Inventor of Ethereum’s ERC-20 Token Standard Plans New Blockchain ‘LUXO’ for Creative Types
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Fabian Vogelsteller, an Ethereum veteran who helped shape the ecosystem in its early days, is taking on a new venture — a blockchain to succeed where he says others have failed, for creative, fashion-minded and art-world types.
One of the 39-year-old, self-taught German programmer’s most important contributions to Ethereum was the invention of ERC-20, the blueprint for creating tokens compatible with the blockchain. This innovation led to the infamous initial coin offering boom of 2017-2018. Several of the largest tokens by market capitalization are based on the standard, including Uniswap’s UNI, Shiba Inu’s SHIB, and Arbitrum’s new ARB.
Vogelsteller is now turning his attention to a new project, LUKSO, a soon-to-launch Layer 1 blockchain that he says is designed for the “creative economy.” It would compete with Ethereum itself, the by far dominant smart contract blockchain with a market cap of $217 billion.
The explosion in NFTs for everything from collectibles to art and music, along with a plethora of imagined metaverses, is a good reflection of the potential for creative applications on the blockchain, according to Vogelsteller. But he says the systems are nowhere near maturity and not easy enough to use.
“One of the benefits of starting a new network was thinking about how we can improve the fundamental direction of the blockchain,” Vogelsteller told CoinDesk.
LUKSO will have an opportunity for validators to join the network. There will be a Genesis Validator Deposit Smart Contract on the Ethereum blockchain, which will go live in a few weeks.
Just as Ethereum was born out of Bitcoin, LUKSO will be born out of Ethereum, Vogelsteller told CoinDesk: “We’re using Ethereum as an on-ramp in a way, like Ethereum used the Bitcoin network.”
On LUKSO, the Genesis Validator Deposit Smart Contract will allow users to deposit LYXe, an ERC-20 token that went live in a reversible ICO round in June 2020, to become a genesis validator. (Once the mainnet goes live, LYXe will be converted to LYX, the original token for LUKSO.)
Each validator on the LUKSO blockchain must unlock 32 LYXe in order to participate in the block validation process – similar to the 32 ETH required to be “staked” on Ethereum to participate as a validator.
Self-taught codes
According to Vogelsteller, what prevents Ethereum from being adopted on a mass scale is that the applications do not make the user experience easy. It is difficult for the average person to understand which address belongs to which wallet, and it takes effort to follow the movement of transactions in the chain. To address this, LUKSO will introduce a comprehensive all-in-one profile that brings chain activity under a single entity, known as a “universal profile.”
Vogelsteller was born in the small German town of Unterwirbach in Bavaria where he says he never quite fit in. He moved to another small town in southwest Germany where he finished his studies at Schmalkalden. He studied media design at the Bauhaus University in Weimar.
“I never studied computer science or anything technical. “Everything I know I learned from myself coding websites since I was 14,” Vogelsteller said.
In 2013, Vogelsteller first learned about blockchains. He also happened to meet the original Ethereum team a day before their presale. Six months later, Vogesteller began working for the Ethereum Foundation in Berlin, where he built the first Web3 browser, the first Ethereum wallet, and other developer tools.
During his time at the Ethereum Foundation, Vogelsteller, along with Vitalik Buterin, co-founded the Ethereum blockchain, pioneering ERC-20, which created a set of rules that tokens on the Ethereum blockchain must adhere to, making it easier for developers to know how a new ERC-20 token will behave.
Buterin had originally proposed an initial token standard in 2015, but Vogelsteller looked at the proposal, changed a few things, and proposed ERC-20 to the Ethereum community to start a conversation. It was adopted in September 2017 and remains the de facto standard for fungible tokens on Ethereum.
Vogelsteller also first introduced the concept of a blockchain-based identity on Ethereum in 2017, known as ERC-725. It gave protocols the ability to create decentralized identity standards on Ethereum. While the Ethereum standard didn’t take off like ERC-20 did, projects like Origin Protocol implemented the standard.
Leaving Ethereum
In 2018, Vogelsteller left the Ethereum Foundation to focus on LUKSO and improving the standards he proposed during his time with the Ethereum blockchain.
Now, Vogelsteller has taken inspiration from the decentralized blockchain identity standard he created for Ethereum, but has turned it into a series of LUKSO Standard Proposals, or LSPs, and the blockchain account at the heart of the ecosystem known as LSP0.
LSP0, which turns ERC-725 into a smart contract-based profile, tackles the functionality and makes profiles more user-friendly on the blockchain. It combines a crypto wallet, similar to an Ethereum account, with smart contract storage. In addition to having a regular crypto account associated with these profiles, users can link any public information they want, such as their Twitter account or non-fungible tokens.
On LUKSO, users, organizations and teams can create any profile they want to identify themselves as in Web3; the profile will also act as their blockchain account, making the user experience more seamless.
Much more than a wallet
On Ethereum, if you have a regular account, known as an “externally owned account”, it is impossible to add information such as the user’s name, age or other information to the public key address, meaning that aspects of identity cannot be integrated into the protocol layer.
And while crypto users often like to use aliases or remain anonymous, there is a lack of easy ways to identify what a user presents themselves online with their on-chain activity. Vogelsteller believes that universal profiles solve this.
“It may be a wallet, but it’s much more than that,” Vogelsteller told CoinDesk. “It’s a whole profile. It has a name. It has a picture. It can be managed by multiple devices, by multiple keys, with different permission levels.”
The universal profiles also get “key managers”, which can allow users to add more keys to their chain that are assigned or perform different actions. The key manager checks which key can do what on the universal profile and can restrict specific activities on individual devices. Additionally, having these multiple keys enables a sort of backup system in case a user loses access to a key.
There may be benefits for decentralized autonomous organisations, online shops, services or anti-money laundering and know-your-customer processes required by government; organizations are able to store, use and cross-check the public information into a universal profile.
The idea with LUKSO is to become an entire ecosystem for creatives. Vogelsteller said that LUKSO is “building an entire toolset and ecosystem and marketplace around NFTs using Universal Profile at the base,” making it easier to identify advertisements and their profiles, and their work on the blockchain.
While the hype these days seems to be around “layer 2” scaling tools for Ethereum, Vogesteller argues that LUKSO needed to be its own network.
New token standards
He argues that the network capacity of these popular layer 2s and Ethereum is full. “The mainnet is full, and it’s expensive,” he said.
LUKSO is not the first blockchain to work on identity issues. Ethereum scaling project Polygon recently came out with Polygon ID, which uses zero-knowledge technology that allows users to verify their identity without revealing sensitive information. Other protocols such as the Ethereum Name Service exist to help link domain names to users’ wallet addresses, making crypto addresses more identifiable.
“When you put your profile on the blockchain, everything you do now with your profile literally happens on the blockchain. So there’s a lot more things you can do now,” Vogelsteller said.
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