Discovering Interledger, wondering how it could benefit our project (decentralized broker + wallet)

Hello everyone :slight_smile:

I am happy to found this protocol. I am currently reading what I can, but I was thinking it could help to accelerate things if I ask directly here :slight_smile:

So we are building two products:

  1. A decentralized broker with an underlying protocol that will allow anyone to become liquidity provider/market maker (a kind of interledger for trading, let’s say). Users deposit DAI (for now) in a smartcontract, as collateral, and they can trade on Forex, Stocks, commodities etc. Settlement are instant (whenever a trader wins or looses). The counterparty is always the smartcontract, but in order to avoid any risk, we, as liquidity provider / market maker we manage the counterparty risk by hedging the trades on the real market. So in the future, many other company would be able to provide access to any market as soon as they lock enough collateral to avoid misbehaviour.

  2. A smartcontract-based wallet, personal multisig, which only manage ethereum assets, of course.

The pros of our structure are the fees (smartcontract everywhere) so we will work in the future on layer-2 solutions (this is how I found you by the way) and interoperability of course.

The choice of the smartcontract wallet was led by the wish to have the safest wallet, as well as the easiest to use, since we mainly target a global audience rather than tech savvy users.

In that regard, by the way, the main currency of the wallet would be the DOLLAR (DAI) and the non-stable tokens are shown in another part of the wallet, to clearly show that it is a payment wallet (we want to integrate payment channel that connects our user with a DAI / USD pool, connected to the VISA or MASTERCARD network) which can also help managing a porfolio of volatile tokens :slight_smile:

How could Interledger be beneficial for us? To bring more interoperability, scalability, lowest fees, while remaining absolutely non custodial?

Welcome to the forum, @Pascal_Tallarida!

  1. This sounds like quite an ambitious undertaking! It sounds a lot like the Rainbow Network from @danrobinson. It is pretty flexible and technically feasible with Interledger. There is no formal specification or reference implementation for it yet, but it might be worth reaching out to him and asking about some of his research. Important note: the Rainbow Network uses collateral to synthesize financial products.
  2. Sounds totally feasible to me. I think Gnosis is the most sophisticated one out there right now in case you need a reference. Just make sure you get your smart contracts properly audited before deploying them! :smiley:

Just don’t forget to learn from others’ mistakes. It sounds great in theory, but smart contract based wallets can quickly turn catastrophic! I am looking forward to seeing what approaches you use though and how it will stand out.

This is something that I have thought a little bit about more recently with respect to Ethereum. I think it would be really interesting if you could pay for gas fees with something like Apple Pay on iOS. Technically, the wallet service in this mode would not be censorship-resistant because you (or a third-party) would be required to include the transaction in a batch. More recently, there have been interesting hacks and developments on this front using what are known as “meta-transactions”.

As the service provider, you would subsidize gas costs on behalf of users and in exchange, they would pay you using some alternative means over the ILP Network. This has a lot of potential to reduce friction for “DApps” and payments on the Ethereum network, since the end-user does not have to assume additional volatility risk associated with ETH.

There have been a handful of times when I wanted to use a wallet to send USDC/DAI but I did not have ETH, so it technically incurred a round-trip fee to complete a payment. Despite being a little more centralized and more prone to censorship, it could theoretically be engineered to include an “ILP-enabled” mode that requires minimal trust, and a default mode that would require ETH.

I am sure there are other ways a wallet service could benefit from using ILP, but that’s just one example that I have been thinking about, but it likely requires the teams to assume a considerable amount of technical debt to offer that level of flexibility and safety.

Best of luck!