5. Kivachain Ecosystem

5.1 Kiva Agriculture

Traceability allows farmers to confidently prove that their foods are safe and of high value and unrelated from any ongoing food safety incident. Thanks to its immutability, non-intervention and high security, Blockchain technology can significantly resolve this problem, and there is no doubt that the technology is a must for modern agriculture. Therefore, the methodology and the assumption is: "Why should blockchain technology be applied in agriculture"?

In this day and age, consumers are increasingly becoming concerned with transparency as they take a growing interest in the origin of products as well as the ethical practices of those they buy the product from. In particular, many countries and regions have developed a legal framework for traceability to address customer demand, knowing that traceability is vitally important for food safety and operational efficiency. Traceability systems vary widely in their scope and sophistication. However, the current QR-Code based traceability system poses certain limitations such as: inadequate published information in the whole chain; not cross-checking information and connecting information amongst the involved parties; lack of common identification system for products, agents and production areas; intransparent and unverified information, and numerous others. In order to thrive and perform effectively, however, end-to-end traceability systems rely on a multitude of factors, from physical infrastructure to technological capacity and data-use regulations, many of which are nascent in developing countries

Currently, most of the traceability management procedures are still facing bottlenecks and yet to be secured given the still widespread use of paper-based data storing, and manually creating QR Codes and producing stamps. Storing data and information in a paper-based system allows data to be changed easily, not to mention the fact that traceability stamps can easily be falsified or counterfeited, thus confusing consumers. In terms of data privacy and transparency, the traditional traceability methods possess a higher risk of the information being altered or wrongly recorded along the value chain as it is manually conducted. As the consequence, the traceability results that reach the end consumers are likely to be improper and inauthentic

5.1.1 Kiva Agriculture - Innovation of traceability

Blockchain for Agriculture

The above illustration is the journey of the fruits from the farm to the shelves of a supermarket, ready for consumer purchases. Although it appears to be simple, there are countless steps and many parties’ involvement along the chain.

• The farmers plant the seeds. It grows into a tree, then it is fertilized, watered and starts to produce juicy fruits, which are later harvested by the farmers.

• The fruits are first transported to the warehouse, then the supermarket.

• End consumers can buy the fruit on the shelves of the supermarket.

There is nothing wrong with this model, except for the information and the connection among related parties. For example, the supermarket sometimes finds difficulties checking the quality of the fruit before selling it to the end consumers. They cannot know exactly whether the products are properly nurtured, harvested, and how long they are being kept at the warehouse, etc. unless other parties (like the farmers, carriers,...) show them the record, however, there is no guarantee that information is precise. This is where the technology establishes its usefulness even in such a traditional industry like agriculture. This is why blockchain can be a disruptive technology. The success of Kiva Agriculture has proved the feasibility of applying blockchain across agriculture production processes. The idea here is to apply the blockchain technology to keep track and store all of the information on the blockchain.

Applying blockchain from farm to shelves

By embracing blockchain in food traceability, the process maintains the same, however the information stored on the blockchain appears to be more secure, unchangeable and transparent. It thus helps reduce the amount of time required to source comprehensive information on suppliers and communicate this back to consumers, thereby providing a myriad of benefits for all the involved parties. For example, the farmers do not need to keep track manually of how they nurtured the fruit to show to the buyers, instead they can scan the QR code after fertilizing the tree to record the time, the type of used fertilizers, and those information will transmit directly to the blockchain to be permanently stored. It is also much easier for the warehouse to manage the inventories as they can verify in real-time how many fruits remain or from which farms they are. Even the end consumers can benefit from this technology since they can track product information throughout the supply chain by just a simple scan using their smartphone, influencing their buying decision.

5.1.2 Product Description

Kiva Agriculture solution provides on the platform of mobile software (including Android & IOS), Blockchain Enterprise main website and system used to connect units to participate in the product traceability processes according to GS1 global standards (Global Standard 1). The solution allows access to product information along the value chain, from the production process to the consumption stage, thereby helping farmers, cooperatives, consumers and markets get updated with the transparent and real-time information about the product, further contributing to the increase in consumer confidence and the value of goods

Some of the fundamental benefits that the solution can bring to involved parties include:

• Information transparency:

  • The solution clearly shows the origin of the product, the authenticity as well as certified information.

  • Counterfeit products can be easily and quickly identified.

  • The means of direct communication (suggestions, orders, ...) between consumers and manufacturers are enhanced.

• Global scope:

  • Production processes are standardized based on the global standards towards export and international integration.

  • The exported products meet the requirements of international traceability.

  • Traceability can be done anytime and anywhere without any constraints.

• Value added:

  • The solution is an integral part of the value chain, helping to increase the value of agricultural products based on information transparency and corporate responsibility

To achieve these goals, Kiva Agriculture solutions aim to develop a comprehensive traceability solution utilizing the power of blockchain technology. This blockchain-based software allows the information constant updates and management from the manufacturing process to the consumption stage, which will in turn help farmers, cooperatives, consumers and markets get access to transparent information of products, contributing to the increase in terms of the value of agricultural produce. Kivachain Agriculture solutions include the following applications and platforms:

Enterprise Blockchain platform and supporting tools

Figure 3: Kiva Agriculture transaction detail

Kiva Agriculture solution is considered as a breakthrough amongst other traditional and paper-based traceability solutions. Blockchain technology has the power of ensuring data immutability, which is the foundation for fast, transparent and traceable information retrieval. Kiva Agriculture builds a private Blockchain network based on the advantages of existing Blockchain systems, thereby solving the problems of the speed of processing and scalability of the public Blockchain type.

• Private Blockchain platform, suitable for enterprise deployment.

• Support smart contracts.

• Ability to handle large volumes of transactions.

• Focusing on improving data privacy by means of TPL (Transaction permission layer) and ZKP (Zero-knowledge proof)

• Tools to search/collate Blockchain information and display in a form that consumers can read and understand

Application used for managers

Kiva Agriculture management screen

This is a Web-based application of Kiva Agriculture that helps cooperatives / businesses manage their households/members and products:

• Manage identification information in a variety of ways: Account - Password, Cryptography (Public key - Private Key)

• Register the production process (including steps, description, certification,etc.)

• Manage product categories

• Manage & print your own stamps

• Farm management

• Crop management

• Management diary production and consumption

• Manage product path

• Manage the displayed information on the product information lookup page

• Business information statistics (number of households / crops / products / stamps / ...)

Application to input and manage product logs through IoT devices and mobile handsets

Figure 5: Kiva Agriculture end-users screen

This is a mobile application of Kiva Agriculture (supporting both Android and iOS) that allows farmers/ cooperatives / carriers to enter information corresponding to their roles in the production processes.

• Enter steps in the production / consumption process.

• Manage product and crop information.

• Receive notifications, information.

• Activate stamps on products (for Cooperative users)

• Scan QR codes on crops and products to look up information

Application to look up product information via Web page (landing page)

Kiva agriculture end-users screen

The application works on the Web platform of Kiva Agriculture, enabling consumers to use any QR code scanning application to access, search for relevant information and provide feedback on products.

• Look up product information and collate on the Blockchain system.

• The lookup page can be customized to display under the brand identity of the Cooperative / Enterprise.

• Feedback directly from consumers.

• Order products directly from consumers.

• Scan the QR code with the application without installation.

5.1.3 Blockchain Structure

Blockchain will be implemented for two purposes:

• Token transaction ledger

The token payment solution will be implemented on a public network using Kivachain token, an ERC20 token.

• Traceability transaction ledger

Transactional and food related information will be stored on a private blockchain, and will be driven by an internal technical token: the Transaction token

Supply chain companies will have

• Kiva wallet on the public network, which can be accessed directly or through the Kiva Agriculture mobile app

• a Transaction wallet on the private network, which can be accessed by the Kiva Agriculture B2C mobile app.

Utility token

Toll: To utilize Kiva Agriculture blockchain recognizability record, inventory network members should pay for exchanges utilizing the token.

Value exchange: There is a lot of information provided by certain types of supply chain companies, which is valuable for other supply chain companies. (Example: if and when a calf was treated with vaccines or antibiotics is a valuable information for the cattle farms which buy the calf. Normally they don't have this information, and they needlessly treat the animals with vaccines and antibiotics. This can lead to overuse of antibiotics. If they can get this information for a cheap price, the cattle farm can avoid the redundant activity, thus saving money. This income goes to the information provider (the calf farm).

Value exchange: Consumers get tokens as a reward for using the Kiva Agriculture consumer mobile app in retail, reading the QR code and viewing the food history, this way, the system encourages conscious consumer behavior. Consumers can use the tokens to order food analysis services. They package a part of the food product and send it to Kiva Agriculture, and they get the results of the food analysis in electronic format.

Right: Token holders can rate supply chain companies with which they are in connection, so the system can maintain a supply chain company scoring system.

Token Supply

Before the token sale, 1 billion tokens will be generated.

• Public token pool: 500 million tokens will be in the public token circulation (400 million offered in the public sale, 100 million to marketing, proof-of-care, advisors, cafeteria pool).

• General reserve: All remaining 500 million Kiva Agriculture tokens will be held in a General reserve.

As the number of Kiva Agriculture customers grow, they will require more transactions, thus, more tokens. At the same time, certain participants of the ecosystem will staking tokens, and some wallets are lost or forgotten, which will limit the supply.

Kiva Agriculture doesn't want to endanger the core activities of Kiva Agriculture, that's why in certain times, we maintain the right to release tokens to the market from the General reserve beyond the 500 million limit. However, the released excess amount will be justified by the need for the tokens in the circulation. Finally, when Kiva Agriculture grows further, all 1 billion tokens will be on the market, which we believe will be sufficient for long term operation.

Token Economy

Buying traceability transactions

• Supply chain participants indicate the number of transactions they want to buy in the Kiva Agriculture B2B app.

• To cover the cost of the desired number of transactions, they can buy Kiva Agriculture Token for fiat money or ETH on the Exchange, and store it in their Kiva Agriculture wallet.

• The smart contract automatically deducts 10% of the Kiva Agriculture tokens, and 9% is exchanged to transactions on a fixed exchange rate for supply chain reimbursement (See the Reimbursements process), transfers 1% to the Kiva Agriculture Consumer Rewards wallet. Exchanges the tokens to transactions on a fixed exchange rate, the remaining tokens are distributed to the solution provider.

• On the private blockchain, Kiva Agriculture deposits the purchased transactions to the supply chain participant's Transaction wallet.

Reimbursements

1. Each time a supply chain participant buys transactions, 9% is exchanged to transactions on a fixed exchange rate for supply chain reimbursement.

2. Daily once, an algorithm selects the supply chain companies to share the tokens.

3. On the private blockchain, Kiva Agriculture automatically deposits the transactions to the selected supply chain members' transaction wallet.

Paying for value added information

1. Production network organizations (esteem suppliers) can set a cost/thing on explicit food related information they give.

2. On the off chance that other production network organizations (the purchasers of the worth suppliers) need to get those data, a savvy contract deducts the complete value (esteem added data cost duplicated by the actual number of the got followed merchandise) from their Kiva Agriculture wallet, and moves the Kiva Agriculture token to the worth supplier's Kiva Agriculture wallet.

Rewarding conscious consumers

1. Consumers check the Kiva Agriculture tracked food product's QR code using the B2C mobile app.

2. A smart contract automatically transfers a pre-specified amount of Kiva Agriculture tokens from the Kiva Agriculture Consumer Reward wallet to the Consumer's Kiva Agriculture wallet as reward.

Selling tokens

1. Supply chain participants and consumers can sell their excess tokens on the Exchange for a desired rate. It creates a selling offer on the Market.

2. Buyers can buy tokens on a desired rate, when they match, the deal is written in a smart contract.

3. The seller's Kiva Agriculture tokens are transferred to the buyer's Kiva Agriculture wallet.

5.2 Kiva Wallet

Blockchain is growing as a promising technology with highly beneficial applications for both consumers and businesses. However, the more blockchain grows in popularity as an innovation, the more disconnected the global blockchain ecosystem becomes. There is currently close to zero interoperability between different blockchain platforms. In many ways, the risk of using blockchain technologies and cryptocurrencies is too high. Overall, these kinds of problems have put a stop to blockchain mass adoption.

Our main goal, consequently, is to construct a definitive arrangement that will at last make the best blockchain experience for clients.

By settling client experience difficulties in the digital currency world, Kiva Wallet intends to fabricate a missing norm for customers and organizations in the blockchain space, making it as upbeat and helpful as the customary fiat-based frameworks.

Starting today, Kiva Wallet Ecosystem has assembled an enormous purchaser base of 400,000 wallet clients around the planet, just as more than 50 significant dapps and administrations installed. Using the adaptable foundation of Kiva Wallet for client commitment, Kiva Wallet App Square for decentralized application advancement, Kiva Wallet Blockchain Platform for application improvement, and Kiva Wallet PAY to encourage consistent installment between parties, our environment is inviting an extraordinary number of new individuals and administrations regular.

Over our organization's activities, we have come to comprehend the solid future development of Kiva Wallet is to convey more noteworthy dynamic capacity to the Kiva Wallet people group just as to empower a consistent installment experience and a successful income structure for environment players. The motivation that local area input gives to us decidedly affects our business and on our item. Besides, we perceive that a framework that associates outsider applications with networks requires a monetary model that impetuses the most dynamic and dedicated clients in a straightforward way.

We are building up the Kiva Wallet Token to this end. This paper is intended to give a prologue to this token and to the Ecosystem to which it will contribute. Kiva Wallet Token will be disseminated and recorded on trades not long from now.

5.2.1 Kiva Wallet Ecosystem as a starting point

Kiva Wallet was initially developed to be a single, universal wallet that could be used to store any cryptocurrency. Today, it serves this purpose extremely well. Not only has it proven itself to be an effective, easy-to-use wealth management solution for blockchain users in possession of a wide diversity of assets, but it has also set a new standard for security in the industry. Over time, an entire Kiva Wallet Ecosystem has formed and provided a number of exciting features that are hardly seen in other projects. Now, regular blockchain users are empowered not only to store their tokens, but also to purchase them in both primary and secondary markets. In the Kiva App Square, users can access Dapps and blockchain services, using cryptocurrencies to carry out payments in just a few clicks with Kiva Wallet PAY. On the other side, blockchain developers can simply develop their decentralized applications with ultimate efficiency on Kiva Wallet Blockchain Platform, and promote it with a massive user community on Kiva Wallet. This makes the Kiva Wallet the world’s most powerful gateway to blockchain for any party.

Universal Crypto Storage

Active users of cryptocurrencies often find it necessary to keep their funds in multiple locations. When frequent trading is required, keeping tokens on an exchange may be more financially efficient than withdrawing them into a wallet. Then, different tokens with different functions and purposes - and which may have been issued on a diverse array of blockchain platforms - may have to be kept in separate wallets. Kiva Wallet is a multi-wallet and multi-asset solution that enables users to store multiple wallet addresses and exchange API keys from different blockchain platforms within a single software product. Once imported, users can view balances and carry out transactions from all addresses on one, easy-to-use dashboard. Down the line on roadmap, the wallet will also be compatible with hardware-based token storage solutions (hardware wallets).

Streamlined payments

Beyond just storing the tokens, the Kiva Wallet solution has been designed to solve a number of pain points experienced by users while they are executing payments. Overall, we envisage our solution as a way to empower users to enjoy a real sense of freedom, convenience, and safety while using blockchain. Lower fees: Kiva infrastructure ensures lower fees for consumer transactions and Kiva users often find themselves having access to special discounts. Faster transactions: the Ecosystem also features the Kiva Pay that allows for instant transactions and for the introduction of new categories of financial services. Interoperability: owing to Kiva integrated exchange platform users can quickly and easily access any service, no matter the token they are currently holding. Additionally, integration with other leading blockchain interoperability solution providers, Kiva acts to increase the level of transparency and safety for cross-chain transactions executed from the Ecosystem. Verification of token smart contracts and dapp providers: to ensure users are fully protected when interacting with the Ecosystem, Kiva makes its very best effort to verify token smart contracts for all wallets and listed Dapps and service providers on the Kiva App Square.

5.2.2 Kiva Wallet App Square

One of the major conditions that must be met in order for digital ledger technology to achieve full mainstream adoption is the creation of an easy access point for decentralized applications (Dapps) and blockchain-powered services. Until now, there has been no single, secure hub where these applications can be accessed seamlessly. Kiva App Square is that hub. Accessible by clicking a tab at the bottom of the wallet’s home screen, the Kiva App Square is a built-in browser for blockchain applications. Dapps currently available from the browser fall into the following categories: Exchanges, Games, Finance, Compliance, Utilities. More categories (including Hardware wallet, VeriSign services, Payment, etc) and Dapps are coming soon

5.2.3 Convenient and Secure Token Sales Participation

As a wealth management solution, Kiva Wallet offers extensive support for utility tokens, including those issued under the ERC-20 and NEP-5 standards and on the Konla platform. Additional standards are being added on a monthly basis. Kiva is clearly differentiated from other utility token storage solutions in that it offers an infrastructure for immediate participation in token sales opportunities (such as Initial Coin Offerings and other forms), as well as a host of tools and services that startups can use to reach out to the Kiva community. We refer to this as the Community Outreach Platform. In order to participate in a token sale that is supported by Kiva, the user can click on the applicable token on the Kiva home screen. Through an extremely simple procedure, the user is guided through the KYC process. Once onboarded, the user can make a payment immediately.

Security Token Storage and Investment

Unlike with cryptocurrencies and utility tokens, the compliant issuance and trade of on-chain securities strictly requires that certain stern compliance requirements be met. Some of these requirements, such as investor identity information, must be met off-chain. Others can be recorded on-chain, but with functions that are not included in the ERC-20 token standard. Kiva Wallet security token and transfer feature will in the near future support multiple security token protocols on a number of blockchain platforms. Such smart contract functions as restricted transfer, forced transfer (controller token operation), metadata linking, and on-chain document linking (document management) will be supported.

Native Exchange Features

At the moment Kiva Wallet has included a built-in exchange feature. This is a comprehensive solution that starts with the user clicking on the token they want to trade, guides them through the necessary compliance procedures, and finishes with a one-click trade. Exchange integrations that are currently lined up include BinanceDEX, BitFinex, BancorDEX, Kyber Network, DexKonla, ONTDex, Totle, Loopring, ShapeShift, Changelly, ChangeNOW, PayBis and more are joining Kiva Ecosystem. It should be noted that Kiva’s Exchange integrations include all types of exchanges. We currently support or will support in the near future decentralized (DEX), centralized (CEX) and instant exchanges. Integrations will also support the exchange of all digital asset types, including security and Kiva NFTs (NFTs). We have already engaged with our compliance technology partners to help compliantly integrate their own partner security token exchanges.

Fiat Gateways. In order to help fully bridge the gap between the traditional cash-based and cryptocurrency economies, we are working to integrate a fiat-crypto gateway into our exchange feature. We have already signed partnerships with various leading companies in the field, including BTCDirect, BridgeX, Carbon, and WyreSend.

5.2.4 Automated Airdrop and Reward Programs

Loyalty rewards through airdrops have been shown to be an effective means of marketing for token sale projects and companies that want to bring attention to their blockchain products or token sales. Among blockchain users and investors, airdrops are seen as a quick and easy way to check out projects and to survey the blockchain landscape. Within the Kiva Wallet infrastructure is an automated token distribution system that makes airdrops, rewards and referral programs safe, transparent, and efficient. Users who participate in an airdrop or other loyalty rewards program within the Infinito app will receive their tokens automatically once the pre-designated conditions have been met. Just like everything at Kiva Wallet, the process is streamlined and takes just a few clicks.

Safe and Secure Infrastructure

Kiva Wallet strives to achieve the highest degree of security in the software wallet market. Kiva Wallet is a user-centric wallet, with private keys never leaving the user’s device. Additionally, all security features are regularly audited by multiple third party cybersecurity experts. A full audit was recently completed by the cybersecurity experts at Smartdec . Furthermore, to prevent fraud, we frequently verify the payment addresses of all Dapps, apps, and services that are listed on the App Square. For users who are interested in advanced level of security, Kiva Wallet will begin support for hardware wallets on the roadmap

5.2.5 Kiva Staking

Staking is the process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn Staking rewards.

How does staking work?

• When the minimum balance is met, a node deposits that amount of cryptocurrency into the network as a stake (similar to a security deposit).

• The size of a stake is directly proportional to the chances of that node being chosen to forge the next block.

• If the node successfully creates a block, the validator receives a reward, similar to how a miner is rewarded in proof-of-work chains.

• Validators lose part of their stake if they double-sign or attempt to attack the network

How does earning rewards with Kivachain work?

As long as you’re eligible and hold the minimum balance of an eligible crypto, you can earn rewards on Kiva Wallet (no work necessary on your end).

• You retain full ownership of your crypto.

• For some assets with slashing penalties at the protocol level (e.g. staking), Coinbase provides secure infrastructure to prevent slashing. In the unlikely event this does occur, Coinbase will cover you.

• For some assets with lockups at the protocol level, we may withhold a small amount of that crypto to assure that all Kiva Wallet customers have liquidity and can withdraw their crypto as needed.

• We take a commission on all rewards received, and the return rate for our customers reflects this commission and the actual amount of your crypto that was staked

5.3 Kiva Education

5.3.1 Limitations of Paper Certificate

Paper certificates are still seen in many quarters as being the most secure form of certification, since they are:

• Difficult to forge due to security features built into the certificates themselves; (usually) held directly by the recipient, who thus as full control over their certificate;

• Relatively easy to store securely for prolonged periods of time, e.g. by keeping them in a safe;

• They can be presented by the recipient anywhere, to any person for any purpose.

However, paper certificates also have significant disadvantages:

• While being hard to forge, no certificate is immune from the risk of forgery. Thus, the issuer is obliged to retain a central register of issued certificates that may be used to verify certificate authenticity;

• Certificate registries are single points of failure: while the certificates may remain valid, the ability to verify them is lost;

• Keeping such a register of claims, and answering queries as to the validity of certificates is a manual process, which requires significant human resources;

• Security features in the physical certificate derive exclusively from the difficulty level and expertise required to author the document. The more secure the certificate, the more expensive it is to produce.;

• There are no limitations on the ability of the issuer to fraudulently state the timestamp or other details of the certificate;

• Once issued, there is no way to revoke a certificate without having the owner relinquish control of it;

• If a third-party needs to use the certificates, e.g. to verify claims in CV, they need to read and verify each certificate individually and manually, a significantly time consuming process.

5.3.2 Limitation of non-blockchain digital certificates

• They require far fewer resources to issue, maintain and use, since:

  • The veracity of certificates can be checked against the registry automatically, without human intervention;

  • Where a third-party needs to use the certificates, these can be automatically collated, verified and even summarised if they are issued in a standardised for format;

  • The security of the certificate derives from the security of cryptographic protocols, which ensure that the certificate is cheap to produce but extremely expensive to reproduce by anyone except the issuer;

• Certificates can be revoked by the issuer;

• Certain types of issuer-fraud, such as changing the timestamp or changing the certificate serial, can be made impossible depending on the design of the system However, digital certificates also have significant disadvantages, namely that:

• Without the use of digital signatures, they are extremely easy to forge;

• Where digital signatures are used, these require the involvement of third-party certificate providers to guarantee the integrity of the transaction

• These third parties have significant control over every aspect of the certification and verification process, which can be abused;

• In many countries, there is no universally-used open standard for digital signatures, leading to certificates that can only be verified within the context of specific software ecosystems; — it is easier to destroy electronic records

• Keeping them safe requires sophisticated, multi-tier backup systems which are prone to failure;

• Should the registry fail, the certificates themselves become worthless since unlike paper certificates, they hold no intrinsic value without the registry;

• Registries of digital certificates are prone to large-scale data-leaks.

5.3.3 Digital Certificates using Kiva Blockchain Education Technology

Kiva Education technology is ideal as a new infrastructure to secure, share, and verify learning achievements. In the case of certifications, the Kiva Blockchain Educationcan keeps a list of issuer and receiver of each certificate, together with the document signature (hash) in a public database (the blockchain) which is identically stored on thousands of computers around the world. Digital certificates which are thus secured on a blockchain hold significant advantages over ‘regular’ digital certificates, in that:

• They cannot be forged – it is possible to verify with certainty that the certificate was originally issued by and received by the same persons indicated in the certificate

• Verification of the certificate can be performed by anyone who has access to the blockchain, with easily available open source software

• There is no need for any intermediary parties;

• Because no intermediary parties are required to validate the certificate, the certificate can still be validated even if the organisation that issued it no longer exists or no longer has access to the issued record;

• The record of issued and received certificates on a blockchain can only be destroyed if every copy on every computer in the world hosting the software is destroyed;

• The hash is merely a way of creating a ‘link’ to the original document, which is held by the user. This means that the above mechanism allows for the signature of a document to be published, without needing to publish the document itself, thus preserving the privacy of the documents.

Kiva Blockchain Education Certificate characteristic for recipient

Blockchains address the following ideal requirements for a certificate from a recipient’s perspective:

• Independence: the recipient owns the credential, and does not require the issuer or verifying third-party to be involved after receiving the credential;

• Ownership: the recipient may prove ownership of the credential;

• Control: the recipient has control over how they curate credentials they own. They may choose to associate credentials with an established profile they own, or not;

• Verifiability: the credential is verifiable by third parties, like employers, admissions committees, and verification organisations;

• Permanence: the credential is a permanent record

Kiva Blockchain Education Certificate characteristic for issuer

Kiva Blockchain Education address the following ideal requirements for a certificate from an issuer’s perspective:

• the issuer may prove they issued the credential;

• the issuer may set an expiration time on the credential;

• the issuer may revoke the credential;

• the credentialing system is secure and imposes minimal ongoing burden to remain so.

Other Characteristic of Kiva Blockchain Education Certificate

For the actual credential to have meaning and utility, a third-party verifier, such as an institution receiving the credential as part of an application, must be convinced of a certificate's veracity. The following are standard requirements:

• Integrity: the content hasn't been tampered with; that is, it matches what the issuer originally intended.

• Authenticity: confidence that the issuer is who the certificate claims, and has not been forged.

5.3.4 Certifying Identity using Kiva Blockchain Education

When a person wishes to confirm their identity to another person or institution, they will share much of that personally-identifiable information. Therefore, for example a prospective student might confirm their identity to a university admission’s office by providing their name, address, government identification number, gender and grades. Typically, the admissions office will keep all this data in a centralized database, requiring the user to trust them to care for the safety of their data. However, due to the value of such data, it is extremely susceptible to risks such as abuse, fraud and theft, as demonstrated by a recent spate of high profile big data thefts from governments and corporations around the world. Currently, every time a person needs to conduct a transaction with a new person or organization, they again need to hand over their data and give yet another person control over how that data is safeguarded and shared.

Blockchain technology enables a new concept of self-sovereign identity, whereby a user stores their own personally identifiable information on a personal device such as a smartphone, and only shares it with third parties as necessary. This is the digital equivalent of keeping your paper certificates in a safe at home, and displaying them to a third-party to prove your identity, but keeping control over whether these third parties can copy such documents or not. Blockchain technology furthermore allows for the user to certify their identity without needing to share the underlying data that makes up that identity.

5.3.5 Using a Certified Self-Sovereign Identity in Kiva Blockchain Education

Once a person has a fully-complete self-sovereign identity:

• Their personal data is digitally stored on a device to which only they have access, and which they control, such as a device-level wallet;

• A hash of that data, whether consisting of claims or digital documents, may be stored on the blockchain;

• The truthfulness of that data is certified by third parties, such as an issuing or verifying institution where the certificates are also:

  • Stored on the secure device with the rest of the person’s data;

  • Hashed on a blockchain.

With these elements, a person can securely identify themselves to any party who also trusts the verifying institution, simply by proving that they are the owner of the public key associated with the certificate claim, and without the need to share any piece of personally-identifiable information – not even their name.

Thus, to continue our example, once the student at the university has received a scholarship, they might need to identify themselves as a scholarship recipient to other parts of the university to receive services. For example, they might be entitled to free books from the university bookshop. Traditionally, the university bookshop would need to hold the data of which students are entitled to scholarships and free books to be able to offer this service. Thus, to receive free books, the student would need to allow a bookshop to hold extremely sensitive information from which one could infer the student’s financial situation and that of their family. With a verified self-sovereign identity, the bookshop would not need to hold any data. The student would simply turn up, present the “scholarship recipient” claim (stored on their phone or another device), then prove that they are the owner of that certificate claim by entering their password or scanning their fingerprint on their phone. Since the bookshop owner trusts the certificate issuer (i.e. the admissions office) to have verified the identity appropriately, and can trust the certificate due to the security and immutability of the blockchain, they could give the student books, without the need to store any piece of information whatsoever about the student.

5.3.6 Issuing Kiva Blockchain Education Certificates

Wherever a certificate can have a measurable value, it can be represented as a token, and traded directly on a custom blockchain. Thus, for example on a blockchain for:

• School-leaving certificates, a single certificate might be considered as one token;

• Educational credits, would equal one token;

• Tracking references to journal papers, one reference might equal one token.

Thus, certificates could be transferred from one person to another, simply by transferring a token on the blockchain. Additional information on the certificate could be stored either:

• Directly on the blockchain; or

• By linking to it from the blockchain entry.

Thus, it is possible to design a database where some information would be private and held by the user, while other information would be held publicly on a blockchain.

The advantage of issuing certificates directly on a blockchain is that the certificates themselves, rather than just the proof of their signing, become immutable and permanent.

The disadvantage is that any general purpose blockchain used in this manner would grow significantly in size, which means that it would lead to low performance and high resource usage. Thus, such a model could only be implemented as a private/permissioned blockchain

5.3.7 Technical Characteristics of Kiva Blockchain Education

A centralized ledger is a single, authoritative list of transaction records. An example of these might include a national land registry. In computer terms, a centralised database is stored and executed on a single central node.

A variation of a centralized ledger, with an element of distribution, involves several parties sharing responsibility for different parts of the single authoritative ledger. Thus, consider a national land registry which is administered by regional offices, each of which only process and store transactions within their jurisdiction - but all of which ultimately form a single database of national land transactions. In a computerized implementation of this, each node only stores its part of the database and executes its part of the code. If the central computer (server) goes down, access to its ledger is prevented.

Decentralizing and distributing a ledger involves the removal of the central controlling authority entirely by creating a system whereby:

• Several persons keep copies of the entire ledger;

• Writing or making changes to the ledger requires consensus from the persons who have copies;

• Each addition or change is recorded in each copy of the ledger – thus each copy is equally authoritative.

A distributed, decentralized network will only go down if every single node goes down, rendering it virtually always available.

Hashing

A hash is a short code of defined length which serves as a fingerprint for a digital document. A program called a hash-generator allows a user to upload any string of text and create a unique ID. Every time the same string of text is run through the hash generator, it will give the same document-ID. The contribution of hashing as an anti tampering device is significant: if a single letter in a document is changed, it will automatically generate a completely different ID.

Hashes are one-way. This means that the hash-generator can be used to generate a hash from the document, but it is mathematically impossible to generate a document from a hash.

Architecture of Kiva Blockchain Education

The cornerstone of the Kiva Blockchain Education open standard is the belief that people should be able to possess and prove ownership of their important digital records. These records form the basis for proving aspects of oneself, consistent with the principles of self-sovereign identity. Within this context, the Blockchain is considered to be a technology that allows individuals to own their official records and share them with any third-party for instant verification, all the while precluding any attempt to tamper with or edit the records.

The Kiva Media Lab and Learning Machine, an enterprise software vendor, have developed the Kiva Blockchain Education open standard for issuing and verifying credentials on the Bitcoin blockchain. Kiva Blockchain Education is currently the only open standard for issuing and verifying records on the blockchain, and it is the goal of the Kiva Blockchain Education community to promote its adoption as the main global standard (in terms of social adoption) for issuing records on the blockchain.

The standard allows any user, including education institutions and governments to use the base code and develop their own software for issuing and verification. Kiva Blockchain Education is free and available for anyone to use without credit or royalties to its core developers; from a scan of the Kiva Blockchain Education Community forum, it is clear that a number of organisations, start-ups and individuals around the world are using it to develop applications. Kiva Blockchain Education is also free for recipients with the Kiva Blockchain Education mobile app and wallet available for free download for both iOS and Android; its code is also completely open -source.

The purpose of making Kiva Blockchain Education open source was to avoid a standards war and vendor lock-in, perceived by the developers to be two major impediments to the easy interoperability and wide adoption that are prerequisites for true recipient ownership of official records. Data trapped in silos is the status quo and is perceived by the Kiva Blockchain Education community as a significant challenge which the Blockchain gives us the opportunity to move beyond

Blockcerts sets the precedent for a mobile wallet that meets the most important umbrella criteria of digital self-sovereignty: recipient ownership and vendor independence. Within this context

• Recipient ownership means that individuals control the private keys that allow them to demonstrate ownership of money or their digital records.

• Vendor independence means that access, display, and verification do not rely on any particular vendor. When based on open-source standards, records can therefore be migrated, shared, and verified independent of any vendor.

The combination of these two conditions is cited as the only way to guarantee that individuals independently own their personal data

5.4 Konla Chat and Video Call

Since the dawn of the Internet, communication has become increasingly interconnected. We communicate and collaborate across oceans and borders on a scale never seen before. The number of “free communication” platforms is truly astounding. However, these platforms are not truly free. As we have learned, our data is constantly being brokered by centralized platforms who are using our profiles, activities, and relationships for financial gain by selling that information to advertisers.

In addition, these platforms have become targets for attack. The personal information we thought was private is being exposed by massive data hacks. This is where blockchain enables a new level of data ownership through encryption and user-controlled encryption keys. The protection of our keys (and our data) does not need to be entrusted to a third party.

In 2009, the release of Bitcoin software enabled trustless, secure, peer-to-peer value transfer. For the first time, users of the internet were able to transact directly without any third parties to trust and verify. The “blockchain” of Bitcoin became a verified public record of transactions. The idea of trustless systems is the core concept that Bitcoin gifted to the world, and that blockchain-based applications seek to leverage.

Konla has built a protocol on the BSC blockchain for secure message transfer. This protocol leverages features inherent to BSC accounts to create identities for communication, knowledge sharing, and transactions.

Konla Chat provides individuals an unparalleled level of empowerment in regard to the security of their communications.

Konla Chat uses a relatively simple technique for encrypting communication. Very simply, messages you send are encrypted with the public key of the recipient. That public key is stored on and referenced from the Konla Blockchain.

No easy workaround exists outside of the blockchain, because most users have no easy way to generate or transmit keys. The keys are useless outside of the app, therefore no one else cares to reference them, validate them, or store them in a public way that can be easily referenced.

There is no other chat application which utilizes blockchain in this way. One of our engineers, Angel Jose, conceptualized this technique and wrote a blog about how it works. Since that time we have improved upon the concept and increased the security of these methods and the size of the payloads.

Konla Chat users will be able to verify that each message was transmitted by the owner of the private key that is associated with the sending account. For example, to verify that the sender of a message (Alice) is in fact Alice. This works with the public / private key aspects of the Konla blockchain. Alice verifiably signs each message. We know it is Alice because Alice has a public Konla account and that public key matches each chat signature.

Each Konla account (and therefore Konla Chat account) is unique. No two accounts have the same name. This will prevent many widely exploited vulnerabilities in most social and communication platforms today (such as using the same photo and username).

Konla Chat uses a special “chat” child permission on the Konla account. Konla Chat users will be able to change the keys to this permission at any time outside of the app and re-import them. While that will not change the older messages, future messages will use the new key and this can be verified. If a user is concerned about their key having been compromised, they can change their key outside of Konla Chat, import their account and all future messages will use that new key.

Konla Chat uses keys to authenticate accounts. Each account has a public key stored on the Konla blockchain. Each public key has a corresponding private key completely controlled by each user.

Instead of only generating keys from within the chat app, Konla Chat uses the public and private keys associated with the Konla Blockchain for a given account. This can be generated offline, or by any means, with the account being imported back into Konla Chat.

The encryption of chat messages works with keys imported from an existing Konla account or keys that have been generated locally on the device using Konla Smart Chain. Those keys are then further encrypted using device and app passwords. Private keys are never transmitted or stored outside of the device. Most critically, Konla Chat is not able to read any private user messages for harvesting or collecting private chat information.

5.4.1 Technical Explanation of the Konla Chat Encryption Protocol

The Konla Chat Encryption Protocol uses advanced cryptography combined with the Konla Blockchain to deliver messages so that users will be able to “Trust No One” and maintain the privacy and security of their communication in an unparalleled, provably secure application.

The Konla Chat Encryption Protocol uses both asymmetric key encryption in a unique way. Users do not have to trust Konla Chat with their keys since they have complete control over them. Any user can change their keys at any time using cleos or a Konla interface such as Scatter / Kona Toolkit. No other chat application that we are aware of provides this level of control over keys to the user. This is made possible by using the Konla Blockchain. Ephemeral decrypt keys are generated per Konla-peer-keypair when the connection is formed between peers.

The Konla Chat Encryption Protocol does not transmit or receive keys from a central server. All account keys are stored on and referenced from the Konla Blockchain. Since the Konla account keys are retrieved via the Konla API, we do not have to trust the key being sent to us. The latest key being stored on-chain is used to encrypt/decrypt messages. As we are sensitive to key overuse, which is why we are implementing high-entropy keys, else messages of the same contents would generate the same signatures and if intercepted, could lead to shared secret discovery.

Konla Chat uses anonymous key agreement via diffie-hellman key exchange. Diffie-Hellman is a widely used method to generate a shared secret based in 2 different locations without exchanging information between those 2 locations. Specifically, at Konla Chat we use ECDHE-256 to create a shared secret based on the two peers’ Konla account keys plus an entropic value. The shared secret is created on both peers’ devices simultaneously. Therefore, it does not need to be transmitted between devices or stored on any servers — this secret only lives on the devices and is used to secure the session.

How does 1:1 Chat work with the Konla Chat Encryption Protocol?

End-to-End Encrypted Messaging

Messages are encrypted at the application level using Konla keys as described above. Additionally, they are encrypted in transit by TLS encryption. When two users are online at the same time, the app will negotiate a true P2P connection. When network conditions are imperfect, it will use servers temporarily to make the connection. Encrypted chat messages cannot be read by the server or any intermediaries because the decrypt keys are only stored on the devices of the peers. These unreadable encrypted messages are stored temporarily until they are delivered to the peer’s device. Messages stored in the device’s local storage can be permanently deleted by the user from their own device (not the device it was delivered to). We are working on implementing ephemeral messaging where messages will be automatically removed from local storage on both devices after a set time period.

When Alice sends a message to Bob, first she generates a shared secret using Bob’s public key and her own private key. The shared secret is used to encrypt the plaintext message, then the encrypted message is sent to Bob. When Bob gets the encrypted message, his device looks at Alice’s public key and his private key + an entropic value to generate the same shared secret as Alice generated on her device. Then Bob uses the shared secret to decrypt the message.

How do Encrypted Video and Audio calls work in Konla Chat?

End-to-End Encrypted and Ephemeral Calling

Konla Chat Video and Audio calls are established over webrtc secured by TLS. In ideal network conditions, this will not require any servers once a connection is made. Konla Chat uses servers for signaling of these data connections. If network conditions are not ideal, then encrypted data may travel through a TURN server, but it cannot be read by 3rd parties due to being encrypted.

5.4.2 Channels

Channels will have 2 types: Public and Private. Private Channels will be permissioned, so users must request or pay to join. These will be useful for people who want to have a group chat with lots of users around a topic or common interest.

Very soon, users will be able to create their own Channels. Channels will be purchasable using Sense tokens.

Konla Chat Public Channels can be accessed by anyone using Konla Chat. Therefore, Public Channels do not have a reasonable expectation of privacy. All of these chat messages are encrypted using TLS during transit.

Each message is signed by your private key and can be verified by other users by referencing your public key on the blockchain. These messages are stored on a server unencrypted, however, Konla Chat has a feature where the creator of any message can be verified. This verification will prevent any impersonation attacks common on other chat applications. Verification is based on the latest public key available on the Konla API.

We are testing an implementation to store these public channel messages on-chain.

Additionally, Public Channels have features such as pumping (weighting of messages via tokenized-likes), threading, and discoverability via web/search.

5.4.3 Private Group Chat

End-to-End Encrypted

Konla Chat Private Groups are currently in development and testing phases. There are many moving parts to these and we want to make sure they are solid before we start to release them. We are planning to have these in the app by v2.0. Here is how they work:

The private groups use a shared-key exchange. An initial key will be created when a new group has two or more members. The key is salted with additional parameters and the Konla Chat Encryption Protocol is used to share it among future members. Each time the members change, the key also changes. When membership of the group changes, the key will also change and it will be distributed to each member encrypted by their Konla public key from the owner of the group. Messages will be stored on a server (or blockchain), but they cannot be read by anyone who does not have the keys.

5.5 Kiva De-Fi Exchange

We now present Kiva Defi Exchange protocols categorized by the type of operation they provide. The presented protocol types rely on the previously examined Kiva Defi Exchange primitives. A conceptual overview of how Kiva Defi Exchange primitives are used in combination with market mechanisms to construct protocols

Figure 7: A conceptual overview of the different constructs within the Kiva Defi Exchange ecosystem.

5.5.1 On-chain Asset Exchange

Venues facilitating the exchange of digital assets are a crucial part of the wider digital asset ecosystem, with centralized crypto asset exchanges appearing as early as 2010. However, centralized crypto asset exchanges have been repeatedly prone to several major attacks and the absence of public verifiability of trading activity has resulted in reports of fake trading volume undermining centralized exchanges’ trustworthiness. A class of Kiva Defi Exchange protocols that facilitates the non-custodial exchange of on-chain digital assets exists in the form of decentralized exchanges (DEXs). Apart from being non-custodial, i.e., the exchange not having ownership over a user’s funds at any point in time, a DEX settles all trades on-chain, thereby ensuring public verifiability for all transactions to network participants. A further difference between DEXs and their centralized counterpart is that only assets native to the underlying blockchain, such as ERC-20 tokens on Ethereum, can be traded. This is due to the atomicity of transactions on which DEXs rely to ensure the correctness of their execution and therefore direct interaction with external assets such as Bitcoin or fiat currency is unfeasible.

Some solutions to work around this limitation do exist but have drawbacks limiting their adoption. Wrapped tokens such as wBTC (wrapped Bitcoin) can be used to trade assets which are not directly on Ethereum, but given their often custodian nature, this approach shares similar security concerns as centralized exchanges. Cross-chain solutions have also been designed but at the time of writing, have not yet seen wide adoption in DEXs. For instance, atomic swaps have require inherently high latency, over which a free option is granted to one party, governed systems like essentially require the user to trust the incentive alignment of governance, and methods like require relays, which can be expensive to maintain and require the required intermediary to overcollateralized the wrapped asset.

Based on the mechanism for price discovery, DEXs come in different variants, such as order book DEXs (including individual and batch settlement and automated market makers (AMMs)

1) Order Book DEXs: In centralized financial exchanges, an order book is an electronic list of buy and sell orders for a particular financial instrument, where a trade is executed when orders are matched. Maintaining the state of an order book is a computationally expensive task and given the design of blockchains (e.g., the Ethereum virtual machine and its gas price mechanism) it is not practically feasible to host this on-chain. Hence, a decentralized order book exchange may employ off-chain order books and thus involve some level of centralization, where only trade settlement is executed on chain. A user wanting to execute an order will typically presign a transaction allowing the DEX to execute the trade only if it fulfills the conditions specified by the user

Orders are matched either manually or algorithmically, where in the case of the former, takers are required to fill resting orders created by makers. While manual order matching offers trustless trading between takers and makers as any centralized intermediary is circumvented, it comes at the cost of increased latency and potentially fragmented liquidity due to inefficient price discovery. More efficient order matching can be achieved algorithmically, however this involves trusting centralized off-chain matching engines, which are often prone to manipulation, to fill orders at fair prices.

Different order book methods using batch settlement may help to resolve these matching issues algorithmically. For instance, settles the order book in a manner resembling a Dutch auction (with batches settling at gradually decreasing prices until sell orders are filled). This has the downside of potentially long settlement delays. Alternatively, trades can be matched algorithmically in periodic batches maintained by decentralized keepers. Here, the matching problem is solved by competing keepers who submit their solutions on-chain, from which the protocol executes the best solution. If this keeper market is competitive, trades should be settled at fair prices, though issues can arise when the keeper market is not competitive or if the method for choosing the best keeper solution can be gamed.

2) Automated Market Makers: In traditional finance, market makers are liquidity providers that both quote a bid and ask price, selling from their own book, while making a profit from the bid-ask spread. Optimal market making strategies quickly become sophisticated optimization problems. In contrast, AMMs provide liquidity algorithmically through simple pricing rules with on-chain liquidity pools in place of order books. AMMs have been studied in algorithmic game theory, e.g., logarithmic market scoring rule (LMSR) in prediction markets. While they have largely remained unimplemented in traditional finance, they have become popular in Kiva Defi Exchange for a several reasons: (1) they allow easy provision of liquidity on minor assets, (2) they allow anyone to become a market maker, even if the market making returns are suboptimal, (3) AMM pools can be separately useful as automatically rebalancing portfolios.

In an AMM liquidity pool, reserves for two or more assets are locked into a smart contract, where for a given pool, each liquidity provider receives newly minted liquidity tokens to represent the share of liquidity they’ve provided. A trade is consequently performed by trading against a smart contract’s liquidity reserve for an asset, whereby liquidity is added to the reserves of one token and withdrawn from the reserves of one or more other tokens in the pool. A trading fee is retained by a liquidity pool and paid out proportionally to the amount of liquidity provided by each liquidity token holder. Liquidity providers are required to give up their liquidity tokens in order to redeem their share of liquidity and accrued fees.

With an AMM, the price of an asset is deterministic and decided by a formula, not an order book, and thus depends on the relative sizes of the provided liquidity on each side of a currency pair. If the liquidity is thin, a single trade can cause a significant fluctuation in asset prices relative to the overall market, and arbitrageurs can profit by closing the spread. Arbitrage refers to the process of buying or selling the same asset in different markets to profit from differences in price. Parties who undertake this process are arbitrageurs, and often play a critical role in Kiva Defi Exchange protocols. Thereby, arbitrage is used to ensure that the price for an asset on an AMM is at parity with the price on the open market. Note that as the reserve ratios for a pool’s assets change as liquidity is added and withdrawn, a liquidity provider may receive a different token ratio upon withdrawing his liquidity share compared to the ratio he initially deposited. For a more focused analysis of AMM design and the underlying market making mechanism.

5.5.2 Loanable Funds Markets for On-chain Assets

Lending and borrowing of on-chain assets is facilitated through protocols for loanable funds (PLFs) which refer to Kiva Defi Exchange lending protocols that establish distributed ledger-based markets for loanable funds of crypto assets. In the context of a PLF, a market refers to the total supplied and total borrowed amounts of a token, where the available (i.e., non-borrowed) deposits make up a market’s liquidity. Unlike peer-to-peer lending, where funds are directly lent between individual agents, in a PLF, deposits for a given token market are pooled together in a smart contract. An agent may directly borrow against the smart contract reserves, assuming the market for the token is sufficiently liquid.

Given the pseud-anonymous nature of blockchains, borrowers are required to overcollateralize their borrow position, in order to protect PLFs from sustaining financial losses as a result of borrowers defaulting on their debt. Collateralization is the process in which something of value is provided as security to cover the value of a debt. For example, when obtaining a mortgage for a house, the house is the collateral: if the borrower defaults on their repayment obligations, the house can be sold to pay off the mortgage. In general, collateralization makes it possible for agents to borrow assets without the lender incurring credit risk, i.e., suffering financial losses as a result from a borrower defaulting on a debt obligation. By posting collateral of x in USD, in principle an agent can borrow up to 100% of this collateral value in another asset. If the agent does not repay the debt, the collateral can be liquidated to pay it off. In this way, collateralization simultaneously ensures that the lender (likely a smart contract) can recover their loaned value and provides the borrower with an incentive to repay the loan. Due to the historical volatility and illiquidity of many crypto assets, it should be noted that overcollateralization is often relied upon, where for, e.g. 100 USD of borrowed value, more than 100 USD must be provided as backing collateral. The idea is to ensure that even if the value of the collateral relative to the debt falls considerably, there would still be sufficient collateral to cover the debt. In PLFs, a borrower has to ensure that the value of the locked collateral remains above some liquidation threshold, as otherwise so-called liquidators, a type of keeper, are able to purchase the locked collateral at a discount and close the borrower’s debt position. In a liquidation scenario, the liquidated borrower would receive the collateral minus any outstanding debt and incurred penalty charges

PLFs may offer functionality beyond overcollateralized borrowing capabilities in the form of so-called flash loans. These provide access to uncollateralized loans for the duration of one transaction, requiring the borrower to repay the full borrowed amount plus interest by the end of the transaction. Flash loans leverage a blockchain’s atomicity (i.e., the transaction fails if the loan is not repaid in the same transaction) and offer several use cases, such as decentralized exchange arbitrage and collateral swaps. However, they can also be used in attacks. The cost of borrowing in a PLF is given by an interest rate charged to the borrower, which is determined by a market’s underlying interest rate model. These interest rate models tend to reflect the notion that as liquidity becomes scarcer, a higher interest rate should encourage current borrowers to repay their debts, while incentivizing holders of excess deposits to supply these. In exchange for depositing funds, a depositor receives a derivative token reflecting his share of the total supplied funds in a market. As interest paid by borrowers is generally retained by the smart contract, the relative share of total funds in a market of a derivative token holder will increase over time. Accrued interest in a market is thereby paid out to the market’s depositors as compensation for providing liquidity, while a reserve fraction is retained from the paid out interest by the protocol in order to protect against periods of illiquidity and market stress.

5.5.3 Stable Coin

Non-custodial stablecoins are crypto assets which aim to be price stable relative to a target currency, commonly the USD, and seek to achieve this via additional economic mechanisms. Note that custodial stablecoins, such as USDT are not within the scope of Kiva Defi Exchange, since these principally rely on a trusted third-party to operate, though they may be among the assets used in other Kiva Defi Exchange protocols. In the decentralized setting, the challenge for the protocol designer is to construct a stablecoin which achieves price stability in an economically secure and stable way and wherein all required parties can profitably continue to participate. Price-stability is pursued via the use of on-chain collateral, providing a foundation of secured loans from which the stablecoin derives its economic value.

The core components of a non-custodial stablecoin are as follows:

• Collateral. This is the store of primary value for a stablecoin.

• Agents. Agents form at least two roles in a non-custodial stablecoin: (i) risk absorption, for instance by providing collateral that is intended to absorb price risk, and (ii) stablecoin users. • Governance. A mechanism and set of parameters that governs the protocol as a whole (either performed by agents or algorithmically).

• Issuance. A mechanism to control the issuance of stablecoins against or using collateral (either performed by agents or algorithmically).

• Oracles. A mechanism to import data external to the blockchain onto the blockchain, such as price-feeds.

5.5.4 Portfolio Management

For liquidity providers seeking to maximize their returns, it can be an onerous task given the complex and expansive space of yield-generating options. The management of onchain assets can thus be automated through Kiva Defi Exchange protocols which serve as decentralized investment funds, where tokens are deposited into a smart contract and an investment strategy that entails transacting with other Kiva Defi Exchange protocols (e.g., PLFs) is encoded in the contract. Yield in Kiva Defi Exchange is generated through interest (including accrued fees earned) and token rewards. For the latter, a protocol (e.g., PLF or AMM) distributes native tokens to its liquidity providers and/or users as rewards for the provision of deposits and/or protocol adoption. These protocol-native token rewards are similar to equity in the sense that they serve as a right to participate in the protocol’s governance, as well as often represent a claim on protocol generated earnings. The distribution model for token rewards in exchange for supplied liquidity may vary across protocols, yet is commonly proportional to how much liquidity an agent has supplied on a protocol. Therefore, smart contract encoded investment strategies of on-chain assets are tailored around yield generating mechanisms of different protocols with the sole aim of yield aggregation and maximization. In practice, on-chain management of assets may range from automatic rebalancing of a token portfolio to complex yield aggregating strategies.

Derivatives

Derivatives are financial contracts which derive their value from the performance of underlying assets, the derivatives market represents about 60% of the entire crypto assets trading market. While about 99% of the derivative trading volume is achieved on centralized exchanges, a number of Kiva Defi Exchange protocols have emerged which provide similar functionality. We lay out four different basic types of derivatives:

• Synthetic assets. These aim to replicate the payoffs of another asset without directly taking a position in that asset. In Kiva Defi Exchange, synthetic assets typically replicate off-chain assets on-chain. Though less used at present another mechanism for constructing synthetic assets is to use AMMs that enact dynamic portfolio rebalancing strategies to replicate derivative payoffs. These bear a resemblance to synthetic portfolio insurance in traditional finance and have been explored more specifically using constant product market makers

• Futures. These facilitate the buying or selling of an underlying asset at an agreed price and time in the future. Futures have seen little adoption in Kiva Defi Exchange yet. Likely this is caused by the high volatility of the underlying crypto assets making it hard to determine the risk taken by traders writing the futures.

• Perpetual Swaps. These are similar to futures, however, they have no set expiry date or settlement and were specifically created and popularized for crypto asset markets. These are much more popular as they allow traders to decide ,to keep the position by providing a funding transaction in case their position is underfunded. Due to the frequent price discovery, the price of perpetuals trades typically closer to the underlying in comparison to futures. Moreover, perpetuals are more capital efficient than trading the underlying itself since platforms require less than 100% collateral be posted by traders.

• Options. These allow the buyer to have the choice to exercise the contract while it leaves the seller with the obligation to fulfill the contract. For example, a seller can offer to buy Bitcoin at a price of $18, 000 two weeks in the future. The buyer of this option contract can then choose to exercise the option after two weeks have passed. If Bitcoin trades at a price of $17, 000, the buyer would have a potential earning of $1, 000 minus fees. This is an example for a European-style put option. There are many different option types and trading strategies. Currently, the Kiva Defi Exchange market for options is very early with basic call and put options but not leveraged positions on options, which present greater capital efficiency issues

In Kiva Defi Exchange derivative design, there are a few particular points and issues to discuss further:

a) Leverage: In Kiva Defi Exchange, protocols are typically overcollateralized to reduce the likelihood of defaulting on loans (e.g., in stablecoins or protocols for loanable funds). This makes these protocols capital inefficient as one needs to deposit more value than taking as a loan. Hence, derivatives can form an alternative where traders are only required to provide a fraction of the capital to trade the value of an underlying by, e.g., using a perpetual or an option. Furthermore, platforms like dYdX allow traders to leverage their positions. This elevates the exposure to the price movement of the derivative. However, while centralized alternatives rely on established risk management systems, Kiva Defi Exchange alternatives must still rely on higher rates of collateral in absence of other forms of investor verification

b) Settlement: Derivatives can either be physically settled, i.e., the underlying is transferred, or cash settled, i.e., the price difference at time of exercising the derivative is settled in some currency. Both forms of settlements can be automatically enforced in Kiva Defi Exchange by locking the assets at stake in the trading smart contracts. Cash settlement is often more capital efficient as it requires locking only the difference in price movement, e.g., in perpetual and option contracts between different points in time. Physically settled derivatives are mostly possible when the asset is available on-chain (e.g., Ethereum options in Opyn).

c) Trading: Similar to other Kiva Defi Exchange assets, derivatives can be traded via an AMM or order book DEX. Order book style DEX trading is very similar to centralized exchanges and the effectiveness of price discovery of the derivatives mostly relies on sufficient liquidity. However, derivatives with set expiry dates like futures and options are hard to price on AMMs. Most AMM platforms do not account for a time dimension in the asset. This causes an issue specifically with option trading since the value of the option is subject to time decay (measured by θ). An option decreases in value over time depending on the price of the underlying. More nuanced AMM designs aim to incorporate such a time dimension. Bonding curves in AMMs are still not aware of other relationships between the underlying and option value. Hence, the AMM price of the option does not reflect the actual option value as it relies on liquidity providers and traders to correct the price. With more complex value functions in the AMM like Balancer it is possible to replicate strategies that combine the underlying and a derivative into a single asset.

5.5.5 Kiva Defi Exchange on Layer-Two

Layer-two refers to a set of protocols which seek to facilitate the scaling of blockchains (i.e., layer-one) without a change in the trust assumptions at layer-one and without modifying the consensus mechanism. Layer-two protocols have emerged in a variety of guises, perhaps most notably as payment channels and payment channel networks. For a detailed overview of layer-two protocol. Rollups are at the center of layer-two based approaches to Kiva Defi Exchange scalability. The central idea is that the computation and storage of a would-be layer-one contract is handled on layer-two, with an on-chain assertion made about what the layer-two contract’s operations are. Optimistic Rollups are one type of rollup, where each assertion is posted without an accompanying proof to guarantee the validity of the assertion. The assertion can be shown to be incorrect via the posting of a fraud-proof.

5.6 Token Play - Kivachain NFTs and Gaming Platform

The creative industries can be framed in terms of their contribution to the economy as well as in terms of their non-economic value, for example, the role the cultural sector plays in nationhood, wellbeing and informing our understanding of the world (Bakhshi and Cunningham 2016; Keat 2000). Fair and efficient methods for creative practitioners to produce and share their work can result in multiple societal benefits. Of these, 162,170 were employed in the creative industries (made up of music, visual and performing arts; film television and radio; advertising and marketing; architecture and design; software and digital content; and publishing), with the remainder doing creative work in other industries. Those who work in creative occupations in the creative industries are likely to be highly networked sole-traders or running micro-businesses. Since these workers are often self-employed or employed on short-term contracts, they must learn to manage their career and business or partner alongside others who can manage business tasks on their behalf (Bridgestock 2013).

Cryptographic assets can vary in terms of fungibility or non-fungibility. Fungibility is a characteristic of a token that dictates whether items or quantities of the similar type can be entirely interchangeable during exchange or utility. A non-fungible token (NFT) is a cryptographically unique, non-replicable token. This is in contrast to fungible tokens which can be replaced by other things in the real world such as currency or stocks which can be split and exchanged. A limitation to fungible tokens are that many valuable things, such as art work or real estate, cannot be divided and replaced. Kiva NFTs therefore offer an improved system to record and keep track of the ownership of unique assets. The ownership along with any relevant information can be recorded and permanently kept on the blockchain. Fungible tokens differ from Kiva NFTs in terms of interchangeability, uniformity, and divisibility. Fungible tokens can be exchanged for other items including one currency for another of the same currency. They are also identical to one another and can be divided into smaller units and not affect its value. A 100 dollar bill divided into 100 one dollar bills would be equal and therefore fungible. Kiva NFTs as proposed in this paper cannot be replaced with another non-fungible token of a similar type e.g. a non-fungible token of one fine artwork cannot be exchanged with a non-fungible token of another fine artwork. A non-fungible token cannot be divided e.g. you cannot divide a constructed real estate property into different parts. Each non-fungible token is unique with distinctive information and attributes that make them impossible to interchange. Each non-fungible asset is unique and differs from others. Certain artwork may have the same dimensions or artistic style, but each one has a unique artist, date of creation, and gallery identifier and therefore does not make it easily transferable. Due to the non-fungible nature of assets such as fine art and real estate, we structure our system accordingly. Kiva NFTs in relation to these objects then become unique investments because they are tied to a physical object and ownership of the assets cannot be faked once put on the blockchain.

5.6.1 Kiva NFTs protocol

Kiva NFTs have some special properties:

• Each Kiva coin minted has a unique identifier.

• They're not directly interchangeable with other coins 1:1. For example 1 Kiva coin is exactly the same as another Kiva coin. This isn't the case with Kiva NFTs.

• Each Kiva coin has an owner and this information is easily verifiable.

• They live on Kiva coin and can be bought and sold on any Kiva NFT market.

In other words, if you own an Kiva NFT:

• You can easily prove you own it.

• No one can manipulate it in any way.

• You can sell it, and in some cases this will earn the original creator resale royalties.

• Or, you can hold it forever, resting comfortably knowing your asset is secured by your wallet on Ethereum.

And if you create an Kiva NFT:

• You can easily prove you're the creator.

• You determine the scarcity.

• You can earn royalties every time it's sold.

• You can sell it on any Kiva NFT market or peer-to-peer. You're not locked in to any platform and you don't need anyone to intermediate

5.6.2 Scarcity

The creator of the Kiva NFT gets to decide the scarcity of their asset.

For example, consider a ticket to a sporting event. Just as an organizer of an event can choose how many tickets to sell, the creator of Kiva NFT can decide how many replicas exist. Sometimes these are exact replicas, such as 5000 General Admission tickets. Sometimes several are minted that are very similar, but each slightly different, such as a ticket with an assigned seat. In another case, the creator may want to create Kiva NFT where only one is minted as a special rare collectible.

In these cases, each Kiva NFT would still have a unique identifier (like a barcode on a traditional "ticket"), with only one owner. The intended scarcity of the Kiva NFT matters, and is up to the creator. A creator may intend to make each Kiva NFT completely unique to create scarcity, or have reasons to produce several thousand replicas. Remember, this information is all public.

5.6.3 What are Kiva NFTs used for?

Here's more information on some of the better developed use-cases and visions for Kiva NFTs.

• Digital content

• Gaming items

• Domain names

• Physical items

• Investments and collateral

Maximizing earnings for creators

The biggest use of NFTs today is in the digital content realm. That's because that industry today is broken. Content creators see their profits and earning potential swallowed by platforms.

An artist publishing work on a social network makes money for the platform who sell ads to the artists followers. They get exposure in return, but exposure doesn't pay the bills.

Kiva NFTs power a new creator economy where creators don't hand ownership of their content over to the platforms they use to publicise it. Ownership is baked into the content itself.

When they sell their content, funds go directly to them. If the new owner then sells the Kiva NFT, the original creator can even automatically receive royalties. This is guaranteed every time it's sold because the creator's address is part of the token's metadata – metadata which can't be modified.

5.6.4 Kiva NFTs Boosting gaming potential

Kiva NFTs have seen a lot of interest from game developers. Kiva NFTs can provide records of ownership for in-game items, fuel in-game economies, and bring a host of benefits to the players.

In a lot of regular games you can buy items for you to use in your game. But if that item was a Kiva NFT you could recoup your money by selling it on when you're done with the game. You might even make a profit if that item becomes more desirable.

For game developers – as issuers of the Kiva NFT – they could earn a royalty every time an item is resold in the open marketplace. This creates a more mutually-beneficial business model where both players and developers earn from the secondary Kiva NFT market.

This also means that if a game is no longer maintained by the developers, the items you've collected remain yours.

Ultimately the items you grind for in-game can outlive the games themselves. Even if a game is no longer maintained, your items will always be under your control. This means in-game items become digital memorabilia and have a value outside of the game.

Decentraland, a virtual reality game, even lets you buy Kiva NFTs representing virtual parcels of land that you can use as you see fit.

Physical items

The tokenization of physical items isn't yet as developed as their digital counterparts. But there are plenty of projects exploring the tokenization of real estate, one-of-a-kind fashion items, and more.

As Kiva NFTs are essentially deeds, one day you could buy a car or home using Kiva coins and receive the deed as a Kiva NFT in return (in the same transaction). As things become increasingly high-tech, it's not hard to imagine a world where your Kiva wallet becomes the key to your car or home – your door being unlocked by the cryptographic proof of ownership.

With valuable assets like cars and property representable on the Kiva platform, you can use Kiva NFTs as collateral in decentralized loans. This is particularly helpful if you're not cash or crypto-rich but own physical items of value

5.7 Token Play

As blockchain technology continues to dominate headlines, cryptocurrencies—especially their valuations, and potential to disrupt the financial industry—are of increasing interest. However, the average consumer doesn’t understand what a cryptocurrency is or why it matters, let alone how the technology behind it works.

As a result, the public perception of blockchain application is increasingly narrow-minded and short-sighted. Likewise, the technology’s potential and long-term implications remain esoteric and largely ignored.

Token Play will make blockchain technology accessible to the average consumer through three main tactics:

• Gamifying features that leverage blockchain’s unique applications

• An approachable, consumer-facing brand based on a genuine passion for blockchain technology

• An open platform inclusive to users of all levels of technical knowledge

On a more technical level, we plan to innovate within the blockchain space through practical experimentation and application of digital scarcity, digital collectibles, and non-fungible tokens.

5.7.1 The problems of gaming industry

By normalizing the practical application of smart contracts and cryptocurrency transactions, we will empower everyday consumers with a basic fluency in distributed ledger technology. Some payment methods do not apply internationally or in some countries. International transactions are pretty complex. People need 3rd parties to support payment methods for gamers, purchase in the game like Bank, Finance Company ... This causes the higher transaction fee, wasting time, and has many fees. The larger the transaction volume, the more fee paid. Low security in the game, gamer account information easily hacked or affected by the game developers. In traditional games, the digital assets that the gamer possesses are stored on the developer's server; the gamer does not own it. A game developer can stop or delete the gamer’s account at any time without any reason or warning. Limit transfers between players' accounts in different games or between players.

5.7.2 Token Play Features

Token Play is a game store, a web game that supports game publishers to reach more users. Token Play promises to create an ecosystem with a variety of games. In particular, Token Play points, gaming fees are converted by Kiva coin and are valuable, so users can sell them on the web. Token Play games are built on a free-to-play basis with 2 types of games: free and paid games. Each new account will be rewarded 10 Kiva Coin to the account, corresponding to the cost of playing a game. If the player wins, they will receive a reward (Kiva coin), and use it to continue playing. Token Play games are fun for the gamer, they want to play many times to earn more coins.

• Special organizing method to create fighting rounds for the gamer to fight each other, challenging gamers.

• Convenient transaction and payment through cryptocurrency on the exchange - Kiva Coin.

• Gamers can buy/sell fast, anywhere in the world, with no limit to the volume of purchases or constraints of cumbersome terms.

• Low transaction fees, fast payment due to not through intermediary parties.

• Each Gamer must have a wallet to contain the tokens to play the game or store the tokens they win from the game. It is easy to deposit/withdraw and transfer to account.

• The games on the Token Play allow the virtual assets or the resources that the Gamer purchase, will be saved in the wallet of each user. Users have all rights to buy/sell or transfer assets.

5.8 Kiva Hardware

5.8.1 Unboxing the Kiva Hardware Device:

A package with Kiva Hardware contains the following:

• Kiva Hardware device with a holographic seal over the connector

• USB cable (type C)

• Getting started card (package)

• Magnetic dock

• Recovery seed card (12 words) 2x

• Sticker 4x

Important: Double-check that the package is not damaged and make sure that the holographic seal on your Kiva Hardware is not torn or missing. If you have any doubts, do not hesitate to contact our support. For more information see Tamper-evident hologram and Kiva Hardware packaging timeline.

Note: Please note that your Kiva Hardware does not have any batteries in it. Therefore, you will not be able to see anything on the screen until you plug it in to your computer or another compatible device.

5.8.2 Security best practices

Choose a good PIN

The PIN is a powerful tool to keep your coins safe. It is a barrier protecting your accounts from lurking hands and unwarranted physical access to your device.

Enable the PIN protection and choose a unique and memorable PIN.

Do not use a simple or predictable PIN, such as "1234," or any series of repeated or sequential numbers.

Suggestion: The numbers displayed on the Kiva Hardware screen when it requests a new PIN are in a random order which changes every time you use your device. You can use them as the basis for your PIN if you do not have any better ideas. For example, you can use the first two rows when you see the matrix for the first time.

If you have trouble remembering your PIN, write it on your recovery seed card.

5.8.3 Keep your recovery seed safe

Warning: Malicious websites masquerading as the official Kiva Hardware Wallet might ask you to enter your recovery seed in your browser in the order specified by the website.

Do not enter your recovery seeds anywhere unless the physical Kiva Hardware device instructs you to do so and you confirm your choice on your Kiva Hardware. Always trust only the instructions on your Kiva Hardware device.

If you do not use a passphrase, your recovery seed is all that is needed to access your coins. The physical security of your recovery seed is much more important than that of your device.

If your Kiva Hardware is stolen, it is improbable that the thieves would be able to access it without your PIN. However, if someone steals your recovery seed, your coins can be accessed easily using a different device or wallet.

If your Kiva Hardware is lost or stops working, the recovery seed is the only way to get your coins back. It is crucial to store your seed somewhere safe from theft or physical damage (e.g., in case of a fire or a flood). We recommend using a piece of paper (e.g., the recovery card provided in the package) or cryptosteel. It might also be a good idea to examine Shamir Backup as an option.

Below are some suggestions about where to keep your recovery seed.

Where to keep your recovery seed card

• In a locked drawer, away from water and fire.

• In a place where no potential thieves are likely to access it.

• Somewhere where your family members will find it if something unexpected happens to you.

Where NOT to keep your seed

• Shared or public spaces (e.g., your office work desk)

• Dropbox

• Email

• Anywhere online

• Offline (digital) backup (e.g., phone, digital photos, etc.)

• Encrypted folder

5.8.4 Use the passphrase feature

It is possible to add a passphrase to your Kiva Hardware, which allows you to make your Kiva Hardware impervious to any physical attack. Even if someone stole your device, disassembled it, and broke the chip to extract your recovery seed, your coins would still be safe. The passphrase can be any word, sequence of words or any set of letters (similarly to a password) and is not stored anywhere on the device.

The flip side to this extreme level of security is that if you forget your passphrase, you might lose your coins forever. There is no other way to recover the funds.

Note Every passphrase generates a new wallet. If you have stored some funds in your Kiva Hardware before setting up the passphrase encryption, they will not appear after enabling the passphrase. But do not worry, they are not lost. You can access them by entering an empty passphrase.

Get a second Kiva Hardware device

Getting a spare Kiva Hardware device is an additional safety feature to protect your funds. If your Kiva Hardware device or its recovery seed is stolen, lost, or compromised, you can always send your funds to your second Kiva Hardware or recover them using your seed.

Warning: If you lose access to both your device and the recovery seed, your funds are irreversibly lost.

Do not talk about how much cryptocurrency funds you have

In general, it is better to keep quiet about the balances on your accounts. Talking too much is particularly dangerous on social media and internet forums.

For example, if you tell someone on the internet that you own a lot of bitcoins, some malicious party might read that conversation. These people might then try to steal your funds using a variety of tactics - including cyber attacks and physical violence.