Creating assets that are favorable for consumer protection rights
PROBLEM: Consumer Protection Before this gets out of control $60M or so from this wallet drainer scam - probably more at this writing Threads Web3 is Going Just Great (@web3isgoinggreat) on Threads New wallet drainer steals almost $60 million in 9 months December 21, 2023 https://web3isgoinggreat.com/?id=ms-drainer Federal Law provides consumers with protections from fraud or unauthorized electronic payments • Electronic Fund Transfer Act (15 USC §1693) • Regulation E of Federal Reserve Board (12 C.F.R. Part 205) https://www.fdic.gov/news/events/2010_fraud/fox.pdf I’m very aware of the whole “code is law” crypto psychology but some hard core cypher punks even reversed their stance when the 1st DAO hack happened on Ethereum. These issues only seem to matter when it’s the individuals funds effected by a breach - and yes, phishing attacks are a breach. SOLUTION: Stellar has a feature called clawback that allows an asset issuer to burn a specific amount of a clawback-enabled asset from a trustline or claimable balance, effectively destroying it and removing it from a recipient’s balance. ( Clawbacks | Stellar Documentation…
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This is actually a good idea for certain tokens and users that would like to use blockchain in a more secure and protected way. I don’t believe all tokens need to have this functionality but this is a use case that would definitely be of value on the long run to bring more retail risk-averse users to the scene and the Cosmos.
We have also seen that without this functionality that funds can as well be clawed back through hard forks and proposals in controversial ways suck as Prop #16 on Juno (which I heavily disagree with) so it would definitely be better to have two types of tokens, one of them where code is law and definite, and the other where such functionalities can be introduced, both have their pros and cons and their user base.
Georges_Chouchani:This is actually a good idea for certain tokens and users that would like to use blockchain in a more secure and protected way.
My whole thinking was LSD’s - Liquid Stake Derivatives, could be issued that provide higher degrees of protection against fraud.
Georges_Chouchani:I don’t believe all tokens need to have this functionality
I agree with this, but to be in compliance with some regulatory policies - I also think it will be required to be a serious consideration for this market segments growth.