Ethereum Developer Launches a New Blockchain

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Fabian Vogelsteller, an ethereum developer that has contributed to the web3.js library used in MetaMask and pretty much everywhere, including here at Trustnodes for the login, has launched a new blockchain which has began the process of migrating from the LYXe ERC20 token to the LYX coin.

580,369.811 LYXe have already migrated out of a circulating supply of 15 million with all seemingly now going fine after a delay earlier this week due to a small bug.

That makes this the newest blockchain to launch, with its mainnet goin live in May, and so what on earth is Lukso?

The whitepaper is of no help. It's 146 pages long with sentences like: "The contemporary creative economies are characterized by a transgression of traditional disciplines and reality dimensions."

They have an ecosystem overview series, but that too doesn't seem to say much except confirm this is basically eth, furnished with the eth style Proof of Stake and potential future plans for sharding or pruning with the implication seemingly being Lukso will just follow eth.

So from what we understand, this whole new blockchain has been launched just to implement the Ethereum Improvement Proposal ERC725 made by Vogelsteller himself back in 2017. In explaining what it does, Vogelsteller said:

"Imagine the following: You want to interact with a smart contract of a bank to create an account. They need to make KYC on you. In the openAccount call from your identity, the bank contract can see this call is coming from an identity, so he will:

-> look for claim type 1:biometric and 2:homeAddress and for a claim issuer they know they trust, like the German state for 1 and the Deutsche Post for 2.

As they know their identity contract addresses, they simply do: keccak256(issuer address + claimTypeNumber) and get the index of the claim in YOUR identity.

-> they retrieve the claim, check that the signed data matches keccak256(YOUR identity address + claimTypeNumber)
-> Now they check that the key which this data was signed, is still hold by the issuers identity contract.
-> They got their proof - without that they need to actually see the biometric data, nor the address, as they trust the issuer - and they can proceed in opening an account."

In the discussion there seemed to be a disagreement regarding whether this needs to be a standard, or just an implementation. So as of now the proposal remains a draft in eth.

Therefore we have Lukso where it obviously is not a draft with it unclear whether there's any other difference between Lukso and eth. We contacted Vogelsteller, but did not receive a response in time for publishing.

From what we can see, the only other differences are at the edges. In particular Vogelsteller is big on javascript so Lukso might use JS a lot more. Otherwise this is basically eth with just an edge implementation regarding extra data for accounts.

What Use?

The whitepaper has pages and pages of use cases, but they're no different than in eth. The only extra use case here is that if you wanted to reveal the ownership of the eth address, you can claim an identity.

That can be useful. Nowadays Etherscan effectively does this identity attribution, but Etherscan can potentially always go rogue, so it's not a useless feature.

The KYC use case however raises privacy concerns because although an entity like Binance might want to officially claim ownership of an address, Joe Smith would probably not want to unless he wants to tell everybody what he had for breakfast.

Because all the transactions are publicly visible, but from what we understand Lukso is not forcing such identity, it is just allowing it.

Is a whole new blockchain worth it however for just this minor matter? That's for the market to decide of course and currently it is giving it a marketcap of $140 million, but a reasonable answer can also be why not.

Vogelsteller has some ideas that slightly diverge from the big ethereum devs ecosystem, and so he has taken the permissionless route of implementing these ideas in his new ecosystem.

He is clearly a capable dev, and non controversial as far as we are aware, so is there speculative value in a slightly different approach that might potentially hit some things right?

A difficult question to answer, but it's not everyday that a fairly prominent ethereum developer launches a new blockchain.

There's Cardano's Charles Hoskinson, who broke up with eth early on in 2015-16, and Cardano has done extremely well from its ICO days even though it has no innovation on eth at all.

Lukso was an Initial Exchange Offering (IEO), though now a fully running decentralized network with 10,000 validators.

If we go by SEC's public statements, that means Lukso is not a security, just like eth. Yet the new SEC under the chiefdom of Gary Gensler has claimed Cardano is a security, so whether Lukso is or not depends on what happens with Cardano.

One key point about being a security is that you need the owners to be identified. There is no way to do that in eth or Cardano currently, but in a tyrannical world or if the out of touch old bankers get the upper hand in USA and force absurdities, then Lukso may well be well placed to comply.

Not that technicalities are a barrier to breakfast surveillance, as Lukso shows, but if this chain develops and maintains a focus on that singular aspect, furnished potentially with zk methods to only reveal that identity when wanted, it can potentially advance the wider crypto space for some use cases, especially where corporations or old finance is concerned in regards to fully natively tokenizing bonds for example.

It's a mutation in effect, and since nature has them then they're useful. But not all of them, by far, so whether this chain has any legs remains to be seen.