Exscudo: the architecture of the new financial ecosystem
- Exscudo: the architecture of the new financial ecosystem - February 14, 2017
The financial market is traditionally among the first to adopt technological innovation. American and European banks are looking closely into blockchain technology and venture funds are showing their interest towards the crypto-world. This is why the emergence of a technology to unite the traditional financial system with the cryptocurrency market was just a matter of time.
Exscudo, a recently announced project, has this exact objective. The project builds a gateway between the ‘big world of finance’ and the cryptocurrency market. Technically, Exscudo is a financial ecosystem that consists of the following products:
The Exscudo Exchange, a proprietary stock exchange;
EON, the new blockchain technology with support of smart transaction;
A charts server;
Exscudo Channels, a ‘chatwallet’, a mobile app that unites the functions of a wallet and a protected messenger;
A Merchant platform.
Together, these elements form one common ecosystem for users of all levels. Basically, Exscudo allows financial institutions, businesses and private users to cooperate with each other easily and safely in both crypto and fiat currencies. Besides, one of the project’s main goals is to grant easy, fast and legal access to the crypto-world for major financial institutions. The system will be fully compliant with corresponding legal acts.
The core of the ecosystem consists of two elements: the proprietary stock exchange and the blockchain technology called EON. Complementing each other, these two elements form the essence of the project, granting it security and sustainability. This is how it works.
The calculations, accounting and security processes are based on the EON blockchain. The trading and interchange of tokens run on the proprietary platform of the Exchange.
This is how the process looks: the currencies that get into the system are converted into the EON vouchers (tokens). Those are transferred into the Exscudo Exchange, where all the interchange processes run. For example, if the user wants to convert some BTC into USD, he deposits the BTC on his account and requests the exchange operation. The sum is converted into EON_BTC vouchers in the EON blockchain and goes over to the proprietary Exchange. There, EON_BTC vouchers are exchanged to EON_USD tokens. After the transaction is complete and validated, the tokens are converted back into regular USD currency within the EON blockchain using the current exchange rate from the Exscudo Exchange. Those USD are then deposited into the user account and replace the exchanged BTC. For this process, Exscudo uses the methods of hot and cold wallets and a two-factor authentication. In other words, the funds remain on the user account until all operations on the exchange are finished. This grants the users a serious level of security, as well as high speed of transactions regardless of the system load.
The centralized technology also makes it possible to maintain the most favorable exchange rate for all types of currencies. This is good news for all users, especially for institutional investors and merchants that need to conduct a large number of operations daily.
Thanks to the centralization of the Exchange itself, the system easily adapts to high loads. Special algorithms allow it to handle millions of operations per second.
Since the secondary information, such as user data, is not stored in the blockchain itself, EON also exhibits outstanding scalability when compared to decentralized systems. The architecture allows for rapid growth of the number of interchangeable nodes. This allows the team to implement new trading instruments regardless of the traded volume. Also, this technology gives the system the opportunity to increase the number of transactions on existing nodes almost endlessly.
The main security mechanisms is described in the ‘Trading’ section: the key point is that the Exchange does not trade currencies, but only their substitutes, EON tokens. But what about the user accounts?
Exscudo provides for two-factor authentication of all accounts. This method is used for account registration, sign in, and all financial transactions, including deposit and withdrawal of funds. The two-factor authentication involves an SMS-notification, so nobody will be able to enter the user account without the access to his or her mobile phone.
The personal data is encrypted and accessed in a decentralized way. The tech administrators also do not have access to full information. This grants a high level of security and makes it impossible to decrypt personal data to get access to user accounts.
Despite the fact that the Exchange itself is centralized, the access to it runs in a decentralized way, using a system of VPN-tunnels and distributed VPS-servers all over the world, which are protected from DDoS attacks. Such procedures as constant audit and monitoring of the system, as well as preventive account blocking with the following formal recovery procedure, eliminates the possibility of password brute force attacks.
To sum it up, the core of Exscudo consists of a proprietary stock exchange platform and the EON blockchain technology. All Exscudo ecosystem products and services use both these elements. For example, Exscudo Channels, the ‘chatwallet’ mobile app, is a decentralized wallet and messenger that works on EON. Still, it uses the proprietary Exscudo Exchange to exchange currencies within the account. It is worth mentioning that the described architecture allows all Exscudo products to work together easily, safely and securely, forming a new approach to the world of personal – and corporate – finances.