All you need to know about Haven1

What is Haven1?

Haven1 is a purpose-built, EVM-compatible and sustainable blockchain that provides a secure environment for financial transactions on-chain. It is a Layer 1 blockchain that is built as a complementary offering to Ethereum, designed to operate as a side chain that will transition into a rollup in the future as rollup technology matures.

What problems is Haven1 looking to solve?

In 2022 alone, more than $3.9 billion was stolen in crypto hacks and exploits, with the DeFi sector accounting for a staggering 80.5% of these losses, according to a recent report from Immunefi. This has led to a loss of faith in the security of blockchain technology, which has contributed to regulatory uncertainty and stifled the adoption of Web3.

Haven1 is designed to address these challenges, aiming to be the destination for secure on-chain transactions for retail, professional and institutional investors alike. Haven1 implements a provable identity framework, along with strict network-level security to minimize the risk of losses. 

What are Haven1’s key use cases?

Haven1's provable identity framework enables a number of exciting use cases, including: 

• Reputation-based on-chain lending underpinned by real-world credit scores, in a similar fashion to traditional loan risk management best practices. This allows undercollateralized forms of lending on a mass scale, such as traditional mortgage lending. 

• The integration of real-world assets for proof of ownership. For example, non-fungible tokens (NFTs) could be utilized as proof of property ownership.

• More efficient global exchange and settlement of tokenized digital representations of traditional assets, such as bonds and commodities. This has the potential to migrate the trillions of dollars currently exchanged through traditional financial markets on-chain.

What is the Haven1 (H1) token?

The Haven1 blockchain will be powered by its native token, H1, which serves three distinct purposes: network governance, gas fees and participation incentivization.

Governance 

H1 holders will have governance rights over the network’s three core protocols: a market maker, a money market (borrowing and lending), and a derivatives platform. Holders of H1 will have the right to vote on important decisions and proposals on the network, and help ensure it remains secure and trusted. 

Gas fees

Simple asset transfers between accounts won't incur any fees. However, more complex transactions, such as asset swaps, will. Users of Haven1 will require the H1 token to pay these fees.

Participation incentivization

Haven1 token holders will have the opportunity to receive rewards generated by the aforementioned protocol applications. This provides users a benefit to holding the token and aligns the interest of the token holders with the network.

What will happen to YLD?

YLD will exist independently of H1, and will no longer be swapped to H1. Ultimately, we decided to completely separate H1 and YLD tokens as Haven1 will be built as an independent project by an independent team.

YLD holders are part of what will make Haven1 a success, which is why we decided to adjust our plans so that our loyal community are rewarded. Now, they will continue to hold YLD tokens in coexistence with H1 - and earn locked H1 tokens as the ecosystem grows.

Our objective has always been to provide a versatile, user-friendly, and secure platform for our customers. As the DeFi ecosystem matures, we've identified a need for specialized platforms that cater to different financial needs. Ensuring that Haven1 and Yield App - and their respective tokens - remain separate, will allow us to cater to these distinct requirements more effectively.

How does Haven1’s provable identity framework function?

Haven1 is built using an environmentally-friendly Proof of Authority (PoA) consensus mechanism. PoA is a reputation-based mechanism that leverages the value of identity and reputation of block validators. Both Haven1’s validators and participants will be required to complete identity verification before using the network.

During the transaction validation process, Haven1’s network validators will be required to verify the user’s wallet address against the anonymized data stored on the blockchain. This checkpoint ensures that the user is not the subject of sanctions or other regulatory restrictions. 

If participants have not completed the required identity verifications, transactions will not be accepted by validators. If a user becomes the subject of regulatory restrictions, their ability to use the network will be restricted to withdrawal requests only.

What are the benefits of a provable identity framework?

The provable identity mechanism is designed to foster community trust in Haven1, ensuring all interactions on the network are secure and in line with a rapidly evolving regulatory landscape. This proposition is designed to meet the needs of retail, professional and institutional investors alike through adherence with strict compliance requirements.

Who is Haven1 for?

Haven1 is built for retail, professional and institutional investors who seek to access aninnovative world of digital asset and on-chain finance in a secure manner. 

What is the Haven1 association?

The Haven1 association is a neutral entity dedicated to driving the adoption and development of the Haven1 network. It will engage in outreach activities, provide grants to developers, and offer guidance and mentorship to support their success on Haven1. As one of the initial genesis validators on the Haven1 network, the Haven1 association will play a key role in the operation and security of the network.

How does Yield App fit in?

The Haven1 association has assigned Yield App as the network’s steward. The Haven1 blockchain is being incubated by Yield App Labs, the research & development arm of Yield App, and bootstrapped with the help of Yield App’s strong community of YLD token holders. 

As such, Yield App will play a key role in the development of the Haven1 ecosystem and support its growth along the way. Yield App's associational beliefs align with those of the Haven1 association, with a focus on security, diligence and protecting capital.

As Haven1's steward, Yield App fulfills the following responsibilities:

• Develop the Haven1 blockchain in line with regulatory requirements

• Organize the secure custody of assets

• Negotiate partnerships and drive business development

• Arrange identity verification solutions

• Establish trusted validator sets

How does Haven1 ensure security?

Decentralized protocols are often subject to hacks, scams, and other exploits that occur primarily due to a lack of operational diligence and standardization of security.

To ensure the security of protocols deployed on the Haven1 network, they must undergo a rigorous identity verification process that adheres to industry-leading security standards. In providing risk controls on a network level, Haven1 delivers an environment in which users can trust that their transactions are safe and secure.

How does Haven1 ensure regulatory compliance?

Haven1 utilizes a Proof of Authority (PoA) consensus mechanism in conjunction with network-level risk controls and guardrails to ensure regulatory compliance with Know Your Customer (KYC), Know Your Business (KYB), Counter Financing of Terrorism (CFT) and Anti-Money Laundering (AML) protections. 

How is sensitive user information handled on Haven1?

Haven1 recognizes the importance of user privacy in all financial transactions. For this reason, no sensitive data will ever be stored on the blockchain. Only the outcome of identity checks (verified or unverified) is recorded for security purposes. This is designed to foster trust that all operations on the network are secure and compliant with evolving regulatory guidelines.

What are the benefits of Haven1 for institutional investors?

The trustless, permissionless, and anonymous nature of DeFi makes it difficult for regulated institutions to use it in its current form. However, institutional interest in on-chain finance is growing. Haven1's identity framework enables institutional investors to engage in on-chain finance without the fear of hacks and exploits. This has the potential to attract billions in institutional capital to the Web3 ecosystem.

However, Haven1 is designed to fit the needs of retail, professional and institutional investors alike, and aims to foster the mass adoption of Web3. 

What is Proof of Authority (PoA)?

By utilizing consensus mechanisms, blockchains are able to confirm transactions and add them to the blockchain ledger. 

Proof of Authority (PoA) is a consensus mechanism that leverages the value of identities rather than relying solely on the staked value of digital assets (Proof of Stake) or the combined computational power of miners (Proof of Work). 

While a limited number of validating nodes make PoA more centralized, this mechanism is much more secure than other, more common consensus mechanisms. PoA is also a scalable, sustainable and energy-efficient model that can support the mainstream adoption of digital assets.

How are transactions validated on Haven1's PoA network?

During the transaction validation process, Haven1’s network validators will be required to verify the user’s wallet address against the anonymized data stored on the blockchain. This checkpoint ensures that the user is not the subject of sanctions or other regulatory restrictions. 

If participants have not completed the required identity verifications, transactions will not be accepted by validators. If a user becomes the subject or regulatory restrictions, their ability to use the network will be restricted to withdrawal requests only.

Who are the initial validators on Haven1?

As the network steward of the Haven1 association, Yield App's responsibilities include establishing a trusted set of validators. All validators will undergo a rigorous screening process to ensure they are trusted and reputable. One of the initial genesis validators will be the Haven1 association itself.

How is the transparency and performance of validators ensured on Haven1?

All validators on Haven1 will undergo a rigorous screening process to evaluate their reputation and trustworthiness. Validators must be well-established entities with a reliable record of integrity and must comply with regulatory guardrails.

Furthermore, all validators will be publicly verifiable. As such, anyone can check their identity and track their performance. This process helps remove the risk of malicious behavior on the network, while also confirming that all validators are devoted to safeguarding the network's security and reliability.

How does Haven1 ensure the safe storage of assets and mitigate the risks of automated bridging solutions?

Haven1 employs a combination of cryptographic attestation of the custody of digital assets and corresponding audits of user liabilities to ensure the security of assets on the network. This method enables users to utilize existing assets from various alternative blockchains.

Haven1 partners with established, reputable entities to ensure that every asset on Haven1 is backed 1:1 by the relative underlying asset and redeemable at all times. This allows users to securely and transparently store their assets on Haven1 in cold storage, providing an additional layer of protection against hacks and other exploits.

Further security enhancements, such as 24-48 hour withdrawal waiting periods, introduce additional safeguards by providing a challenge window for network validators to identify malicious behaviors.

Is Haven1 a competitor to Ethereum?

Haven1 is designed to work in conjunction with the Ethereum network as a side chain. As rollup technology matures, Haven1 intends to transition into a rollup, utilizing Ethereum as the settlement layer.