The Upgrades We Made
DeFi is an ever-changing industry and Centaur has made certain changes to its direction in order to keep up with the demands of the industry.
Initially, the liquidity pools deployed on Ethereum and other compatible blockchain protocols were designed and built using zero-knowledge implementation. This is intended to ensure that transactions entering and exiting the liquidity pools are disassociated and cannot be traced, providing users with a degree of security and privacy over their address balances.
Nevertheless, zero-knowledge proofs are computationally complex and consume a high amount of gas. In a high gas cost environment, gas fees would prove to be prohibitively expensive. As the recent successes of Binance Smart Chain and Polygon have shown, the primary concern for users is fees, and users are willing to make certain trade-offs with regards to security when fees are low. As the zero-knowledge implementation is built into the liquidity pool and cannot be opted out of, this may disincentive users from using the liquidity pools.
As such, given that zero-knowledge proofs appears to be a fringe use case, we have decided to explore other technologies.
Centaur Chain was originally conceived as a communication and settlement layer between multiple blockchains. To achieve this, a network of oracles will be established to feed data from other chains onto Centaur Chain.
Recent advances in blockchain technology has brought significant changes to how blockchains communicate and share data with each other. This is usually conducted through the use of oracles and keepers, which would render the use of Centaur Chain as a settlement layer less relevant.
In line with these developments, the Centaur Chain is now designed to allow users to seamlessly swap tokens across different blockchain protocols. Centaur Chain will still exist as settlement layer but is now targeted primarily at institutional and traditional finance users, allowing for use cases such as remittance, micro-loans and payroll to be deployed on Centaur Chain.
The advent of decentralised exchanges (DEXes) was a watershed moment for the DeFi space, with DEXes becoming the main method of providing liquidity to DeFi markets and usurping traditional order books in terms of efficiency. However, as with any new technology, existing DEXes have evinced considerable shortcomings.
Slippage occurs when traders submit a sell or buy order on an exchange and their order is regrettably executed at a lower or higher price than their expected price due to a lack of liquidity. Additionally, contemporary DEXes are struggling with the problem of impermanent loss, which occurs when the price of a pair of tokens a user chooses to deposit into a type of a DEX called an automatic market maker (AMM) diverges either upwards or downwards. This loss is theoretically impermanent because the loss disappears as soon as the relative prices of your tokens return to their original value. This is unfortunately rare in real life and impermanent loss often becomes permanent.
Centaur Swap aims to tackle both of these problems through the implementation of its unique price curve to minimise slippage and price oracles to mitigate impermanent loss. Listing on Centaur Swap requires an existing price oracle and WHEY[3] holders can vote on the tokens to be listed, subject to certain prerequisites designed to minimise risks for liquidity providers and traders.
Many popular crypto wallets are tailored to only hold a handful of cryptocurrencies and can only accommodate one address each, and those which allow users to generate multiple addresses from a seed phrase often have complex usage requirements. Centaur is seeking to remedy this through creating a secure multi-asset, multi-address wallet with an easy-to-use user interface. The seed phrase of each user is securely encrypted with a password and stored a centralised server. This allows the seed phrase to be swiftly retrieved and verified when wallet users wish to create a new address for their wallet.
[3] There are plans to allow the WHEY token to be staked in WHEYDAO which will be used for governance on Centaur Swap.