VLINK a decentralized file validation service

Introduction

VLIK is a simple online file validation service where signatures are generated from the hash of a file, and then written into an immutable blockchain. Clients can then check the authenticity of files received by checking the signature of the file on hand, with the signature saved on to the blockchain.

The name VLINK represents it’s inspiration from V-ID, a similar block validation service that is currently a centralized solution. The LINK represents the use of Chainlink oracles to determine the price of each file validation in Ether.

Purpose

Currently, VLINK is a bootstrapped startup. I have 3 small clients, but with the lack of funding due to of COVID-19, VLINK is facing difficulty in scaling to cater to more clients. My objective is to raise some funds from the dxDAO ether pool, and revenue generated from the VLINK to be shared among all dxDAO token holders.

Funds will be used so that I commit full time to this project, as well as hire additional manpower for marketing and soles roles. More information on how the funds can be used will be shared towards the end of this post.

VLINK Company
I will be heading the VLINK Company. The company is for-profit and will set up infrastructure for the interface layer of the file validation service.

Infrastructure
VLINK is made up of two layers, the interface layer and the smart contract layer. The smart contract layer is singular, whereas there can be multiple interfaces, which provide entry points to the smart contract layer. The VLINK Company will provide PAID enterprise support to potential clients, thus generation a revenue stream.

Clients or individuals who do not want to pay for enterprise support can simply build their own interface. We aim to make this process simple, with prebuilt libraries and good documentation.

The interface layer provides:

  1. An Ethereum Node, with an account loaded with Ether
  2. A service with REST endpoints to allow the uploading of file. The file hashing is also done on this service.
  3. A service which relays the file hash to the Ethereum node to be stored on the relevant smart contract

The smart contract layer consists of these contracts:

  1. Hashing contract – provides setter and getter to save and obtain the file signature to and from the blockchain.
  2. Price contract – Determines the price per file validation in ETH via Oracles
  3. Disbursement contract – Pools and disburses revenue to dxDAO stakeholders

Economic Model
Our current model requires parties to pay to write the signature to the blockchain but reading & verifying them is free.

Our economic model also does not use any form of additional ERC20 tokens, which is common with other ‘decentralized’ services. Our native token will simply be Ether.

There will be two revenue streams:

  1. VLINK Company provides enterprise support for companies wishing to use the decentralized VLINK service. Companies can opt to not use this service and set up their own infrastructure from our open source codebase.
    -> 10% of the profits generated from the VLINK Company will be used to directly buy dxDAO tokens from the bonding curve, pushing up the price of the dxDAO tokens, and then immediately sell them on the bonding curve, thus burning them. We aim to publish our audited reports on a quarterly basis, and purchase of dxDAO in a quarterly timeline.

  2. Each File Upload costs a fixed price of $1USD per file. All participants regardless if their interface was set up by the VLINK Company or self-hosted will have to pay this fee. This fee is mandated on the smart contract level, and the equivalent value in Ether will have to be sent alongside the file hash and gas fees.

Each file hash uploaded by a client directly benefits dxDAO stakeholders:
-> $0.20 (10 cents) in Ether will be accumulated in the Disbursement contract.
-> $0.70 (90 cents) will be used to cover gas fees, with the remainder going to VLINK Company’s account.
-> At the end of the month, this Ether minus gas fees will be Airdropped to ALL dxDAO holders, based on the number of dxDAO tokens that they own.

Thus, it can be seen that dxDAO holders will benefit from 2 revenue streams.

Financials

We have run a beta test with 3 enterprise clients based in Singapore, with a total of about 50,000 files hashed and uploaded to the Ethereum blockchain. This is done on the ropsten network. These 50 files represents approximately 3 months’ worth of paperwork.

In our beta test, we used the VLINK-T ERC20 token as an economic model. This VLINK-T will be removed moving forward. You can see all the hashing transactions here:

Each token transfer represents 1 file hash and upload.
Proposal
The current proposal is at phase 1 will request for 15eth for me to commit full time to this project and pay for operating costs.

Phase 0 (Completed)
Creation of the beta platform for simple file validation service and then uploading it into the ETH blockchain. This stage is done, and used the VLINK-T token as a payment method. This stage has already validated approximately 50,000 files

Website: https://dashboard.vlinkt.com

Phase 1

Move the project away from using the VLINK-T ERC20 and upgrade the smart contracts to the validation, price and disbursement contract model, along with required tests

Redesign a separate interface layer for 3rd parties to interact with the same contract layer and release it as a community edition

Payout of 20 Eth (4000 USD)

15 Eth will be used so that I can commit full time to this project. 5 Eth will be used to hire a designer for the redesign of the interface layer.

Following the completion of phase 1, we will be able to onboard the 3 enterprise clients that is taking part in phase 0 and officially launch.

Future Phases

Following the end of phase 1, we will finally be ready to onboard new clients.

I expect to overall validate a grand total of at least 300,000 files before the end of 2020. The amount of eth reqeusted to be released will be determined as we are nearing the launch date.

3 Likes

This is a very cool idea for many reasons but I think the DAO will need more detail to go off to make a good decision

What are the mutual benefits on your side? How and what does the DAO actually govern if you turn over the smart contract layer?

Hi Georgies, thanks for asking questions and apologies for taking some time.

One of the problems of the current file validation industry is the siloing of different file validation solutions. For example, a company using Acronis Notary to validate their files require partner companies to also be a client of Acronis Notary. We can see that there is a significant level of inconvenience. Smaller companies might not want to sign up for additional services that they might not use for long. Many of these services will try to lock users in, and make you pay for my files than required.

How can we create a system where there are hundreds of participating companies, without the need for companies that wish to verify files to sign up with a certain client? We can see how the situation now points to decentralisation being the answer.

Remember, signing of the files is done on the interface layer. This means that companies are free to use any signing algorithm that they want. Companies who wish to verify files merely need to comply with the spec the signer has specified. The smart contracts simply provide an interface to store the file signatures and retrieve them.

Centralisation by Decentralisation

Decentralising this file signature service actually provides many benefits:

  1. Companies can now easily sign and verify files between partner companies without being lock with a particular vendor
  2. Companies have the freedom to use any signing algorithm they want and pay as they use
  3. There is no central authority that stores all the file signatures - being on the blockchain ensures that they are immutable indefinitely.
  4. Being on the blockchain also means that companies do not need to maintain their own database of file signatures. Simply sign and forget. There is no risk of data loss.

Why do we need governance?

We foresee that the smart contracts used to store and validate the file hashes will be used for a very long time. There will be a vested interest for companies to maintain these contracts. How can we ensure a fair way for companies to be involved?

These are the future changes that can possibly be changed

  1. Total cost of uploading a file signature
  2. Changing the % profit going to dxDAO holders

How can this be done in a fair manner? The answer lies in allowing stakeholders - individuals who receive dividends from this project will ideally vote for positive changes as the industry also evolved.

Why dxDAO

One of the problems with these business model is that it requires large upfront capital. Many smaller companies will not want to join the network until big companies such as the Big4 actually participate in it. Now, large enterprises have a large number of files to upload and thus a large revenue stream. However, many of these companies only do their payouts at the end of the service cycle. This means that the VLINK Company needs a large input of capital, and the dxDAO’s capital raising mechanism is perfect to fulfil this role. VLINK Company lacks significant capital to do so.

We would like to share the risk of pursuing this business idea with a decentralised community and in return return back a share of the profits to token holders.