📃Haven1 Litepaper
Overview of the most important concepts behind Haven1.
Last updated
Overview of the most important concepts behind Haven1.
Last updated
The current landscape of blockchain security is complex and rapidly evolving. Despite significant advancements in the underlying technology, there remains a lack of clarity and consensus on the best approach for securing and decentralizing networks.
The requirement for participants to interact with anonymous counterparties and nascent smart contract technology without access to standardized modes of remediation or quality assurance, has created a playground fraught with hacks, scams and rug pulls resulting in billions of dollars worth of assets lost, and limited ability to attract retail, professional and institutional capital in a safe and scaleable way.
Without a concerted effort to address these challenges, the potential for blockchain technology to transform the underpinnings of most industries, will not be fully realized.
Haven1 is a REKT-Resistant EVM L1 blockchain meticulously designed to prevent onchain hacks, scams and rug pulls through network-level safety guardrails that connects verified users to verified builders so they can interact with complete peace-of-mind.
Most decentralized applications (dApps) built on permissionless blockchains have some level of finance integrated wherein digital assets of value change hands, thus creating opportunities for malicious actors to exploit user funds.
There is a clear opportunity in Web3 whereby providing a safe and secure blockchain ecosystem, free of hacks, exploits and malicious activity, can pave the way for all types of capital formation onchain and eliminate many of the inherent risks that prevent retail, professional and institutional users from engaging in the Web3 ecosystem, today.
Inability to effectively create and maintain enforced security standards and protocols
Unknown, unidentifiable counterparties
Poor governance on the part of operators
And even more risk pile up as many solutions are moving towards layer 2's/Rollups, that, at this time, pose both security & centralization risks from unproven, often centralized sequencer technology.
In order to solve the aforementioned problems, while maintaining decentralization, a blockchain ecosystem must be able to enforce security standards both prior to transactions reaching the network, but also within the consensus mechanism of the network itself.
A public-permissioned, proof-of-authority blockchain ecosystem that is built on existing, battle-tested technology and limits centralization risk by decentralizing the network with reputable 3rd-party validators.
Haven1 is a public-permissioned, EVM-compatible, Proof-of-Authority (PoA) blockchain ecosystem, that facilitates a "safe haven" blockchain environment wherein verified users can connect with vetted onchain applications, and interact without fear of hacks, scams and exploits.
All users and builders must go through a proprietary anonymized, yet verifiable identity verification process (KYC/KYB) wherein they must mint and hold a valid hPassport in their wallet in order to transact on Haven1, thus ensuring an ecosystem with complete accountability and verifiable counterparties.
The handling of sensitive information and the protection of user privacy are paramount, particularly regarding financial transactions. To this end, specific user details are not recorded on the blockchain. Instead, only the results of identity checks (i.e., verified or unverified) are stored, ensuring privacy while maintaining transparency and trust in the network's operations.
Prior to deployment, all builders of smart contracts on Haven1 must submit 2 (two) verified, 3rd-party audits from Haven1's approved auditor list.
To ensure the audits have been completed and no code has been changed, all smart contracts are diff checked against the audits, and deployed in a permissioned manner on behalf of the builder.
As a permissioned blockchain, all remote procedure calls (RPCs) are permissioned and thus, can enforce two-factor authentication (2FA) at the network level. This means that users of Haven1 can opt-in to standard 2FA that protects their assets held on Haven1 from private key and seed phrase theft. A feature no other network offers today. Recovery can be completed in conjunction with verifiable identity using their hPassport.
Haven1 also works with dedicated 3rd-party partners to offer additional wallet services such as:
Multi-signature wallet for institutions or businesses managing captial onchain
Rule & anamoly-based transaction monitoring and flagging to prevent unknown movement of funds from wallets.
In partnership with dedicated onchain threat and anamoly detection partners (i.e., Network Guardians), AI-powered bots comb the network 24/7 checking:
Transaction Analysis: Monitoring all network transactions for signs of malicious activity like double-spending or high gas fees.
Smart Contract Monitoring: Vigilant observation of smart contract interactions to identify vulnerabilities like reentrancy attacks.
Price Manipulation Surveillance: Overseeing potential manipulation within DEXs or oracle services to maintain asset pricing integrity.
Flash-Loan Attack Prevention: Detecting large-scale, rapid transactions to prevent market manipulation.
Event and Call Trace Analysis: Analyzing smart contract-generated events and call traces to identify irregularities or malicious activities.
As the network safety-net, 10% of all application fees paid to governance go to a multi-asset managed reserve fund, to be used exclusively for payouts resulting from dispute resolution.
At blockchain genesis, Haven1 will initially designate 7 (seven) highly-reputable and globally trusted businesses as the Validator Partner council. Each validator will undergo a rigorous screening process to ensure they are trusted, reputable, and capable of executing on the necessary functions to validate on Haven1.
These entities, recognized for their reliability, are tasked with ensuring the security, stability and decentralization of the network. In return for their role in safeguarding Haven1, these validators receive a portion of the fees from each transaction. The distribution of these fees to validators is determined through governance voting, allowing for flexibility and adaptability over time. This system ensures that the network remains robust, secure, and consistently managed by reputable entities.
This process of selecting and screening validators helps to remove the risk of malicious behavior on the network and ensures that Haven1’s validators are committed to maintaining the security and integrity of the network.
PoA networks are secured by a carefully selected group of validators, who validate all transactions on the chain.
In addition, in the interests of transparency, all validators on Haven1 will be publicly verifiable, allowing anyone to corroborate their identity and track their performance on the network.
This process of selecting and screening validators helps to remove the risk of malicious behavior on the network and ensures that Haven1’s validators are committed to maintaining the security and integrity of the network.
One of the most unique features to Haven1 is that Validators hold the keys to the secure Haven1 bridge, ensuring that no single entity has the power to control access to and from the network. This distributed control mechanism is a cornerstone of Haven1’s decentralized design.
A common misconception in the blockchain community is that the more validators a network has, the more “decentralized” it must be. This oversimplification overlooks the complexities of how these networks are managed and governed. For example, many Layer 2 (L2) solutions, often perceived as decentralized because of the underlying layer 1 blockchain they are built on, are ironically controlled by a single, centralized sequencer in a permissioned manner, thus creating centralized risk. Even some of the more prominent L1 networks that claim to be Proof-of-Stake (PoS) often rely on Delegated Proof-of-Stake (DPoS) to achieve scalability. This results in a scenario where a small group of entities, typically around 15-20, end up controlling the majority of the network’s validation power.
Haven1 intentionally adopts a permissioned Layer 1 (L1) approach to enhance security and operational control without compromising decentralization. By controlling network access through permissioned RPCs, Haven1 enables advanced features like gasless transactions and enforced smart contract audits that are otherwise difficult to implement on permissionless ecosystems. Instead, on Haven1, the network’s access and bridging are managed by seven distinct validators rather than the Haven1 Association. This design decentralizes risk, ensuring no single entity can unilaterally control the network, which effectively mitigates centralization risks.
The short answer is no, and here’s why.
When you look at important bills like H.R.4763, it defines "decentralization" as:
"no person has unilateral authority to control the blockchain or its usage, and no issuer or affiliated person has control of 20% or more of the digital asset or the voting power of the digital asset."
With 7 validators decentralizing the network access, this ensures that control is (at a minimum) 1/7 or ~14%, which is materially under the 20% threshold.
Less Validators = More Fees per Validator, More Fees = More Incentives to Promote Haven1: Having 7 validators ensures aligned economic incentives that gives validators more revenue as the network grows. Since application fees are split among only 7 validators compared to a growing number of nodes on Proof-of-Stake networks, there is more economic upside, motivating them to promote and grow the network actively. This is a significant economic advantage compared to other PoS networks.
Economically Viable Gasless Transactions: Haven1's gasless network provides significant value to its users. This is possible because Haven1 doesn’t need to generate the typical 3-7% return on staked capital required by most PoS networks to incentivize stakers. Instead, Haven1 adopts a more robust fee model where dApps (or hApps in the case of Haven1) can charge for high-value transactions while offering low-value transactions for free. With fees shared among only 7 validators, even proportionally lower fees can effectively offset the cost of supporting these gasless transactions.
The validator set has the flexibility to vote in additional, reputable validators as needed. This ensures that the network can continue to grow and adapt, bringing in validators who can drive real economic value to the Haven1 ecosystem
Proof of Authority (PoA) is a consensus mechanism that emphasizes the value of identity and the reputation of block validators. In Haven1’s network, validators process transactions similarly to other PoA networks, while ensuring all counterparties are valid and verified through it's proprietary hPassport technology directly integrated into the consensus mechanism.
During the transaction process, validators perform a vital task by aligning the user’s wallet address with anonymized data on the blockchain. This step is essential in upholding the network’s integrity and reinforcing user trust. The process embodies strong measures in deterring illicit actors from interacting with Haven1 blockchain, thereby ensuring the network's security and steadfast reliability.
If a user has not completed the necessary identity verification, the validator will not process the transaction, and it will not be executed on the network. This policy is in place to uphold the network’s standard of security and trust.
In cases where a user’s status changes in a way that might affect network integrity, the network will only process requests to withdraw assets. This measure is to protect the network and other users, ensuring that all interactions are secure and reliable.
Safe, secure and transparent asset bridge is of critical importance for Web3 platforms.
Beyond decentralizing access to reputable validators, Haven1 employs a combination of cryptographic attestation for digital assets stored in the secure asset bridge and a corresponding audit of user liabilities. This method enables users to utilize existing assets from a variety of alternative blockchains providing they are whitelisted for onboarding and approved by Haven1 Governance.
A key challenge with existing cross-chain network implementations is the reliance on automated bridging solutions. As many bridges implement experimental code, often in the pursuit of expediting settlement, the potential for capital losses due to smart contract failure and exploits is high.
Haven1 addresses this challenge by partnering with established, reputable entities to ensure every asset on Haven1 is backed 1:1 by the corresponding underlying asset and will be redeemable at all times. This enables users to securely and transparently store their assets on Haven1 in cold storage and provides an additional layer of protection against hacks and other exploits.
Further security enhancements can be placed on withdrawal when anomalies are detected such as time-based withdrawal waiting periods, two-factor authentication and liveliness tests introduce additional safeguards by providing a challenge window for network validators to identify malicious behavior.
Haven1 is a complementary blockchain that is designed to support the Ethereum network as a side chain.
Haven1’s long-term objective is to transition from a side chain directly into a rollup utilizing Ethereum as the settlement layer. While there have been promising improvements in both optimistic and zero-knowledge rollups, it is important to note that this technology is nascent with limited time in production. It is therefore unsuitable to adopt at this time given Haven1’s primary focus on security and reliability.
By providing a secure environment for onboarding new users into the Web3 ecosystem, Haven1 is able to effectively support and help grow the Ethereum network. Haven1 firmly believes these attributes make it a valuable addition to the Web3 ecosystem.
To demonstrate Haven1’s commitment to both Ethereum and the ongoing contributions of the Ethereum Core Development Team, the Haven1 Foundation (“Foundation”) will provide donations to the Protocol Guild on an annualized basis. It is a core belief of the Foundation that the tireless efforts of the Ethereum Development Community should continue to be recognized and well-supported.
Learn more about the Protocol Guild here:
Haven1 token holders help to shape the direction of the protocol through the utilization of voting rights. They will be able to contribute to important decisions and proposals that affect the operation and development of the network. This decentralized governance model helps to ensure that the interests of Haven1 token holders are represented in a fair and transparent way.
Governance rights extend to three core network-native protocol applications: an automated market maker, a money market (borrowing and lending), and a derivatives platform.
Haven1 token holders will have the opportunity to receive rewards generated by the aforementioned protocol applications. This provides users the benefit to holding the token and aligns the interest of the token holders with the network.
Users will require the Haven1 token to conduct certain transactions on the blockchain. A feature unique to the Haven1 blockchain is the introduction of an application-specific transaction fee. For example, asset transfers between accounts will have no charge, however, swapping an asset on an automated market maker will incur an application fee.
Application fees represents a paradigm shift in how blockchain ecosystems incentivize and remunerate developers and creators. Rather than incentivizing developers to create gas-inneficient contracts to extract value from their users, Haven1's application fee model provides builders with the ability to charge a dollarized fee, paid in the native Haven1 token. This not only decouples builders from the volatility of the underlying gas fees and token price, but has many other sustainable benefits including:
Developer Autonomy: Developers have the flexibility to set their fees, allowing them to tailor pricing strategies according to their application's value proposition and target audience.
Revenue Generation: From the onset, developers can generate income, creating a sustainable model that supports ongoing development and innovation.
Ecosystem Health: These fees contribute to the overall health and maintenance of the Haven1 ecosystem, incentivizing network validators and supporting infrastructure costs.
Dynamic Management: Haven1's FeeContract dynamically manages these fees, ensuring adaptability and responsiveness to market conditions and network needs.
Haven1 introduces a unique proposition where the core protocols are owned by the Haven1 community (i.e., network), addressing key liquidity and availability challenges in the Web3 space while enhancing the utility of its native $H1 token.
All the essential pillars of DeFi infrastructure - the AMM, Lending & Borrowing protocol, the Derivatives platform, NFT marketplace and Account Name Service are owned by the Haven1 community and accrues fees and rewards to H1 token holders.
The purpose of Haven1 Governance is to provide a decentralized mechanism for making decisions and proposals that affect the operation and development of the Haven1 network. Haven1 token holders will be able to vote on these decisions and proposals, ensuring that their interests are represented in the decision-making process.
All governance decisions in Haven1 must achieve complete consensus among network validators. This unanimity is vital to ensure that any changes align with the platform's goal of providing a secure environment for on-chain finance, emphasizing the network's integrity and stability.
The Haven1 governance model is designed to allow the network to adapt and evolve in response to changing conditions. For instance, as market dynamics shift, the governance structure can implement modifications to the network, ensuring it remains relevant and effective in the evolving financial landscape. This flexibility is a key advantage, allowing Haven1 to stay at the forefront of on-chain finance.
In addition to its role in decision-making, Haven1 governance can also be used to propose and implement new features and upgrades to the network. For example, token holders may vote to add new protocols or applications, or to make changes to existing ones. This allows Haven1 to continuously improve and expand, providing users with a more robust and comprehensive platform for on-chain finance.
At its core, Haven1 governance stands as a vital instrument for steering the network towards the future. It ensures the platform stays attuned to the desires and necessities of its user base, upholds the segregation of client assets, and integrates checks and balances to amplify the security of the network.
A key benefit of Haven1’s provable identity framework (hPassport) is the ability for developers to tap into data that enables new product use cases not currently possible on decentralized platforms.
Builders can leverage the hPassport to incorporate real-world credit scores as a form of reputation backing into lending markets, akin to traditional loan risk management systems. This approach transforms how trust and credibility are established onchain, enabling more secure, scalable and reliable lending practices.
Integration with real-world assets
Haven1 cost-effectively enables integration with real-world assets where proof of identity is required. It can, for instance, facilitate the introduction of investment vehicles backed by real estate assets, leveraging non-fungible tokens (NFTs) on-chain to represent ownership of specific properties.
Tokenized digital representations of assets, such as securities and bonds, become possible in this environment, enabling exchange and settlement with greater efficiency at a global level.
Better Risk-Adjusted Returns Tokenized Money Market Funds in DeFi
Regulated tokenization platforms can effectively enable verified users that meet their regulatory requirements to purchase tokenized money market funds and/or other RWAs with stables. Users can then leverage DeFi looping (i.e., borrow and re-lend) to increase the adjust-returns against the money market fund securely on Haven1.
Compliant Prediction Markets Out-of-the-Box
The prediction markets sector has the potential to thrive in web3, but it will face significant challenges regarding regulatory compliance, especially in regards to letting underage users bet or in some cases and specific country related laws.
Ensuring compliance with age and location restrictions is complex and often requires extensive user verification processes. Traditional methods are cumbersome, pose privacy risks, and are difficult to integrate seamlessly into decentralized applications. As a result, many prediction markets struggle to operate legally and efficiently, limiting their growth and adoption. The inability to verify users' details in a streamlined manner creates barriers to entry and compliance issues.
The hPassport allows for seamless verification of users' age and country of residence for any application at ZERO COST - they not only get the KYC for free, but they don't need to hire skilled workers to handles KYC operations. This ensures that prediction markets can operate within legal boundaries, providing a secure and compliant environment for all participants.
More Flexible Business Models Out-of-the-Box The gaming industry has been a pioneer for web3, yet we see that most games are limited in terms of how they can monetize, which is through NFT sales. Many smaller tier gaming companies struggle with monetizing their business because they have the games, but they don't have the resources to build complex financial smart contracts.
A a result many games are limited to only monetizing through the sale of NFTs, something that is not only difficult to build and very limiting, but also requires a significant amount of additional education to their users base.
Haven1's unique application fee model provides developers with a toolkit that they can charge dollarized fees for various interactions with their application. This unlocks business models such as subscription-as-a-service, buying extra live/perks/levels, something that would otherwise require complex smart contract development, audits and technical know-how to ensure the safety of the financial contract. Large gaming studios may already have these types of teams in-house, but this opens the doors for developers of all sizes to monetize from day one.
Bonus Haven1 is a gasless network, which allows users to transact on chain within the game for free on certain application-level featues, enabling a ""Freemium"" business model that is otherwise impossible on other chains due to gas costs."
Haven1 connects professional investors to the world of on-chain finance, offering efficiency and innovation while ensuring financial integrity and customer protection.
Built for all, but tailored to provide the necessary frameworks and guardrails for institutional and professional investor adoption, Haven1 is dedicated to building and maintaining a secure, efficient, and trusted ecosystem that meets the needs and objectives of professional and institutional on-chain investment activities.
The global market capitalization of traditional financial assets is several hundred trillion dollars. By eliminating many of the key challenges prohibiting participation in on-chain finance, Haven1 paves the way for the efficient formation of institutional capital in Web3.
The Haven1 Association (“Association”) is a crucial component of the Haven1 network. It is a neutral entity that is responsible for ensuring the continued adoption and development of the network.
One of the key responsibilities of the Association is to engage in outreach activities. This includes working with the broader blockchain and Web3 communities to raise awareness of Haven1 and to educate potential users about the benefits and features of the network. The Association will also work with developers, businesses, and other organizations to encourage the adoption of Haven1 and to support the growth of the network’s ecosystem.
In addition, the Haven1 Association will provide grants and support to developers who are building on the Haven1 network. This will include funding and resources to help developers create new protocols, applications, and other innovations on the network. The Association will also work with developers to provide guidance, mentorship, and other support to help them succeed on Haven1.
As one of the initial genesis validators on the Haven1 network, the Haven1 Association will play a pivotal role in the operation and security of the network. Their involvement is crucial in maintaining the network's alignment with global best practices, ensuring its ongoing integrity and efficiency.
