What is obscuro?
LAYER 2 NETWORK FOR CONFIDENTIAL SMART CONTRACTS
What is obscuro?
Obscuro is a privacy-first Ethereum L2 solution that sits between Optimistic and ZK rollups. It leverages Trusted Execution Environments to benefit from the best of both worlds.
You may ask yourself, what does that actually mean? Let’s explore that in this article. I’ll trade you 5 minutes of your time for all the information that you need. Let’s dive in.
so, what is obscuro?
Obscuro aims to bring back privacy to Ethereum, and it plans to do so on its own Layer 2 network. That allows for cheaper and faster transactions while maintaining the security and ecosystem that Ethereum provides.
On the Obscuro network, users transact with full privacy on any Ethereum smart contract. As an L2, ETH based application don’t need to make any changes to become a private Obscuro application.
This makes the network developer-friendly, as well as highly attractive to users.
the benefits of network-wide privacy
If you understand blockchain, then you know that everything is public. While it is a very powerful USP for blockchain technology, there are times where you prefer to transact in an anonymous manner. Not because you have something to hide, but because privacy is a basic human right.
Here are some examples of where privacy comes in handy:
- Sealed auctions
In a sealed auction, the bidders make sealed offers to the seller, after which the auctioneer and seller can open them privately.
- Private agreements
Some agreements are sensitive, like an agreement between a service provider and a client. While blockchain is very suitable for locking in contracts and agreements, these sometimes contain NDA of sensitive information. Obscure allows for agreements that are entirely private, aside from the participants in the contract/agreement.
Let’s face it, doing KYC is a pain in the butt. And it’s also a security risk. With Obscure, there will be privacy enabling KYC solutions where users can decide what bits of information they would like to reveal on demand.
- Private NFTs
Trade and issue NFTs with complete privacy and move between L1 and L2 networks.
exploring the tech side of things
The main thing that makes Obscuro stand out from other Layer 2’s is the fact that they hold privacy and data confidentiality in high regard.
In public blockchains, all transactions are visible so that the network can be properly secured and all transactions are validated. However, this also creates a negative effect: front-running transactions. Also known as Maximal Extractable Value (MEV).
How that works is that network validators (miners, stakers, block proposers) observe user transactions to try and steal value by pre-empting those transactions. Here’s an example:
- A user wants to buy token X and places an order to buy it through Uniswap or another AMM
- A front-running bot detects that order, quickly places an order to buy token X at the current price and drives the value up and immediately sells token X to the user. The bot is able to do this by using a higher gas fee, so that his transaction gets processed quicker.
This front-running issue has cost network participants over $1 billion in 2021. Obscuro’s Layer 2 network solves the front-running problem entirely.
Obscure has their own $OBX utility token. It will mainly be used to pay for validator fees, as in most smart contract ecosystems. Through staking, the available supply will be reduced over time as investors flock to earn their share of the treasury returns.
Recapping my thoughts on Obscuro
So, what are your thoughts so far? I’ll share mine below:
- I think Layer 2 networks will play a huge role in the future. Vitalik mentioned it himself, layer 2’s will play a tremendous role in providing scalability and low gas fees.
- Obscure is providing a real and interesting use case, which is network wide privacy. Privacy is a basic human right, and we deserver a network that facilitates this.
- The team seems experienced and definitely not lacking in brain power. They are natives from R3 and other start-ups such as Avalanche.
- Decent sized community, even though they haven’t gone to market yet. Some interesting statistics: 6K+ Discord, 18K+ testnet applications, 1.6K+ testnet developers.
- Privacy is something I’m quite bullish on, and what made me interested in Block Wallet back in the day. But, there is some uncertainty around privacy centered projects from a regulatory point of view.
- Vesting for early stage investors leaves room for growth for spot buyers.
I am not a financial advisor, I am just your friendly neighborhood pig.
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