2. Technological Reserves:
Rambox focuses on exploring all possibilities of digital technology in the commercialization of AI and aims to build the world's strongest and most simplified stable investment return platform. Currently, Rambox is focused on liquidity service providers in NFTfi, derivatives, and public chain funding, leveraging AI as a technological advantage in automated investment strategies.
In the future, Rambox will reserve a large number of technological assets, including but not limited to BTCfi, RWA, Move-based languages, EVM cross-chain communication, and other technical means.
2.1 BTCfi Compatibility Technology:
The foundation of BTCfi lies in the technical maturity and ecosystem development of BTC Layer 2. Currently, BRC20 with Ordinals protocol and Stamp protocol are just the prelude to the ecosystem's underlying assets. The potential of BTCfi is primarily concentrated in Layer 2, so it requires focused research and reserves on the development of BTC Layer 2.
The unoptimized Layer 1 makes dApp development and applications cumbersome and inefficient. The emergence of Layer 2 is making certain things usable and efficient. Building applications on Layer 2 while realizing value on Layer 1. The Bitcoin NFT protocol Ordinals has opened the curtain for a major outbreak in the Bitcoin ecosystem. The usage of the Bitcoin network has increased, and transaction fees have surged to levels seen in early 2018. As of May 11th, the number of Ordinals BRC20 tokens has surpassed 14,000, with over 5.8 million instances of inscriptions forged, resulting in increased miner revenue. The growth in Bitcoin network daily transaction fee income in mid-2019 and 2021 was due to overall market activity, whereas this time, the transaction growth stems from innovative developments in the Bitcoin ecosystem, with daily transaction fees reaching over 600 bitcoins at the highest point.
The emergence of Layer 2 solutions like Stacks, Lightning Network, and RSK is opening up new possibilities for Bitcoin. Layer 2 provides a huge opportunity to leverage Bitcoin's large user base and capital pool, and as more developers and users gravitate towards them, Bitcoin's potential as a center for innovation and creativity continues to grow.
As early as 2015, Joseph Poon and Thaddeus Dryja proposed the concept of the Lightning Network, which is currently the most well-known project. The Lightning Network enables fast and low-cost Bitcoin transactions by establishing payment channels, greatly improving the scalability of the Bitcoin network.
Layer 2 solutions also differ in their unique operational methods. These include zero-knowledge or ZK Rollups, Optimistic Rollups, and Plasma, which are prominent types within the Ethereum network.
Zero-knowledge Rollups act as data packets, facilitating staking by leveraging smart contracts on the main chain. However, it cannot directly utilize smart contracts. Meanwhile, data is moved off-chain for further computation and processing. With the deployment of ZK-Rollups, transaction throughput can reach up to 2,000 TPS (transactions per second). It also outperforms Layer 1 in terms of storage.
Optimism L2 solution addresses the issue of utilizing smart contract functionality. However, it may impact other factors such as transaction speed. Other expected features of a general blockchain network are still preserved in the solution, such as security and decentralization.
Leading blockchain networks Bitcoin (BTC) and Ethereum (ETH) both have scalability solutions. The Lightning Network protocol, popular on the Bitcoin blockchain network, is a Layer 2 solution. It helps the network by retrieving transaction data off-chain, processing it off-chain, and bringing the information back on-chain.
Fundamentally, the Bitcoin network lacks the comparability of smart contracts. But with the emergence of the Lightning Network, smart contracts can be introduced on Bitcoin, with recent successful examples being Bitcoin Ordinals Inscriptions. The Lightning Network facilitates instant payments, low transaction fees, scalability, and core advantages of exchange between blockchains.
2.2 Cross-Chain Communication Technology:
The co-development of multiple chains has become an inevitable trend for the future of blockchain. It brings greater freedom to the development of blockchain but also poses significant challenges. As different public chains isolate themselves based on their characteristics, user liquidity is limited within each walled garden.
With the continuous development of the blockchain industry, an increasing number of Layer 1 and Layer 2 blockchain networks have emerged, playing a crucial role in the rapid expansion of the blockchain ecosystem. However, due to the fragmentation between different public chains and the continuous expansion of ecosystems, user liquidity has been restricted, and information cannot flow freely. This liquidity fragmentation problem is becoming increasingly severe, posing significant challenges to blockchain applications and development. In the era of multi-chain coexistence, solving the interoperability issue between public chains has become extremely important and is one of the fundamental requirements for providing liquidity services like Rambox.
There are two main approaches to cross-chain information communication:
The first approach involves a middle chain that forms consensus and verifies/transfers messages between different chains, known as a middle chain.
The second approach involves running a node on each chain to facilitate message transmission, known as an on-chain light node.
In the first approach, the middle chain has complete signing authority over all information. However, this design is susceptible to consensus corruption at a single point, leading to the theft of liquidity across all chains. Currently, the middle chain is securing several billion dollars while protecting hundreds of billions of dollars in value. Furthermore, as the middle chain becomes increasingly decentralized, it is more likely to be exploited by malicious actors.
In the second approach, on-chain light nodes can receive and verify the block headers of each chain. Using light nodes for information transmission is the most secure but also the most expensive. Currently, running an on-chain light node on Ethereum for each opposing chain costs thousands to tens of thousands of dollars per day. Both approaches have their own advantages and disadvantages: the middle chain is cheaper but less secure, while on-chain light nodes are more secure but expensive.
Cross-chain communication needs to enter a new stage: building a universal cross-chain protocol using the lowest-level protocol to achieve full chain interaction. Rambox has never positioned itself as a simple asset cross-chain bridge but aims to be a more foundational infrastructure-level protocol below Layer 1 public chains. Its goal is to completely address the liquidity fragmentation between multiple public chains and solve deep-seated problems like frequent wallet switching for application usage. Rambox not only provides cross-chain functionality but also builds a rich cross-chain ecosystem based on the Rambox protocol. As the Rambox ecosystem continues to develop, it is expected that more native cross-chain products based on the Rambox protocol will emerge.
Rambox achieves decentralized information cross-chain services by deploying a series of smart contracts (Endpoints) on-chain. These Endpoints run ultra-light nodes, where "ultra-light" means they only provide block headers for specified blocks.
Additionally, during the information transmission process, Rambox utilizes two external services: Oracle and Relayer.
Oracle is a third-party service that provides a mechanism for reading block headers from one chain and sending them to another chain. The Rambox team has chosen to use Chainlink and Band Protocol as their official oracles. However, in theory, any oracle service provider can be part of this mechanism. On the other hand, a relayer is an off-chain service that functions similarly to an oracle but is responsible for obtaining proofs of specific transactions. Relayers and oracles must be independent of each other to ensure the effectiveness of message delivery.
In the practical operation process, if you want to send a message from Chain A to Chain B using Rambox, you need to inform the oracles and relayers on Chain A that you want to send a message. Then, the oracle will send the relevant block headers (the digests of the latest transactions on Chain A) to the super-light node on Chain B. Subsequently, the relayer on Chain A will submit the proof of this transaction to Chain B. Once this proof is validated on Chain B, the message can be sent to the intended recipient on Chain B. One of the benefits of this approach is that it is both secure and cost-efficient as it combines the advantages of the middle chain and on-chain light node methods while eliminating their weaknesses.
2.3 RWA Ecosystem Technology Reserves
RWA refers to Tokens that represent real-world assets for trading on the blockchain, including both regular Tokens and NFTs. Real-world assets can encompass various high-value items such as real estate (properties and rental streams), loans, contracts, guarantees, and any valuable items used in transactions.
Given the surge in digital assets and the influx of new institutions, robust digital asset custody becomes extremely important. Over the past few years, licensed DeFi custody services such as Anchorage Digital and Copper have emerged in large numbers. Some credit protocols, like Maple, secure their Tokens on these licensed platforms catering to institutions.
All financing and payments are directly conducted on-chain between borrowers, special purpose entities, and investors. In the future, credit delegation protocols aim to integrate more decentralized identity (DID) protocols for asset verification. Subsequently, underwriters will be integrated as third-party risk assessment entities rather than the existing oracle systems.
Certain tokenized assets, such as real estate contracts, can be highly illiquid. Pool liquidity depends on the asset's tenure and the inflow and outflow of investors. Incentive models based on income can also stimulate liquidity.
Furthermore, protocols can collaborate with DEXs, AMMs, as well as other DeFi applications like Balancer and Curve to create liquidity.
One of the major concerns institutions have with DeFi is the lack of a standardized credit system, such as credit scoring. DeFi protocols use liquidity tokens as collateral to enforce repayment in the event of defaults. This eliminates credit risk but also restricts the number of possible financial products. Credit delegation protocols are employing complementary strategies to incorporate credit components into loans. Some protocols are also working towards bringing off-chain reputations into the on-chain world, while others focus on creating on-chain reputation systems.
Real-world assets (RWA) provide a unique opportunity for yield-starved DeFi investors to access a diversified off-chain debt market, while also enabling traditional financial institutions to tokenize and issue debt/assets without being restricted by geographical locations.
It can be foreseen that with industry development, the efficiency of capital flows will be greatly enhanced. In the future, every fund will be allocated immediately to the highest-yielding opportunities, adjusted for risk.
2.4 AI Strategy Technology
Strictly speaking, the AI strategy technology supported by Rambox is essentially more like Artificial Intelligence in General Computing (AIGC). It involves the system constantly filtering, extracting, analyzing, and generating new revenue strategies from a large amount of market information, and automatically executing them. The empowerment of AI in the financial industry strengthens risk management capabilities, promotes efficiency improvement, and creates a range of new products and services, reshaping the value chain of the financial industry.
In investment management, AI provides intelligent analysis and decision support capabilities for both core and supportive functions, enhancing the level of automation and creating new models for investment management. We have listed some application scenarios of AI in investment management to illustrate the current application status and future development trends.
In stock price forecasting, AI can expand the scope of analyzable data, improve prediction accuracy, achieve high automation of forecasting models, and reduce research costs for crypto projects. In sentiment analysis, AI can monitor investors' emotions from sentiment data and combine it with technical analysis methods to enhance asset prediction accuracy. Text analysis can be specifically used to analyze specific types of text, such as policy documents, to predict the policies or development trends of certain market sectors, thereby achieving the goal of predicting market trends.
In the early stages of protocol revenue risk generation, we can explain the authenticity of on-chain data to some extent by monitoring project protocol revenue. AI, in the process of identifying asset protocol revenue risks or fraudulent behaviors related to protocol revenue, will comprehensively and objectively analyze operational data, protocol revenue data, and other data of crypto projects. It evaluates the quality of protocol revenue data and identifies potential protocol revenue data fraud issues.
Generative AI will significantly improve the level of automation in basic investment management tasks, enhancing the efficiency of practitioners. Specifically, document organization can help automate tasks such as meeting summaries, crypto project reports, and research reports. Applications like code generation lower the access barrier to specific knowledge and skills, expanding the capabilities of researchers. Knowledge management will transform how practitioners learn and work, enabling them to efficiently grasp cross-disciplinary and cross-domain knowledge systems.
AI can enrich the data sources for project ratings, automate data collection processes and risk monitoring, and enable rating models to transition from static to dynamic.
In addition, AI-based strategy systems bring three major changes to the decentralized financial ecosystem:
In the era of artificial intelligence, the boundaries of fintech will continue to expand, creating more possibilities for financial services. The application of AI in the software and hardware of the financial industry will greatly enhance operational efficiency, reduce dependence on personnel for financial products and services, and further promote the efficiency improvement of financial operations.
The impact of AI on financial risk control can be divided into two aspects. On one hand, AI technologies like machine learning bring new risk control models, improving risk management efficiency and reducing implementation barriers. On the other hand, with the deep integration of cutting-edge technologies and finance, financial risks and technological risks intertwine and mix, increasing the stealthiness of financial risks. The integration of AI and other technologies with traditional risk control mechanisms can effectively manage risks arising from such technologies.
The powerful enablement of AI in finance will drive the transformation of financial services towards highly contextual and intelligent solutions, providing more room for imagination in financial products and services. Applications such as AI risk control, AI investment, and AI office automation will thrive in the financial industry.
Last updated