Distrubuted Lab Shared Details Of Their Work On Ukrainian Blockchain Auction


Platform eAuction launched in test mode this February is one of the world’s first serious blockchain projects in public management domain. Prior to eAuction’s release, e-gov and blockchain were mostly associated with projects like Bitnation and various notarization tools.

EAuction project was launched by Innovation and Development Foundation Reforms Lab under the auspices of Unity Bars, Microsoft, PrivatBank, and Oshchadbank. Combined efforts of those organizations allowed the team to develop eAuction on a tight schedule in the up and coming context of Ukrainian reforms.

ForkLog talked with Dr. Pavel Kravchenko, one of developers at Distributed Lab that had created eAuction to find out more about the work on the platform and other projects of the team.

FL: Ethereum is a popular solution for e-gov projects like Bitnation or E-Vox. What solutions did you use for eAuction?

Pavel Kravchenko: We used modules of our own blockchain system INFRA based on Stellar’s source code. Its basic feature is support of multiple blockchains capable of interaction, as well as various kinds of local consensus. In addition, it contains no built-in currencies. Thus, it is a selection of protocols and libraries for creation of financial web, i.e. an environment for settlement of transactions.

FL: How does your system get decentralized, and what is the source of truth upon decisionmaking?

Pavel Kravchenko: In order to avoid centralization we decided to grant anyone an opportunity to launch a trading platform within the system. The platform would act simultaneously as an access point and a node processing transactions. In other words, anyone may launch an access point to government-held auctions, and provide it as a service. As the development continued, we decided that people’s bids for items across the whole platform had to be the ultimate truth. After all, it is profitable to use honest platforms, and the more honesty there is, the more money flows through it.

FL: eAuction uses Proof-of-Stake. How does influence distribute within an auction?

Pavel Kravchenko: Users pay a fee for their stakes to use the platform, so we decided to implement a proof-of-stake-like consensus algorithm where the platform’s amount is equal to the percentage of money sent through it. In case a platform is corrupted (for instance, allowing only selected to offer their bids for an item), users will simply switch to a different platform thus increasing its stake and influence.

FL: How do you confirm the authenticity of payments? How do you solve the issue of interacting with today’s banking system?

Pavel Kravchenko: In order to synchronize blockchain system with the existing banking infrastructure we decided to use signed receipts from banks. When someone places a bid, the payment goes to a particular account of the platform, and a bank may produce a receipt that will be added to the blockchain. It confirms the money has really been sent via particular platform. Additionally, it solves the KYC problem, as any bank always checks for authenticity of payer’s data from the receipt.

FL: How do you see the platform’s further evolution?

Pavel Kravchenko: The platform’s evolution will further take several directions. First of all, it’s provision of more banking services as part of the auction, like bank bonds. Then we intend to add new item categories, mostly commercial, like collateralized property of banks. It all logically leads to growth of number of platforms launched as businesses. The more platforms, the more access points for auctions, and nodes. The whole system thus becomes more decentralized.

FL: Apart from eAuction, what else has Distributed Lab done?

Pavel Kravchenko: We work with cryptocurrencies and decentralized apps in several directions in Ukraine and globally. In particular, we develop customized projects, provide consulting, carry out open researches and run open source projects, create our own products, hold conferences, hackathons, and meet-ups, as well as educative events and cryptocurrency courses.

FL: How long have you been engaged in cryptocurrencies?

Pavel Kravchenko: The company was founded in November 2014 in Kharkiv by Vladimir Dubinin, Stanislav Cherviakov, Lilia Vershinina and myself. We came up with the idea of establishing a lab after several long-term visits to hi-tech strongholds of the Silicon Valley, Berlin, Amsterdam, Singapore, and New York. It was clear that bitcoin wasn’t everything, and demand for cryptography and decentralized systems experts will only grow, mostly from banking and finance industries, public management, data storage systems, and so on.

FL: What finalized projects can you recall?

Pavel Kravchenko: We developed a multisig wallet, worked with decentralized exchange Bitalo, and provided additional services for the same project, like AirBnb-like ones, or a prediction market. A serious part of NEM project was written by our experts. Three members of our team created system core for Tembusu (the project is inactive now, yet the technology is being reborn). Then it’s TreeTag, a blockchain-based system for wood-working industry set to reduce illegal deforestation. There was Decent, a decentralized platform for content distribution. There are more projects, but I’m not ready to speak of them right now.

FL: Summer 2015, you organized Blockchain Incredible Party in Odessa. Why not doing it again?

Pavel Kravchenko: Yes, a series of BIP conferences is the event that made people come from afar. The first event was a great success, everyone was excited. First, summertime Odessa is a hit. Second, we did our best: we met speakers at the airport with champagne, hired the best venues for pre-party and after-party, and seriously worked through all organizational issues. BIP is not a one-day event. Half of the speakers spent a week in town and felt like home. We thought mostly of foreign specialists we had made friends with. They come to share their experience in a relaxed environment. Winter 2016, we decided to press the success and held BIP 001 in Lviv. The second conference was as effective and interesting. And now, on July 7, 2016, the third BIP001 conference will take place in Odessa again.

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