RESEARCH SUMMARY
Obscuro
Obscuro is a decentralized Ethereum Layer-2 Rollup protocol designed to achieve privacy, scalability and prevent Maximal Extractable Value. It brings innovative capabilities to new and existing Dapps through Privacy, allowing for more use cases without any sacrifices or friction when moving to Obscuro.
“A layer 2 is a separate blockchain enabling fast and cheap transactions for the base layer, while it inherits the security, data availability and access to liquidity.”
Technology Summary
TEEs – Privacy
Obscuro leverages hardware-based Trusted Execution Environments (TEEs) for encrypting the ledger. It is built on Intel’s SGX technology and is designed to confidentially deliver guarantees with certainty over the code running. Essentially, it allows for smart contracts, decentralization, scalability, and privacy in a way other privacy techniques can not provide.
Proof of Block Inclusion Protocol (POBI) – Confidential Roll-Ups
While Ethereum nodes process the winner from the previous round, a new one begins. Aggregators process transactions submitted by users. They then take the Merkle proof of block inclusion (POBI) and feed it to their TEE. Through that, each TEE replies with a random nonce. The aggregator with the lowest nonce wins the round, and the rollup is published to an Ethereum block.
Tokenomics
$OBX – Utility token on the Obscuro chain
- Total Supply: 1,000,000,000 | Seed supply: 90,000,000
- Use Cases: Incentives and rewards for node operators, fee payments, vote on proposals for changes, incentives for the ongoing development (e.g., grants)
Team
The fully doxxed core team, consisting of 9 full-time team members. Most of them come from a company called R3. R3 is a corporation making use of DLT to build applications while also building a confidential computing development platform for regulated industries where trust is critical. Companies using their services include Bank of America, Morgan Stanley, Wells Fargo, ING, NASDAQ, Credit Suisse, and many more.
- James Carlyle (CEO)
Chief Information Officer and Chief Engineer at R3, Chief Engineer for Personal and Corporate Banking Architecture at Barclays Bank - Tudor Malene (CTO)
Senior/Lead Engineer at R3, filed a patent for a notary system for a distributed ledger while working for R3 - Gavin Thomas (COO)
Head of PMO and Engineering COO at R3
- Mike Ward (Head of Strategy)
Head of Product at R3, Product Business Group Lead and Senior Product Manager at Microsoft
Investors
$2.5M (Pre-Seed Round): Incubated by R3
CATEGORY
Layer 2 Privacy Centric Solutions
BLOCKCHAIN // SUPPORT
Ethereum
USE CASES
Private NFTs
Frictionless moving between L1 and L2s, security against front-running, privacy trading
Dark Pool Trading
Trading securities hidden, until execution is done
Gaming
Computational privacy
Private Agreements
Sealed auctions & service-level agreements
Identity
Privacy focused on-chain KYC
SOCIAL STATS
CURRENT PHASE
Testnet | Seed
IMPORTANT DATES
TGE: After the Obscuro testnet is substantially complete
Mainnet Launch: H1 2023
Pros
- Very experienced team in Web3 development
- EVM dApps can leverage the privacy, without any sacrifice (ease of onboarding)
- Well aware and transparent about their challenges and plans
- Superior tech in the L2 space
- New use cases for enterprises / institutions
- No friction in UX
Under Debate
- Their ability to scale a company
- L2 space in general is very competitive
- TEE as a point of attack
- Unknown partners
- 32% is dedicated to seed investors, which could lead to conflicts of interest
Cons
- Unclear TGE date
- Potential privacy regulations
- Weak marketing/community building (as of now)
- Teams business experience is weak
Opinions
RESEARCHER OPINION #1
Jesse | Sr. Research Analyst (non-VC perspective) on October 3, 2022
The premise is great, given that they lie between zero knowledge and optimistic rollups, bringing significant use cases not possible before to Ethereum. They are dedicated and experienced in what they do while being transparent with their plans for the future.
However, I also see potential problems, like conflicts of interest between users, validators, and investors, through giving investors a big chunk of the overall tokens. Other than that, the lack of experience in business could be a problem in general. Another thing that could potentially hurt Obscuro is privacy regulations, which will come, but we don’t know what they will look like. However, they are informed and well aware of them while also talking to their lawyers.
RESEARCHER OPINION #2
Andy | Chief Research Officer (Tech industry and non-VC perspective) on October 3, 2022
Obscuro has one of the most experienced teams I’ve seen on L2 projects. They leverage existing TEE technology that is already proven, which lowers the risk compared to other L2 projects. In addition, their privacy-oriented solution differs significantly from other L2s like Starkware, ZKSync, and Arbitrum. Privacy is an important feature to support the mass adoption of blockchain. Their technical approach is great, but they need to push the marketing to get more visibility in the developer community.
RESEARCHER OPINION #3
Michael | Research Analyst – (non-VC perspective) on October 3, 2022
Privacy is one of the major hurdles necessary to overcome for the mainstream institutional adoption of blockchain technology. While there are still unknowns about how it will be viewed by regulating bodies, transactional privacy needs to be addressed and will ultimately pave the way for institutional investors to begin directly participating in decentralized markets.
An essential part of their technology provides Trusted Execution Environments, which are proven solutions minimizing MEV, encrypting transactions at the most fundamental level, in essence cutting out any and all types of frontrunning on decentralized exchanges.
