📃Litepaper
Overview of the most important concepts behind Haven1.
Introduction to Haven1
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 decentralized networks.
The requirement for participants to interact with anonymous counterparties and nascent smart contract technology without, for example, access to standardized modes of remediation or quality assurance, has limited the onboarding of both institutional capital and professional investors to the growing decentralized finance (DeFi) sector.
Without a concerted effort to address these challenges, the potential for blockchain technology to transform financial systems and enable greater access to financial services will not be fully realized.
A Secure Blockchain
Haven1 is a purpose-built, EVM- EVM-compatible blockchain that provides a secure environment for financial transactions on-chain.
Decentralized protocols are often subject to hacks, exploits, and other malicious activity that occur primarily due to poor governance on the part of operators and a lack of security standardization, coupled with an inability to identify counterparties. By enforcing network-level risk controls, Haven1 provides an ecosystem in which these malicious acts can be mitigated.
Haven1 users can be assured that prior to being approved and deployed, all protocols on the network will undergo multiple stages of comprehensive review. For finance applications, adherence to industry-leading standards is paramount. At Haven1, we don’t just use generic benchmarks; we meticulously embed best practices derived from leading global financial jurisdictions. Recognizing the significance of a robust financial framework, we incorporate protocols that are in strict alignment with standards set by internationally acclaimed financial bodies. This ensures that all transactions on-chain operate with high efficiency and adhere to the most stringent security and operational norms prevalent in the world’s top financial markets. In this system, users will undergo comprehensive identity verification to maintain trust and integrity in all dealings.
By providing an environment for participants to engage with on-chain protocols in a secure ecosystem, Haven1’s network-level permissions pave the way for institutional capital formation on-chain and eliminate many of the inherent risks that prevent professional and retail users from engaging in the Web3 ecosystem.
Built For The Future Digital Economy
Haven1 is a Proof of Authority (PoA) blockchain, emphasizing network-level risk controls and guardrails to ensure a high level of security and trust. It prioritizes creating a safe and secure network environment, with users undergoing thorough identity verification through third-party providers before engaging in on-chain transactions. This approach is integral to maintaining the integrity and reliability of the Haven1 network.
The provable identity framework in Haven1 offers users confidence in the security and integrity of their operations on the network.
This approach reduces the barrier to entry for new users in the Web3 space, fostering the growth and widespread adoption of on-chain finance.
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.
Validation Process
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.
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.
Validated By Reputable Partners
On Haven1, all validators will undergo a rigorous screening process to ensure they are trusted and reputable.
The initial genesis validators on Haven1 are selected based on their established public reputation and a proven track record of trustworthiness and integrity. These entities, recognized for their reliability, are tasked with ensuring the security and stability 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.
On Haven1, all validators will undergo a rigorous screening process to ensure they are trusted and reputable.
Attracting Institutional Finance
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.
Unlocking Innovative Use Cases
A key benefit of Haven1’s provable identity framework is the ability to enable new product use cases not currently possible on decentralized platforms.
On-Chain Lending
Haven1 revolutionizes the lending market by incorporating real-world credit scores as a form of reputation backing, akin to traditional loan risk management systems. This approach transforms how trust and credibility are established on-chain, enabling more secure and reliable lending practices.
Integration with real-world assets
Haven1 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.
Global exchange and settlement
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.
Secure And Private
Haven1’s aim is to address some of the primary existing deficiencies of on-chain finance and provide users with safe access to financial services. To this end, the network employs robust security measures, in combination with advanced smart contract architecture, a provable identity framework, and a strong focus on privacy.
For example, Haven1’s architecture enables the formation of dispute resolution mechanisms that allow users to seek recourse in the event of malicious behavior on the network.
This provides users with additional protections and assurances, which further increases user trust and confidence in the Haven1 network.
In addition, Haven1 implements best-in-class cyber security protection by leveraging advanced transaction filtering methods at the remote procedure call (RPC) level. This approach is complemented by sophisticated machine learning models and forms a layer of protection that proactively blocks malicious acts before they reach the validator.
A Blockchain You Can Trust
Safe and transparent storage of assets is of critical importance for Web3 platforms.
Haven1 employs a combination of cryptographic attestation of the custody of digital assets 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, such as 24-48 hour withdrawal waiting periods, introduce additional safeguards by providing a challenge window for network validators to identify malicious behavior.
Complementary to Ethereum
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:
The Haven1 Token
Governance
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.
Participation incentivization
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.
Gas fees
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.
The Haven1 Governance Model
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.
Development Team
The Haven1 blockchain is built by the team behind Yield App – a comprehensive, trusted digital wealth management platform where both retail and institutional investors can gain access to the highest quality yield-generating products in the digital asset space. Yield App’s core values correspond with those of the Haven1 Association and are centered around security, due diligence, and capital preservation.
This Yield App team consists of 70+ professionals with decades of expertise spanning traditional finance, technology, marketing, and business development. Since its public launch in February 2021, Yield App has grown to 90,000+ customers, including 1,000+ high-net-worth clients, who have entrusted Yield App with more than $550 million of their digital wealth.
The Haven1 Association has assigned Yield App as the network’s steward. The steward’s responsibilities include, amongst others, organizing the secure custody of assets, negotiating partnerships, driving business development, arranging identity verification solutions, and establishing trusted validator sets.
Yield App's stewardship of the Haven1 network is not a single point of failure; instead, it represents a critical methodology for maintaining network security and ensuring that all processes are aligned with the highest standards of integrity and reliability. This approach is key to upholding a secure and trustworthy environment within the Haven1 network. As such, the relationship with the steward is of key importance for maintaining the integrity of the Haven1 network.
To learn more about Yield App, head to the yield.app website or blog page. Follow the team on LinkedIn, Twitter, Discord, Telegram, and YouTube for all of the latest updates.
About Haven1 Association
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.
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