust or WASM contracts written in Rust. So, Solidity is the language developers currently use, but we wondered: is WASM the future?
For best developer experience, we integrated both the Cosmwasm and the Ethermint library into our application. This lets us execute contracts written for either the Ethereum Virtual Machine in Solidity or WebAssembly-based smart contracts written in Rust, and benefit from libraries from said ecosystem to ease the barriers of entry for new developers wanting to contribute. To the best of our knowledge, we are the first to do so.
With multi-VM support, we can’t only target the 6.000 & 1.500 active solidity and Cosmos developers, but instead also the potentially 2.8m Rust developers. Naturally, we’ll incentivise this as well (Technology Review, 02/2023, Developer Report, 04/2023).
Qredo’s MPC network has a five year history with a track record handling billions of dollars with zero incidents. But, the digital asset industry is changing: customer requirements maturing and new technologies like account abstraction and zero-knowledge are emerging. Indeed, some users want to have the ability to hold their own key materials, use their own MPCs or use different KMS all together.
We developed “keyrings” for this problem. Rather than relying on us, we give customers the freedom to chose. While Fusionchain will primarily expose functionalities for requesting keys and signatures from MPCs, keyrings allow multiple distinct MPCs or even broader KMS to onboard simultaneously. Qredo’s MPC becomes one of many KMS ecosystem that plugs into Fusionchain.
Each keyrings has an economic model behind it to receive funds and get rewarded from key-, and signature requests. For instance, each request to Qredo’s MPC is billed in QRDO. Not only does this increase utility for the token, but because our MPCs will no longer be a point of centralisation for Qredo network, we can scale and decentralize more swiftly.
QRDO is the centerpiece of our Fusionchain architecture, and we wanted to embed it as deeply as possible into the next iteration of our chain. Users will require QRDO for transactional purposes, participating in network activities, accessing specialised services and as a means of governance. Joining Cosmos, we are bringing MPC functionalities to a $54bn ecosystem with the prospect of offering on-chain custody services to over 249 applications. There’ll be several demand drivers to buy QRDO:
QRDO as native coin for gas fees and governance proposals
Native staking with network participation as a validator
Rewarding off-chain actors and other node operators in the Fusionchain ecosystem
Charge QRDO for signature-, and key requests directed to our MPC network
Charge QRDO as a way of spam protection
Access Cosmos and its tools, and offer on-chain custody services for interchain accounts
Stake your $TIA on-chain over Fusionchain
Trade at decentralised exchanges like Osmosis on-chain over Fusionchain
Access decentralised lending from Kava on-chain over Fusionchain
Bring MPC functionaliites to $54bn ecosystem of interchain accounts with
Collapses in entities like FTX and beyond necessitate the need to open self custody primitives beyond our web application. Self custody should be ubiquitous, universally accessible and embedded into every app. And the best way to get there is by offering third-party developers an accessible, easy-to-use protocol by which they can embed self custody into their applications. This transition is no small feat: replacing a blockchain is a heavy lift, but if we get it right, a first & only purpose-built self custody protocol promises several turnkey advantages:
Embed self custody beyond Qredo Platform and directly into third-party applications
Open by design - from open-sourced code to being permissionless for builders & validators
Future proof and extensible architecture in case disruptive technologies emerge
Keyrings that enable plug & play key generation & signing services
Evolve QRDO beyond gas fee payments and governance weight determination
On-chain self custody for a $54bn large, growing & highly interoperable Cosmos ecosystem
Engineer trust away from us and make practical moves towards decentralisation
“You can follow the Fusionchain progress by visiting our Github repository. In fact, you can clone the repository and set up your own chain today. Ahead of a testnet release, we are currently working on integrating policy parsers, setting up walletconnect and creating a frontend.”