Ravencoin’s New Features as an Alternative to Smart Contracts

Categories:Personal
Bruce Fenton

A Different Model for Decentralized Finance and Other Apps

Smart contracts have a lot of extra complexity, in some cases this has caused critical errors.‬ We see this often.

‪Ravencoin looked to solve token issuance in an entirely different way, with no smart contracts. The protocol (a Bitcoin code fork) modifies the UTXO output to allow customizable tokens.

Users can use the wallet to create digital assets, choose the number of tokens and choose if the token is reissuable or a fixed supply. Creators/ issuers control the tokens using a special admin token which is controlled by a private key. Creating a token sends 500 RVN to a permanent burn address.

The digital assets can be anything the issuers choose: game tokens, securities etc.

No smart contracts, Bitcoin code fork, POW mining, modified UTXO.

There were a few goals of why this basic structure was chosen:

Occam’s razor / simplicity — the less moving parts the less ways something can break. Ravencoin was designed to be similar to Counterparty but built in to the code so the protocol would be aware of the assets. Counterparty is an early asset issuance protocol that works on top of the Bitcoin protocol. It has limitations and drawbacks (which Ravencoin has worked to improve on) but also has a simple elegance. When I first talked to people about Ravencoin pre launch a lot of reaction was that it was too basic and simple. People wanted to hear about a $49 million fundraise for a proof of stake thing, not a no fundraise, no premine POW coin forked from boring Bitcoin. 😂

Proven POW mining governance mechanism — the governance for Ravencoin is POW mining. That’s it. The miners run the software they want. There is no leader, headquarters, official developers, offices, treasury, budget or executives. the governance is purely and only the software people choose to run. This governance model was copied directly from Bitcoin because Bitcoin so far has done very well with creation of a strong, secure and decentralized chain.

Permissionless, censorship resistant base layer — because the base layer of Ravencoin is based on POW mining it cannot be altered or tampered with aside from a 51% attack which would be visible to all on the network.

Less friction in the creation & moving of assets — assets are created using a simple default wallet you can download from GitHub. It takes just minutes and no programming expertise is needed. The protocol was specifically designed for assets so it is very simple and straightforward.

More decentralized / no reliance on trusted parties — the statements of truth from the Ravencoin ledger verify what RVN digital assets / tokens are held by what wallet — there is no POS, federation, validators or anyone else needed to say what is true. If your wallet says you have an asset then that has been validated on chain just like the Ravencoin itself.

Capabilities — Tagging and Membership Assets

Part of the original roadmap and white paper nearly two years ago included some new features which were just completed and added after a very long period of testing and development.

A membership token allows an issuer to send a special token to a user. This token is non fungible and only can move once. So a club for example could send tokens to members. Likewise a bank could send the tokens to everyone who has been KYCd. Ravencoin asset issuers have the ability to allow assets to trade only between members.

There are other articles going into detail on these features. In summary, they offer very robust abilities for asset issuers. Issuers can use a set of tags to identify different types of assets and abilities. These should help issuers comply with securities or other regulations. They also have potential for games and other use cases.

At the end of the day a smart contract with thousands of lines of code comes down to a couple key operations: is a token able to move or not. Rather than gum up the process with ever changing compliance requirements, Ravencoin makes some very basic, simply, building block tools which can be very powerful when implemented.

This model is not perfect. It’s definitely different than other models and has its own strengths and weaknesses.

Ravencoin is open source, decentralized and community owned. There was no fundraise or premine and there is no central control. In other words it’s your project. You can use it, copy it, work to improve it or ignore it. It’s software given away freely.