As work progresses to build a technical bridge between Haven and THORChain, we invited Harlequin from the Haven community to give an overview to the protocol.
Bitcoin adoption suffers from two major drawbacks, stability and privacy. Whilst Bitcoin maximalists often point to the declining purchasing power of fiat currencies and upcoming protocol changes, the truth is that these two challenges prevent the adoption of crypto in the places that need decentralised money the most. Even if a Venezuelan or Zimbabwean holds BTC, they still need off ramps into USD to be able to make the daily purchases they require to survive. It is why Bitcoin adoption is still predominantly a dream amongst developed nations and far from reality in the rest of the world.
Haven solves both of these issues and provides genuine hope for liberation from oppressive regimes and hyperinflation. Built using Monero’s privacy functionality, Haven offers a way for anyone to privately store their wealth without the need for any third-party intermediaries. An open source, community-led project with no ICO or corporate backers has built an extraordinarily powerful solution that is unique in the crypto ecosystem.
Haven allows anyone, anywhere to hold their money in a range of different asset classes to suit their needs. Virtually any asset can be added to the network including precious metals, commodities and stocks to enable diversification in complete privacy.
By building on top of Monero’s cryptonote protocol to support proof-of-value exchange functionality, Haven enables users to mint synthetic assets on chain. It does so by burning Haven’s base currency XHV, and minting xUSD, the gateway currency, at an exchange rate fed to the protocol by independent decentralised oracle providers.
As the exchange rate is determined by the market price of Haven on exchanges, the offshoring mechanism could potentially be exploited for individual gain. To counteract this, Haven uses a 24-hour moving average price and variable time locks with conversion fees to protect against these attacks. When a user exchanges between XHV and xUSD, they select an unlock time that dictates when they will be able to transact or exchange their newly minted coins. The faster the unlock, the higher the fee.
Slower transaction = lower fee <—> Faster transaction = higher fee
The current exchange fees are a reflection of the stage that Haven is at. The greater the market cap and trading volume, the less risk that individual or small group actors can manipulate the price for their own gain.
Once a user holds xUSD, they will be able to exchange for a wide range of xAssets eventually consisting of currencies, cryptos, commodities and stocks. The next fork will see the release of xGOLD, xSILV, xCNY and xEUR and for the first time, give people the chance to diversify their wealth in complete privacy.
Whilst Haven follows Monero’s emissions curve for mining rewards, the mint and burn process creates a fluctuating supply of XHV relative to the asset conversion activity in the network. You can view real-time statistics here.
Thanks to Madlentil who contributed to review and edits on this article.