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Introduction to Celsius experiment series

By RafaƂ - 2020-11-01

Crypto lender Celsius is producing a new innovative series of experiments over the next few months that would test what it would look like for the company to decentralize some of its operations. The centralized finance, also called CeFi stalwart is working with Horizen, a platform that develops and maintains the privacy token ZEN, to take a look at creating a proof-of-reserves system using Horizen’s zero-knowledge proofs. Regarding this new technical collaboration, Nuke Goldstein, chief technology officer at Celsius shared that: “The biggest challenge in DeFi [decentralized finance] is transparency,” said. “How do we show the world that the numbers that we report are real?”

Proof-of-reserves solution

The proof-of-reserves pilot would take the information that appears on Celsius’ website and have it fed from a Horizen sidechain as opposed to Celsius’ internal servers. The application would show total customer assets per coin type at first and eventually share Celsius transaction data encrypted by Horizen’s zero-knowledge-proof toolkit to not reveal the personally identifiable information of customers. That said, the proof of reserves wouldn’t give customers a look into what portion of Celsius’ lending portfolio is unsecured; what portion of depositors’ funds have been invested in derivatives contracts rather than in loans; or the amount of collateral pledged by borrowers that is being rehypothecated. Celsius will also subject these proofs-of-concept to hackathons in the Celsius community. To conclude this new step forward a brighter technical infrastructure toward these experiments, Goldstein said:

“We’re going to wrap the ideas and technology in such a way that we can share with the community and say, ‘Try to find holes in this, try to find what’s wrong with this,’” Goldstein said. “And if you find something, we pay you for it. It will be years however before customers see these applications in production, It’s a long process but these phases will get us closer”

All the information about Celsius experiment series can be found at https://support.celsius.network/hc/en-us