Security and decentralization are some of blockchain’s strongest features. Furthermore, its immutability feature means that once transactions are made and finalized in the network, there is absolutely no way to reverse them.
However, these features can also come at a disadvantage for users who might happen to need help in retrieving the assets they sent to the wrong addresses. ETHBox’s solution is to prevent these situations from taking place.
ETHBox supports the exchange of ETH and ERC-20 tokens. Its main purpose is to ensure that the sender and receiver in any particular transaction can vouch for its validity, preventing the possibility of people sending tokens to wrong wallets.
ETHBox was a project that began out of the need to address the growing number of people losing their crypto from errors in inputting transaction data. It is almost a very common occurrence where users input the wrong wallet address, or commit a typo, whenever making transfers.
On the Ethereum blockchain, records reflect that at least 12,600 ETH has been lost simply because users sent their tokens to incorrect or non-existent addresses. And as we know from the nature of the blockchain, these tokens are irretrievably lost with no way to recover them anymore.
This has spurred the need for a platform that will secure, not only a safe transfer of assets, but also accuracy in transactions. This is where ETHBox can come into the picture.
Check out our interview (or podcast) with Co-founders Lukas Prashner, Lukas Schiefer, and Paul Simode:
What is ETHBox?
ETHBox is a digital escrow service for peer-to-peer cryptocurrency exchange powered by smart contracts, which aims to provide a solution to the growing problem of cryptocurrency users who accidentally send their funds to wrong addresses.
This works by requiring a two-factor authentication system through MetaMask and an arbitrary passphrase for transactions conducted under ETHBox. The process goes like this. The sender of the fund first deposits them to the escrow which is the ETHBox smart contract.
Then, the receiver has to connect with the ETHBox system through MetaMask using the address or passphrase provided by the sender. Once everything is confirmed, ETHBox’s escrow smart contract will finalize the transfer.
As of now, ETHBox only supports the exchange of ETH and ERC-20 tokens. The team is working on expanding its functionality to networks other than the Ethereum blockchain.
To ensure that all transactions are safe and secure on the application, ETHBox implements a decentralized structure, which allows the platform to maintain a transparent record of all the activities made with it, which can also be viewed by anyone.
Smart contract codes that function as the backbone of the software are also made secure with the help of blockchain cryptography technology. No one can alter the smart contract code and no third-party can interfere with any on-going transaction.
On the part of passphrases, ETHBox ensures that they do not simply come in pure, text form. Instead, they generate hash values that users need to also provide in order to verify their transactions. This helps in providing strong security for the platform because it also eliminates the possibility of “brute-force” attacks.
And while these forms of breaches also require an expensive amount of resources to conduct, any possibility cannot be discounted on the blockchain. This is especially concerning if we’re talking about cryptocurrency transactions that can amount to a lot of funds most of the time.
This design allows the platform to provide a two-layer security solution, with MetaMask as the first, and the cryptographic encryption for passphrases as its reinforcing layer.
ETHBox has other use cases too, apart from just the facilitation of transactions on the Ethereum blockchain. While the transactions on the platform are transparent and can be viewed by the users as they wish to, ETHBox ensures that the senders and receivers cannot be traced. They do this by maintaining the anonymity of blockchain transactions.
Over-the-Counter (OTC) trading has also been made much easier through ETHBox. In many centralized and decentralized exchanges, there is always a risk in peer-to-peer transactions. There are multiple reports on cases where abusive and malicious traders scam other users.
With ETHBox functioning as an escrow smart contract, the likelihood where one takes advantage of other users in order to steal funds from them is significantly lowered. Any term specified in a contract must first be followed before a transaction is closed.
ETHBox’s native utility token is the EBOX token, the main utility being that it provides discounts when using its services. For example, using their platform when sending cryptocurrencies, their additional added privacy features and OTC trading.
In terms of tokenomics, it follows a deflationary model which helps sustain the token’s value over time.
EBOX holders can stake them to earn additional tokens for four years after the token generation event (TGE). There is a locking period of 10 days. 18% of the total token supply will be reserved for staking. Also, holders can receive their share of the profit of the platform proportional to their holdings in its regular payout scheme.
EBOX holders compose the community governance framework of the platform. They can vote on the future direction of the platform and its developments.
There are also additional rewards and fee discounts awaiting holders of DDIM or DUCK tokens since DuckDAO is an ETHBox partner.
ETHBox is a promising application of the use cases for smart contracts. With its programmability and security, smart contracts can ensure that the transactions it facilitates are safe and trustless. The escrow system is not entirely new, however. But regardless, the benefit that it can contribute to peer-to-peer exchange cannot be understated.
What’s interesting to look forward to is how they can expand the project into providing other related products and services in the future. As of their latest report on their roadmap, the team is working on the implementation of staking, chain extension with Polkadot, and the development of payroll features. If these additions become successful, ETHBox can be set for larger adoption and help make it stand out in the cryptocurrency market as a secure asset transfer solution.