The Melon security approach

the melon security approach hello everyone my name is Rita drinkler I'm the chairman and co-founder together it Mona Lisa of melon port and we are doing technology regulated investment funds completely with ESC 20 tokens and obviously Securities Parliament for us so I'd like to talk a bit about the man approach to security and I'm hope you're all going to see that we try to have a really holistic approach to security so holistic means or like to give to give a short overview I'm going to talk shortly about what is melon but what are our values then a bit theoretical part of it like how we designed the protocol after that we go into court so how we develop our code like from smart contracts to front end how we approach the auditing process and how we go in even current technology and try to shape regulation so Marlin port we're doing technology regulated investment funds so this concept of technology regulation it's really this concept of contracts enforced by technology so if you're doing a smart contracts then you don't necessarily need to need to have a lawyer or an auditor or an enforcer the technology is actually sufficient the technology enforces itself so we're using this concept of technology regulated regulation and build investment funds on top of it so investment funds is really just a set of assets usually from a set of people the investors given to a manager and are holding in one place the custodian the manager then can take those assets and trade them against other assets preferably in a way that is beneficial to the investors so what are our values how do we want to design this we want to design it in a way that is reliable reliable really means that it can't be undone so so since we're doing an alternative way of asset management I think it's important to build it in a way where it can't be undone so it's arguably what made Bitcoin to what it is today the fact that it couldn't be undone the second aspect of reliability is that it's secure so obviously if it isn't secure then it's not very useful that's I think that's why we're all here today as well so at the second value is it should be permissionless so permissionless really means that it's not for us to decide who can and cannot use Mellon the same it wasn't up for Tim berners-lee to decide who can use introduced the Internet and the third one is it should be ownerless so unless just means you know not controlled by a central party Mellon should be a common good the same way the internet is a common good so Malan this is a short overview of the design of the protocol in the middle you see a Mellon fund a Mellon fund or like the core aspect of it is really just a set of smart contracts this set of smart contracts acts as the fund custodian so as I'm sure you all know smart contracts don't have private keys so they can spend assets themselves they need to have custom code on how to spend those assets again it's really a core aspect of our security approach the second thing those more contracts act for is or they are supposed to be or they are the fund accountant meaning they calculate the performance of the manager they calculate the share price they calculate the management fees the performance fees like the incentive layer for the manager and to do so they need to have data so they need to have data of the prices of the assets and that's where the data feed model comes in so the data feed model is essentially just another set of smart contracts which deliver data to the blockchain so we were very lucky with having Oracle eyes together with crypto compare building in a data feed model for us that uses native proofs to validate the data which means that data from its source to the blockchain is almost impossible to manipulate another great data feed module just recently announced is the one from Thomson Reuters so you can have you can have your your melon phone now evaluated against data delivered from Thomson Reuters great so we have fun custodian we have fun accountant if you look at what fund administration does then we see fund administration does fund custodian from the content kyc AML and risk management so we just seen we can solve two of them one custodian and from the accountant with more contracts so how do we tackle kyc AML and risk management so that's where the participation model comes in and there is management module so for those that don't know like fund administration they handle a trillion dollar it's a trillion dollar industry so okay so participation so the way participation works is really if someone wants to invest in a melon fund on smart contract level it's like a phone call to another set of smart contracts with a Widow's set of parameters and essentially asks the participation model is this person allowed to invest or not so for example we are working with the government of took that essentially then you know they work with you port who have like to register citizens so so this participation module will be then like Carlson smart contract level to the government of Truman asks is this person registered with us if yes this person is allowed to invest if not and not so but this really extends to just government of - like it's essentially every jurisdiction or every certain need can be implemented in such a module and the fourth aspect of fund administration is risk management so risk management is similar so if the manager wants to make a trade it's like calling the risk management module before the trade happens is this trade allowed yes or no so for example one one example for risk management is only trades are allowed that are above the current market price so that trading that is not beneficial for investor becomes really hard and really leads to a system where the manager and investor they don't actually have to know each other the same way if you make a Bitcoin transaction you don't actually need to know who's behind the public key it's efficient to just trust in the technology does technology regulated funds okay so what what happens if if this set of smart contracts now needs to be upgraded so essentially we have this concept of version which is like protocol version similar to a serial all of the Tamlyn phones are identical in each version and if if a version now needs to be upgraded and it's essentially just the governance layer that will be most likely just a set of people that are kind of voted in by that token holder so it's a small set of people thus they can act efficiently and fast if needed yet they're still legitimized by by all of the token holders so yeah those set of people then can add or remove versions effectively operating right so now a bit about how we actually caught these things so we currently use step so for those that don't know taps suite is really a great tool it's it's really nice for solidity unit unit tests and they have like a Haskell implementation of the EVM so it allows developers to really dig deep into the lowest level of the EVM to see where where the park is for example a second great tool that we use is Oriente so we're currently funding the development of int it's essentially a smart contract analyzing tool it allows to test your contracts against certain properties so for example re-entrance e can be checked automatically with this tool another really really great tool is you can build in custom assertions so for example you know assert that the accounting checks out after each function call then you can apply int and try to violate that assertion so if that evaluation isn't if that assertion isn't violated that's a good sign it's actually not possible to ever violate that assertion and we integrated that now with Travis CI so every time you make a commit re-enter gets wrong then we use trust man tests Chazz Montez is really useful for us for this holistic approach so we with Jasmin we can build like expectation sets and then share them across github repositories so for example we have the same expectation sets and more contract level as we have in balance is our JavaScript library and we also just recently switched to parity checker so we have the parity deaf chain instead of test RPC so how do we approach fronting so maybe a short explanation like if you build smart contracts and if like 99% of your users end up using a front-end those contracts then arguably the front-end is similar as important as what the security of the front-end is similar to as important as the smart contracts itself so that's why we use ipfs IVFs is really great for security because it has this content addressed nature so content addressed really means that the content that you view on ipfs is addressed by its hash so you can verify on our key top that in our you know built folder that the hash that we create it's actually the hash that you access on ipfs so there's no way to build in any malicious code you know what that for example tracks you or you know tries to steal your private keys or yeah collect some data so it's really transparent and really reliable as well because you know it's hosted on essentially a BitTorrent swarm so yeah makes it really reliable obviously permissionless and nonetheless as well then we have melon male so melon male is is is essentially a messaging service this as secure as your crypto by the way if you want to see the front end its melon dot font if you see that the mail service it's Mallen dot email it uses your private key to encrypt your communication and then starts it on ipfs so the reason why this is important so imagine you work for Jamie Dimon and you know he threatens you to fire you if you ever trade with crypto but with melon man you still can use you still can have a melon font and you know having having essentially just your public he exposed your investors can still communicate with you and you never share anything more than your public key so how we approach audits and park bounties so we start with audits from well-known and well-respected individuals and companies and then open it up to a general Park bounty so that everyone can participate and eventually we deploy live melon fund that is funded and whoever got whoever can hack it can have the amount that it was funded with by the way we always incentivize people's if you found a vulnerability in our codes no matter if the bug bounty started already you will get incentivized for it so so as as technologists we love what we do and technology is really important for us but I think a holistic approach to security goes beyond just technology so that's why we created mama it's the multi chain asset managers association which is essentially a trade body that tries to get innovative companies together at a table and allows them to give her voice so that the conversation isn't just dominated by the big banks or the traditional asset managers but that you know what if people and companies actually can organize and after voice as well in order to shape legislation and regulation great so lastly I check out melon not fund it's it's a complete line i PF s as a beautiful interface to it check out melon dot email got I entered at Milan dot fund checkout github.com slash melon project I will of requests will of issues for us on Twitter at melon port and join mama if you're here representing an institution maybe just lastly there is my it's good to go to an endowed fund and and start practicing a little bit is that we just recently announced that we're going to issue 500,000 melon I think it's worth like thirty thirty five million right now just in the context of fund management competitions so if so you can participate those and if you're good at it you got a lot of melons if you're not so good you'll get still a little but not that much so that's that's essentially how we're gonna issue those those remaining balance yeah and by the way also on key top like we have if you're an arbitrator as developers we already have like an open source trading bot that you can use a modify and you know why trade manually if you can build a trading bot we have time time for one or two your questions any any questions question hello first of all congratulations about mama you know just working on Switzerland legislation or working with other countries like us or Singapore so so we would like to make this available for everyone but obviously our time is very limited and we can't like we can't make this compliant to every single jurisdiction so we kind of start a bit government of - just to have like you know I guess a signal effect a signaling effect that this is actually possible that the governance and covenant governments and jurisdictions actually want this but actually like with the participation module anyone can build those and we intend to incentivize like the people that build good participation modules and good risk management modules you'll get incentivize for it yeah I I was so concentrated on my own question that probably this was a me question but the requirements to come I see whose requirement is it is it the fund manager who is only allowed to serve kyc customers or is it you as a software developer oh no it's it's the investors essentially like it's its requirements that are like what is required for an investor to invest okay so if you want to attract regular investors they need to prove to their I mean the people watch of them that then they left and money managed by identifying managers is that requirement so it's because I thought okay I see requirements for the investors so the investors need to be kyc and it's not their requirement so it's not their need that there is because I mean I can be an investor I mean there are investors who want to remain anonymous right right but you know that in a similar way that there might are probably a lot of managers that don't want to have anonymous investors okay yeah yeah sure I read the initial roadmap was the product to be delivered in two years but it was early one year why was that yeah so we're we're well ahead of schedule so we are aiming to have this life with the basic form of governance next February 2018 so that's one year ahead yeah but what happened that you could make it so fast faster than you plan so we really like like I think in all our communications we're really not hyping it's just in the same concept like we didn't we didn't want to hype and say okay we have this in two weeks but you want to be we wanted to be very conservative if you're faster and it's great for everyone if you're a bit slower then we still have some cushions you know Thanks okay one last question hi I'm wondering how how mature is the integration with the exchanges so far and what's your roadmap on on integrating with them yeah that's a great question so for now we're using the exchange of YC stacks which is like a fully decentralized exchange but we're working hard on integrating other exchanges as well but also this like it's all it's all a matter of time resources and we want to have like a working product as a live working product as soon as possible and from then on continue like integrating other exchanges [Music]