Protocol To Reduce CEX Risk

Hi guys

I built a prototype and wrote a white paper about how centralized exchange risk could be reduced.

The prototype (whitepaper is linked on the site) can be found here: https://the-vault-protocol.github.io/index.html

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The basic idea is the following: A vault (the main smart contract) can be created permissionless for any ERC20 - Exchange pair, so for example USDT - Binance. You can then bring your USDT to the vault and the vault mints iUSDT and cUSDT for you. You can, at any point, convert iUSDT and cUSDT back to the original USDT, so those new tokens clearly have value. You then use cUSDT as collateral on an exchange. Now, in case of exchange default (which is determined via voting oracle), the vault unlocks and allows you to redeem your original USDT with cUSDT only (which you have kept secure and off exchange).

More details about the protocol and economics of it can be found in the whitepaper.

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Would be interested to hear your feedback. Bear in mind, I am no frontend designer, so it's about the functionality for now. Obviously, there are still a few challenges here like getting tokens listed and making the voting secret without impacting UX too much.

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If anyone wants to try, I can drop you some ABC Tokens (a generic ERC20 token I created for testing), some protocol governance tokens and Sepolia ETH (if you don't have already). Everything is running on the Sepolia testnet for now to get feedback and maybe collaborators on board.