Cryptocurrencies are programmable money. This simple yet powerful fact allows payments to be sent across borders, smart contracts to work, and DeFi to exist. While many projects solve very complex problems, GEEQ has quietly filed for a blockchain patent that may bring a more simple solution to a problem that concerns every crypto user. Using GEEQ’s Proof of Honesty protocol, the team has created a new way to simplify transferring cryptos or digital assets from one account to another.
The current family of smart contracts on blockchains, unfortunately, are not very smart. Simple functions like swaps and timelocks are commonplace, but more complex operations are challenging to create. GEEQ’s increased programmability allows it to create two new kinds of financial instruments to ensure that tokens are used for specific purposes.
The first of these instruments are bearer tokens. Bearer tokens can be represented by a simple dataset, such as a text file or a PDF, that transfer the value of a cryptocurrency, token, or data item on a (Geeq) blockchain to another user. Redeeming the PDF would access a set amount of tokens, independent of the user owning a crypto wallet. In other words, bearer tokens will allow someone to send or receive crypto without bothering with an exchange. Gift cards work similarly, simplifying the gifting of currency.
Building on this concept is certified tokens. Certified tokens have several advantages. First off, they can be tied to real-life assets that have been tokenized. Tokenizing a car’s title, putting it on the blockchain, and then transferring it to someone else simplifies to traditional paper-based approach.
In addition to this, certified tokens can be programmed with specific functions by the sender. A token might be spendable by a particular person, with a designated merchant, or expire after a set amount of time and return to the sender. Limiting the use of a token would create the equivalent of a certified money order or check, ensuring that the crypto is used for a single purpose. It also acts as a security measure; if the data representing the pre-issued check is stolen and the thief tries to cash it, the value still goes to the intended recipient.
Placing restrictions on tokens could solve the issue of rug pulls that have been plaguing the DeFi community. A founding dev can currently remove all deposits from a yield farm, including reward tokens and liquidity, if the smart contract allows it. At the moment, smart contracts are difficult to read, let alone decipher. If a specific token can only be transferred between a user and the smart contract, there is no risk of moving off-exchange or otherwise stolen. Placing usage limitations and time restrictions on coins would make stolen crypto useless to a thief and return the stolen tokens to the rightful owner after a specific amount of time.
The recent use of Binance Smart Chain has made this problem more prevalent, as several rug pulls have occurred on the blockchain in the past week. One team, Beefy Finance, has even released a rudimentary tool to revoke yield farms permissions to stop this trend. The fact that it took multiple scams to mitigate the issue demonstrates how early this blockchain technology is.
By offering increased user tools, crypto that can be redeemed by only one person or corporate entity could encourage mainstream adoption. Users might be more willing to use crypto if they knew it could be spent only by the designated recipient. Until other smart chains build in this functionality, we will likely need to wait for GEEQ to launch its MVP to gain advanced security permissions for our cryptos.
*Disclaimer – GEEQ is our Media Partner, and this content is made possible with their support. The above article does not represent financial, investment or trading advice and we do not recommend the purchase of any cryptocurrency or product without consulting a financial aid. The Daily Chain strongly encourages you to do your own research before making any investment decisions.