ConsenSys’ new project Panvala is not easy to understand from glancing at the website and reading their whitepaper, so I’ll try to summarize it here.
Who are Consensys?
ConsenSys is a company founded by Ethereum co-founder Joseph Lubin. It builds communities, funds events and projects, organizes learning camps, and more – generally, they do their best to forward the Ethereum ecosystem as much as they can, making mass adoption and pleasant UX for the “mortals” a priority. They’re something like the Ethereum Foundation, but with a bigger focus on profitable ventures.
If you’re a fan of Marvel, you can look at ConsenSys as S.H.I.E.L.D. in a world where Blockstream is Hydra. ConsenSys is X-Men where Blockstream is Brotherhood of Evil Mutants. If DC is more your universe, ConsenSys is Justice League to Blockstream’s Legion of Doom.
What is Panvala?
While companies like Audithor perform audits and verifications of smart contracts on an individual and private basis, this process is centralized and requires trust in the entity doing the auditing. In the Panvala project, we’re dealing with a public registry (a smart contract) of other smart contracts, each of which has a safety rating based on its current status.
This means that if we deploy contract X and X in the moment of time T is rated 3 (Safer – the maximum score), then applications sending transactions to this contract’s address (like MetaMask) will be able to read the registry and display the safety level of the address the transaction is being send to, increasing reliability and confidence. If the contract changes, then a re-evaluation would be necessary.
How are contracts rated? Who does this?
The author of a smart contract first needs to find a “champion” to put their case forward for a secure and safe contract. This claim is then sent into the system (smart contract) and can be disputed by someone who disagrees and sends a counter-claim. Then, it’s voting time. Token holders and study this dispute and vote one way or the other. After voting, the project will either get a better safety grade (another Panvala mark), its status will remain the same, or it might even lose a mark and be marked insecure, depending on where it’s at when the voting completes.
Projects with one Panvala mark on them can enhance it twice – up to level 3 which is the safest level. Each enhancement requires a repeat of the above process.
Panvala tokens required for this process will have an interesting distribution structure. 20% will go to the ICO, 20% will go to partners who signed up for a pre-sale (no bonuses or special prices, just guaranteed availability), 10% is kept by the team and 50% goes into a token capacitor.
Altruism as a Service?
This Token Capacitor is described in a post on the Panvala blog.
In a nutshell – token holders will vote on where the Token Capacitor sends rewards periodically and in which ratio, in a mechanism similar to mining (the less reward there is in the capacitor, the smaller the amounts being sent out). The token holders vote by donating their tokens into the capacitor. The more they donate, the more of a vote they have on where the reward (collected tokens) goes.
Those who participate in the betterment of the system (audits, consulting, advice, events, etc.) are considered “miners” of this system and they are the recipients of this reward, based on the ratio predefined by the donations of the token holders and their decisions on distribution. It is assumed that these miners will feel the altruism effect of the community and give back in the same manner – by donating some or all of their tokens into the pool and forwarding the distribution. The idea is to have a microeconomic system of forwarding tokens in which teams and people help each other for the sake of social prestige of having helped to a desired extent in a given reward cycle.
The Capacitor project partly counts on altruism, partly on egoism.
Panvala adds a dose of crowdfunding and crowd wisdom to the safety level of smart contracts. Whether or not that’ll work out remains to be seen, but I’m personally somewhat skeptical for two reasons:
- Counting on the goodness and generosity of people to refill the capacitor with no rewards other than prestige is very optimistic, given what we know of the average investor: most care only about themselves.
- As George Carlin said: “think how dumb the average person is. Then realize that half of them are dumber than that”. The problem with this model is crowd-wisdom, and a crowd is easy to manipulate – this is proven by the presence of flat-Earthers and antivaxers who went from a joke to a serious threat to scientific progress and humanity’s health. With that in mind, how hard do we think it is to manipulate a few thousand people into voting a competitor’s contract into “Unsecure” badge territory?
Either way, both Bitfalls and Audithor have applied to be partners as a single entity and we plan to participate in auditing and reviewing other people’s contracts as well as verifying our own. With enough interested parties and honest participants, this system can be hugely successful and beneficial to the Ethereum community.