bancor-token-economy-made-with-ruby

by Yuta Kurotaki

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Yuta Kurotaki / GMO Pepabo, Inc. 2018.05.31 RubyKaigi 2018 bancor: Token economy made with Ruby

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Senior Software Engineer Yuta Kurotaki @kurotaky

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SUZURI People https://people.suzuri.jp/

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Crypto currency “SUKISUKI” corps • Introduced OKIMOCHI to Pepabo’s Slack • OKIMOCHI: Send bit coins with reaction on Slack • Research and development of Kaleidscope • KVS on IPFS • Web service development using Bancor Protocol • and More ! https://speakerdeck.com/kentaro/wips-for-cryptocurrency-at-pepabo

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Outline • Blockchain • Smart Contract • Token Economy • Bancor Protocol & Ruby • Conclusion & Future plans

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Blockchain

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What is Blockchain? • Decentralized ledger • P2P Network • Proof of Work

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Pros • Decentralized ledger • Tamper resistant ledger Cons • Scalability problem

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Blockchain Applications • Financial services • Healthcare • Personal Identiﬁcation • Contracts

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Smart Contracts

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Ethereum • A Next-Generation Smart Contract and Decentralized Application Platform https://github.com/ethereum/wiki/wiki/White-Paper

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What is Smart Contracts? •A smart contract is the simplest form of decentralized automation, and is most easily and accurately deﬁned as follows: a smart contract is a mechanism involving digital assets and two or more parties, where some or all of the parties put assets in and assets are automatically redistributed among those parties according to a formula based on certain data that is not known at the time the contract is initiated. https://blog.ethereum.org/2014/05/06/daos-dacs-das-and-more-an-incomplete-terminology-guide/

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Example •A wants to pay $500 to B to build a website. The contract would work as follows: A puts $500 into the contract, and the funds are locked up. •When B finishes the website, B can send a message to the contract asking to unlock the funds. If A agrees, the funds are released. •If B decides not to finish the website, B can quit by sending a message to relinquish the funds. •If B claims that he finished the website, but A does not agree, then after a 7-day waiting period it’s up to judge J to provide a verdict in A or B’s favor. https://blog.ethereum.org/2014/05/06/daos-dacs-das-and-more-an-incomplete-terminology-guide/

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Token Economy

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ICO(Initial Coin Oﬀering)

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ICO(Initial Coin Oﬀering) • ALIS ICO Results • 430 million yen ! • Openness https://alisproject.github.io/whitepaper/whitepaper_v1.01.pdf

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Token Economy • Token economy means economy by token (electronic vouchers / substitute money) • Make something of value realized by tokenizing and make it possible to trade

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Problems in Minor Token Economy • Coincidence of Wants Problem • Agreement on price is required between selling side and buying side • Minor currencies are hard to distribute. I can not sell(buy) it when I want to sell(buy) it ❌ *XBOUUPTFMM GPS *XBOUUPCVZJU GPS Coincidence of Wants Problem

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#BODPS1SPUPDPM

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Bancor Protocol ͸τʔΫϯΤίϊϛʔΛࢧ͑Δେൃ໌ͱͳΔ͔ʁʢલฤʣ

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Bancor Protocol • Automatic determination of transaction price • Continuous liquidity

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A New Method for Price Discovery • Balance: Reserve Token Balance • Supply: Smart Token Supply • CRR: Constant Reserve Ratio https://bravenewcoin.com/assets/Whitepapers/Bancor-Protocol-Whitepaper-en.pdf

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Price Calculation Per Transaction • T = Smart tokens received in exchange for E (reserve tokens), given R, S and F • E = Reserve tokens received in exchange for T (smart tokens), given R, S and F R - Reserve Token Balance S - Smart Token Supply F - Constant Reserve Ratio (CRR)

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#BODPSHFN

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Motivation • It takes money (Gas) to do with a block chain • It takes time for transactions • It takes cost to understand the structure and language of the block chain

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Motivation • Bancor Protocol implemented in Ruby

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Bancor • https://rubygems.org/gems/bancor • https://github.com/kurotaky/bancor

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Bancor Whitepaper Price Calculation Examples https://bravenewcoin.com/assets/Whitepapers/Bancor-Protocol-Whitepaper-en.pdf

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Demo

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$PODMVTJPO

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Conclusion • Implementing the Bancor protocol in Ruby makes it easy to simulate web applications built with Rails without using smart contracts

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Future plans • Decimal point operation • Ethereum World Idea implements in Ruby World • Ruby World Ideas implements in Ethereum World • Ruby Ethereum

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Enjoy RubyKaigi 2018 !!