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Avatars, Oracles, and other forms of Compliance Magic – An interview with Metaverse founder, Eric Gu

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Avatars, Oracles, and other forms of Compliance Magic - An interview with Metaverse founder, Eric Gu
Source: Metaverse

The Metaverse SuperNova release has introduced an interesting new concept to the ever-growing playing field of smart contract enabled blockchains: On-chain identities, and built-in KYC verification funnels.

At the center of the new release are what Metaverse calls “Avatars“. An Avatar is essentially a user’s [or company’s] true identity, tied to the blockchain addresses they own. This works a bit like the Internet’s DNS system: following identification, a string of complicated characters [the user’s public key] is represented as a human-readable address that resembles a domain or an email address. Something like [email protected] The verification process itself is signed by “Oracles”, which are trusted institutions such as banks or the government itself.

With the new release, owning an approved Avatar is mandatory if one is interested in issuing new digital assets on Metaverse. The rest of us can still remain anonymous.

We sat down with Metaverse founder and CEO, Eric Gu, to better understand what the motivation behind this de-anonymization of the blockchain space is, and if this implies even greater surprises in the future.

Eric is a veteran entrepreneur in the Chinese blockchain space and significantly contributed to the growth of the Ethereum community in the country. Between 2014 and 2016, Eric has spent considerable efforts to convince local authorities to adopt Ethereum. This is also when he understood that fundamental issues will have to be addressed before the technology can go mainstream.

Eric:  Already in 2014, I invited Vitalik [Buterin] to the very first Ethereum roadshow in China. We stopped in Beijing, Shanghai, Shenzhen, and Hangzhou. It took awhile for our efforts to bear fruit, but around June of 2016, a municipal government asked our help in creating a blockchain solution for land transfer deeds. At the same time, the DAO attack occurred, and Vitalik decided to hard-fork the Ethereum chain. I disagreed with this because when you hard fork, two land deeds appear on two public chains instead of one. How can you explain this to the municipal government? This is when I understood that a different approach is needed.

Author: So the DAO induced fork was what triggered you to create your own chain. But it seems that since then you’ve diverged quite a bit from how your friends at Ethereum see the future of blockchain.

Eric: I believe Ethereum is a really good project, their developer community is still the strongest. In terms of blockchain-powered trade and business, I don’t think Ethereum will have a great future. In trade and business settings, you normally need identities to transact goods and services between people. While there are digital identity solutions for Ethereum, all of them reside on the application layer of the chain and, for the most part, working with them is just too convoluted. This is unpractical, and honestly, not very secure. With Metaverse, identities are part of the chain itself. All you need to do is search up an Avatar’s name and pull up the blockchain history of this digital identity, including their reputation.

Author: How are identities on the application layer less secure? What do you mean by that?

Eric: Well, first of all, the more complicated this process is, the easier it is to attack it and the more prone it is for mistakes. But there’s of course more.

Our stack design is much safer than Ethereum’s. Ethereum’s bottommost layer is, of course, the consensus/security network, on top of this lies the EVM. Above this is the smart contract layer, on which tokens, assets, and identities live. If hackers were to attack Ethereum, they would go for the smart contract layer. Once this layer is compromised, your tokens and assets are gone and identities are open for theft.

In contrast, on Metaverse, the token and identity layer is built directly on top of the consensus/security layer. Then on top of this lies the token layer. Smart contracts come only after that. Therefore, if hackers were to attack the smart contract layer, they wouldn’t be able to steal any digital assets. This is a huge advantage.

Author: So digital identities are part of the stack, and not an application coded on top of it?

Eric: Absolutely. This also allows us to build an on-chain reputation system, which is essential if we want decentralization not to compromise accountability.

Author: Is this where Oracles come in?

Eric: Exactly. Oracles are essentially Avatars who have high reputation scores and consequently have certain privileges to approve certain transactions. We believe in an on-chain intermediary which can verify transactions that still need a trust factor.

For example, if I were to sell a digitized asset like real estate to you on the blockchain, how could you trust me that this digital asset I am advertising is the real thing? An Oracle like a real estate appraiser here would verify my claim, so you, the buyer, could proceed with the transaction without a doubt. In a decentralized environment, this can only function with airtight identities and reliable reputation mechanisms.

Author: Many in the blockchain space would consider this to be a very high degree of centralization, with Oracles having such privileges.

Eric: We understand that, but frankly, if you want to utilize the benefits of blockchain technology for the real-existing economy, you’ll have to account for how business actually works. We want to make it easier, not harder, for businesses to transact with each other and their clients. For this to become a reality we will need to facilitate trust, and when we say “trust”, we mean real-world trust, not only the technological trust in the consensus mechanism, where Ethereum and other chains stop at.

Author: What do you mean by real-world trust in contrast to “technological trust”?

Eric: Let’s say I want to buy a house from a total stranger. In the blockchain age, the moment I send my tokens I’ll get a certificate in return which represents ownership of said house. If I trust the smart contract handling this to be immutable and to perform as expected – this is what I call “technological trust”.

But how do I know that the certificate is actually worth something? That it is, in fact, representing the house I want to acquire? To verify this I need to step out into the real world and make sure that I’m not being sold a shack down the road. In the real world I’d have lawyers and real estate agents taking care of this part. Metaverse allows me to employ Oracles that govern this part of the process for me, without having to do it myself or having to exit the blockchain environment. It’s their reputation that turns these agents into Oracles in the first place, so I can trust the entire process. This is what I call “real-world trust”.

Author: The reputation score seems to be a vital part of what makes Metverse tick. Can you elaborate on this? What kind of reputation are we dealing with?

Eric: Our reputation algorithm [called MARS – Metaverse Avatar Reputation System] has several attributes. To some degree one’s reputation score is generated P2P, and based on the interaction between users. But there are additional components, depending on who you are and what you’re doing. If you’re a service provider, like an appraiser for example, uploading your credentials and diplomas for example, will increase your reputation. The moment business and financial activity comes into play then there’s also something like a credit score that’s being added to the mix. Unfortunately I can’t go into further detail for the time being. MARS is currently being finalized and will go fully live with our next release.

Author: When is this planned?

Eric: Our next big upgrade, called Pillars of Creation, is slated for launch near the end of Q1 2019. In this upcoming upgrade, we will realize the Reputation and Oracle systems to make them fully functional on the chain. Our TPS will also dramatically increase as a result of these technical upgrades, and mimic EOS.

Author: This sounds exciting. We’ll make sure to follow up. Thank you Eric it was pleasure.

Eric: Thank you! Same here.

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Guest Post

Hyperledger Sawtooth: Performance Problem and the way to solve it

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Hyperledger Sawtooth: Performance Problem and the way to solve it

The Hyperledger global initiative within the Open Source movement, bringing together hundreds of technology giants [for example, Huawei, Intel, and Samsung], startups [Blockstream, Lykke, Consensys] and solutions [Netki, Factom, bloq], has become a real push for the entire blockchain industry in forming not only a strong community but also a completely different perception of technology through the prism of innovations in business.

Hyperledger can be called a global collaboration organized by the Linux Foundation. In turn, the uncommercial Linux development consortium, the Linux Foundation, creates sustainable ecosystems around open source projects to develop technologies and implement them in businesses.

Founded in 2000, the Linux Foundation supports communities and innovative projects through financial and intellectual resources, making ambitious and successful contributions to creating technologies for widespread use.

The consortium launched Hyperledger in December 2015 and in February of the following year, it became known about the first participants of the initiative.

The main Hyperledger’s focus is to improve the reliability and performance of the blockchain through comprehensive cooperation with the platform participants, whose number is already over 250.

It is worth noting that for many projects Hyperledger has become the starting point for the development of their own business apps: many solutions have been created on the basis of the platform, ranging from smart contracts to complex multi-stage innovations.

One of the advantages of using Hyperledger is the interaction between its participants since third-party developers can make their own changes to the already created platforms, thus modifying the services and providing new opportunities to end users.

Hyperledger expands its global business and improves its internal processes, developing also the technologies of the Internet of things, logistics, industry, etc.

Platform participants have access to five main frameworks, on the basis of which blockchain solutions can be created, depending on the goals set by the projects’ creators.

Hyperledger Burrow

This framework appeared in 2014 and works in conjunction with Ethereum Virtual Machine [EVM]. Solutions based on Hyperledger Burrow allow enterprises to use smart contracts to optimize their business processes.

Hyperledger Fabric

Initiated by the IBM tech giant, the Hyperledger Fabric framework is the foundation for developing complex, scalable applications for corporations.

Businesses can use smart contracts and many other components. Feature of Hyperledger Fabric can be called a high level of performance, off-chain channels, as well as integration with corporate access control systems.

Hyperledger Iroha

Hyperledger Iroha is designed for easy implementation into a project. This framework is suitable for many businesses, as it is distinguished by a rather light construction and focus on mobile platforms.

In addition, by analogy with the Fabric, Hyperledger Iroha has a well-developed access control system.

Hyperledger Indy

The framework is used for decentralized identification. Hyperledger Indy provides reusable services for creating and using independent digital identifiers.

Hyperledger Sawtooth

Hyperledger Sawtooth deserves special attention since this framework is quite popular. Operating on the new consensus algorithm, Proof of Elapsed Time [PoET], which stands out from the rest with minimal use of resources, the Hyperledger Sawtooth is considered by the community as one of the most promising.

This solution’s developer, Intel, is confident that Hyperledger Sawtooth is ideal for businesses whose requirements exceed the capabilities of the available public blockchains.

The PoET algorithm provides highly efficient consensus achievement without a serious resources’ cost even in an environment where contractors don’t know each other and they have no reason to trust other participants.

The Sawtooth blockchain platform is designed to counteract denial of service attacks that become more likely in a public blockchain environment or in an environment in which unknown parties can interact.

The reason for the popularity of this framework can also be called the ability to integrate with hardware security solutions, “reliable execution environments”, among which are scalable Intel Xeon E processor from Intel.

At the same time, in Hyperledger Sawtooth were found flaws. In the GitHub user profile eugene-babichenko, the problem that the developer was able to solve was described in detail.

It is important to note that the network built on Hyperledger Sawtooth consists of 30 nodes located in different regions [from Europe and the USA to Singapore] and at three different cloud providers.

Having contacted the developer, it was possible to find out that while the node was experiencing problems with the network connection and could not access the minimum number of peers, the blockchain node, in turn, began to consume an increasing amount of RAM.

As a result, the system crashed in about a day, operating on a server with 1 GB of RAM.

The blockchain developer, after careful monitoring, determined that the component that caused the crash was a Sawtooth validator.

It is responsible for connecting all the other components of the blockchain node [transaction processors, APIs, consensus modules], and also manages network connections and data storage.

The vulnerability was discovered in the inner essence of Sawtooth, which is designed to manage some of the computing and networking staff.

The study revealed that the system was overloaded due to saving instances when trying to reconnect to peers. Since each instance has its own waiting time [which was originally used only to block calls], it was decided to clear the futures’ collections based on this timeout.

The developer of the company, using the example of this vulnerability, warns his colleagues about the need to be attentive with the use of RAM in their apps.

Moreover, Eugene noted that the use of open source products can be really useful in cases where your tool behaves strangely and requires immediate corrections.

In the case of the problem described above, just forked Sawtooth core, fixed it, tested the fix and sent this change to the upstream repository.


The blockchain technology is undoubtedly capable of transforming the most well-known business approaches. The Hyperledger platform, in turn, is an indispensable engine of this progress, since it focuses on the development of blockchain solutions for enterprises.

At the same time, you should not lose sight of the fact that Hyperledger is not a magical place that will solve all the corporation’s problems with a few clicks.

To work with frameworks, you need a strong team that owns all the knowledge in the field of blockchain technologies and businesses digitalization. It is also necessary to pay attention to the previous experience of developers.

For example, the company, whose member fixed the problem in Hyperledger Sawtooth, previously contributed to OpenZeppelin and Ethereum, and also provides services to develop a Remme solution.

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