Asking Important Questions About Asset Security on Xodus
Digital assets holders are technically responsible for safeguarding their assets from scams and hacks. In addition, there is a wide range of security options with different levels of security provided for holders to better ensure the integrity of their assets.
As said earlier, crypto assets holders are tasked with the responsibility of being cautious of obvious scams and hacks targeting their assets just as they would take all measures to secure their traditional real-world assets.
Talking about traditional assets, it is equally important they are safeguarded as well. We have seen individuals, families, and organizations collect assets and valuables over time. However, not everybody takes the needed precautions and sometimes uses the riskiest and lowest forms of security for their traditional assets. This carelessness sometimes leads the asset and its owner to become a target.
The Importance of Security to Digital Assets
For digital assets, the “private key” is the vital cog to protecting your treasure box.
The private key is a unique long password that functions similarly as a bank-card PIN, purpose-intended to unlock access to a user’s crypto wallet. It is critical not to lose or forget these unique keys as digital assets are not guaranteed with a password reset function, unlike what you have in centralized financial institutions. Once a key is lost without being backed up, it is lost forever.
It is reported that about 20% of Bitcoin may have been lost due to lost private keys.
To ensure the safety of your private key, you can either store it online or on mobile wallets called hot wallets. Alternatively, it can also be stored on hardware known as cold wallets. Unlike hot wallets, a cold wallet is not connected to the internet. It is technically impossible for hackers to hack this type of storage without the assigned codes or passwords.
Examples of cold wallet options without intermediaries include physical USB keys, specific offline computers, or sophisticated hardware wallets. Typically, small USB-like devices with impenetrable security designs protect users from hackers. They cost about several hundred dollars too.
Big crypto exchanges often tend to offer cold storage custody options to users while specialist third-party providers even go to greater lengths to protect users’ private keys by storing them in vaults secured by guards.
The Importance of Security to Real-World Assets
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Real-world asset owners often make use of personalized storage facilities for their prized and personal possessions like fur storage, car storage for collectible vehicles, and even safe deposit boxes for rare gems or family inheritance. The purpose of doing this is to protect their valuable assets from damages, loss, or theft.
To properly secure such valuable assets, owners sometimes utilize waterproof and fireproof safes to store important documentation of their real-world luxury assets. Such documentation can include ownership proof, birth certificates, social security cards, stocks, bonds, and insurance documents.
By utilizing waterproof and fireproof safes, assets are not only protected from thieves but also natural hazards like fire, rain, and wind damage.
How Does Xodus Plan to Secure Your Real-World and Digital Assets
Tangible real-world assets have a value attached to them already, which is why they are mostly seen as safer investment vehicles. Art, real estate, and luxury watches are among some of these options. These items could go for anything between $500k and hundreds of millions. A look at this price range and you will understand why it is only within the reach of the wealthy 1%. So, just a small group of people stands to benefit from the increase in value of these assets. As part of Xodus’ vision of including material assets in its portfolio, watches, art, fine wine, and precious metals are some of the luxury real-world assets that Xodus will be considering.
At Xodus, we have identified a way to level the playing field. This effectively allows any user to stake XOD tokens as a means of benefiting from the high-end appreciation of these real-world assets. The best news is that they don’t have to invest large funds to gain from these benefits.
Now that Xodus has identified a way to level the playing field, here is how it plans to secure these assets.
Securing Real-World Assets Through Carefully Vetted Partnership
Technically, Xodus does not and will never hold your real-world assets within facilities or vaults controlled by the protocol. Instead, the onus falls on a carefully vetted third party.
The chosen third party will be responsible for the accounting and auditing of the real-world asset of choice. One of the respectable providers that Xodus aims to collaborate with is Paxos Gold, a provider of gold-backed asset offerings in the industry.
Paxos Gold is not the only one, we also have other new providers coming on-chain or in the developmental stage. As they come online, Xodus is positioning itself to capture the new market as one of the DAO leaders successfully and seriously making use of these providers. This new market is something the Xodus protocol has great belief in.
So, Xodus will be there to capitalize as more of these providers come alive and prove themselves, of which they must also pass through the vetting process satisfactorily. The community will have a say on the matter of course through voting.
The Vetting Process
Several blockchain projects are making moves to introduce real-world products to the blockchain world. At Xodus, one of the primary projects that we aim to bring to life is real-world assets verification through serial codes. What the project does is mint an NFT that represents the tangible asset value for real-world assets. So, having the NFT linked directly to the asset valuations gives room for gaining from the asset appreciation value.
Before any partnership with certain real-world asset platforms is announced, the Xodus protocol carries out due diligence that is extensive. There is an in-house team of experts on a smart contract that analyzes contracts to ensure the protocol’s security as well as the products and that of the stakers.
Securing Digital Assets Through Astute Treasury Management
For digital assets, they are held within the protocol’s treasury to be overseen by treasury managers who are tasked with the main purpose of helping the protocol increase in value. This means a gradual increase in APY until stability is achieved creating a positive effect on the inflow of the treasury resulting from appreciation of the digital assets.
There is a strict requirement for selecting treasury managers, which includes knowledge and proven experience. The moment managers are shortlisted, the community members vote upon the list. They are the ones to decide on every appointment of the treasury manager.
The jobs of the treasury managers include small daily management decisions. Any large request to a part of the treasury is put to vote through proposals after they have listed the pros and cons of the decision.
The number of treasury managers in every investment segment is expected to increase as the Xodus protocol grows in assets and numbers. The additions are necessary for the benefit of the community and the protocol at large.
Conclusion
With Xodus, even though it does take control of your assets directly for obvious security reasons, the protocol ensures that your real-world assets are safe in the hands of industry experts who know their onions when it comes to asset security.
In addition, your digital assets are safely tucked away in the Xodus treasury that is overseen by a community-approved group of individuals that have satisfied community requirements to be tasked with such an important task.
