13h ago
My thoughts about the @RelayProtocol, one of the most used (and - IMO - bad) protocols for interop and why I think the Ethereum community should make a strong stance against such designs ⚠️⚠️⚠️ 🧵
First of all - why is it so popular? Simply because it's fast and cheap. It was created literally to optimize fees at the expense of transparency, decentralization, and security. It sits in a very bad spot in the design tradeoff matrix, completely against the crypto ethos.
There's no way for an independent observer to retrieve even basic on-chain data - one needs to rely on a trusted offchain API. Emitting events with useful information costs gas, being opaque is simply cheaper. That's really bad for transparency
The protocol is completely centralized and you need to trust the operator with your funds. Not only can the operator steal or seize your funds, but they openly admit in the documentation that they will do so if you breach some unspecified "global laws". They apparently do it for your own good
One of the more "interesting" features of the protocol is the ability to generate dynamically the "deposit addresses" - similarly to what CEXes do. They even admit that they may or may not work, as is the case with all trusted off-chain tech
They literally lie in your face in the documentation:
As opposed to equally centralised CEX-es they don't bother with any ToS, any contact info, they seem to be completely anonymous. From the PoV of any regulator they act as a centralised anonymous money transmitter and could be easily seen as an offchain mixer
Altogether if we were to rate it, it would score the rock-bottom on security and decentralization. And yet they are promoted by @lifiprotocol, @arbitrum amongst many others. Why? 😰😰😰
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