New Draw Mechanism

The final stage of the second round of Ethfinex’s new decentralised token listing process is about to begin!

View a recap of the full process on nectar.community, Ethfinex’s community portal.

The Draw

After a token is proven to meet the Ethfinex listing criteria through the Kleros conflict resolution layer, and awarded a badge, it is added to the pool of eligible tokens. This pool can contain a large number of tokens, however we want our community of traders to be able to make an informed decision when they spend Ethfinex Voting Tokens (EVT) to select a token to be listed on Ethfinex.

As a result we decided to break the pool down to a more manageable number to research: 12.

To ensure fairness and transparency, the tokens in each voting round will be selected at random by a public draw once a month. The first draw will occur on Tu April.

The Mechanism

Here is how our random draw mechanism works:

1. A week before the draw we choose an Ethereum block number, which is anticipated to be mined the day before the draw.
2. Once the block is mined we take its blockhash.
3. We then hash (SHA256) this blockhash with the address of each token in the pool.
4. We then take the first 4 digits (16 bits) of the outputs and compare them.
5. The 12 largest win and those tokens are selected to be voted on next.

Note that we rely on a blockhash from the Ethereum blockchain, which can be a bad source of randomness for high value applications such as gambling! Any random draw mechanism based on blockhash can theoretically be manipulated if the miners are incentivised well enough; however we believe that the economic cost of such an attack far outweighs the return of this particular application.

Example

To illustrate this, let’s compare Nectar (NEC) and Maker (MKR) based on a block mined on 23 April 2019.

1) Choose a block

Block number 7623423

2) Take the blockhash

Blockhash – 0xbe2ad10cac807c9d1bf19583f572c7cbb5bcf05720beb0bfce3325e495f12af7

3) Hash contract addresses with blockhash

Nectar address – 0xcc80c051057b774cd75067dc48f8987c4eb97a5e

Maker address – 0x9f8f72aa9304c8b593d555f12ef6589cc3a579a2

SHA256(NEC address,Blockhash) = cfcf56f215d3521c5dba6a5e246a2269e0b08bae56e8a3f5c32452efe08e6a5c

SHA256(MKR address,Blockhash) = b1a75077a52ef985c80093a30fc06eff1be158a3b173de77a13f710e0c43059f

4) Take first 16 bits

NEC – cfcf = 53199

MKR – b1a7 = 45479

5) The largest wins

NEC wins  (53199>45479)

For any questions, feel free to reach us on Twitter, Telegram or at [email protected]

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