Future work and challenges

SFT is widely circulated, derivative assets based on SFT are flourishing, and there are still many challenges. The security of Staking assets managed by the SFT protocol is the premise, otherwise, there will be no more Stakers wanting to staking through SFT. If we have a secure protocol, SFT can also survive cybersecurity attacks and black swan events, even if it manages countless staking assets. With security, developers may be willing to develop more applications based on SFT and derive more assets. Therefore, for SFT, there is still a lot of work to be done.

● On-chain governance

SFT is a decentralized protocol, and its upgrade direction is closely related to governance. For many PoS consensus projects, one of the most important practices is to set TokenStaking as a voting method. Different projects adopt different staking methods, and the specific implementation may be different, such as stimulating voting participation through incentives, or providing reference for voting through prediction markets, or even avoiding the convergence of voting results through the entrustment system. In reality, there are a lot of poll question. Participation and voting results were widely criticized. Providing more references and incentives can effectively solve the voting problem. However, there is no perfect solution to the current voting mechanism. Most solutions are indirect, combined with Blockchain optimizations. So voting is always a tricky issue. While the incorporation of Blockchains increases efficiency, this does not solve some fundamental problems. SFT will implement the basic voting logic at the beginning, and then upgrade to the governance logic on the chain, and put the resolution of the voting problem in the long-term optimization plan.

● Private key maintenance method

Currently, the private key signature of a multi-signature address is a threshold multi-signature algorithm participated by multiple special verifiers. The verifier's private key is stored on the verifier's local server (after encryption), but the asset custody and the existence of the verifier are not permanent, so the two parties may not always reach an protocol in reality, which will jeopardize the storage security of assets . At present, SFT guarantees the randomness and timeliness of private key storage through regular rotation, but frequent replacement of validators is a waste of computing resources, so the frequency needs to be kept at a reasonable level. At present, the optimal frequency has not been determined, and some future work will focus on the balance between frequency and safety.

Likewise, threshold multisig still requires trust in random validators. SFT is researching new algorithms that can be used to reduce trust to facilitate protocol security upgrades. At present, there are potential cooperation opportunities between the research direction of privacy computing such as MPC and TEE and the security model required by SFT. Privacy computing technology is also developing rapidly. Engineering application projects have sprung up like mushrooms after rain. Therefore, we will continue to explore in this way in the future work of the contract layer.

● Distributed smart contracts

When the holder initiates Staking through the Stake contract, its tokens will be locked by the original chain. The security mechanism of the original chain ensures the security of the pledged tokens. However, due to the existence of cross-chain binding asset SFT, the mapping relationship of asset multi-signature accounts will be stored in the Staking contract. When there are more tokens on the original chain, the contract is more vulnerable to attack. Although the mapping relationship is not the decisive factor for the redemption of assets on the original chain, the attack will bring harm to the system. SFT is trying to create a distribution system that will generate staking contracts based on the value of staking assets. Each staking contract will set a threshold. When the threshold is exceeded, staking for that contract will stop and a new contract will be created instead. Dynamic settings solve the problem of asset centralization and reduce the risk of large assets being attacked. There are complex setups in the industry to ensure that the Staking contract does not fully own the locked Staking assets. Instead, when the staking contract is invoked, a separate contract with only the rights of the holder is created. This contract has a strong correlation with a single Staker. In addition, this contract will be audited by a third-party auditor before publication.

● Original chain asset security

The issuance of SFT depends on the proof of the original chain - when Staking is carried out on the original chain, SFT will be minted and sent to the corresponding users. The SFT protocol guarantees the unique correspondence between SFT and the original chain assets and guarantees redemption. However, if there is a problem with the Staking module on the original chain, the value of SFT will depreciate accordingly. This mechanism is still being polished and perfected, which is also one of the priorities of SFT's future work.

● Distribution of Alternative Tokens

The SPD issued through SFT represents various rights (such as redemption rights, income rights, voting rights, or other ecosystem rights) of the original StakingToken. Staking Contracts currently realize basic redemption rights and income rights. And it is developing and researching the SFT rights corresponding to the original chain, and even providing more rights on other chains.

At the same time, the fairness of rights distribution also needs further polishing. Due to the inconsistency in the distribution rights mechanism of different PoS public chains, it will take time to improve SC access. A perfect product can remain exactly the same as the original chain, or even better. It is very important to establish a common authority distribution mechanism, which can not only reduce the difficulty of development but also improve user satisfaction. At present, SFT adopts a simple and easy-to-understand equity allocation method, adhering to the principle of openly assuming/sharing risk equity, and assigning equity to Staker. However, due to the inconsistency with the original chain mechanism, it may cause some doubts. We still face many challenges.

● In addition to pledged assets, issue more alternative tokens

The essence of SFT is to issue alternative tokens based on Staking assets. Instead, the underlying assets for issuing alternative tokens are staking assets. What if the underlying assets could be expanded into more forms of encrypted assets, or even derived from non-encrypted assets? If it can be realized, the prospects will be huge. This is a mid-to-long-term direction worth exploring.