Topic: Using Nostr to facilitate a Mobile friendly Bitcoin/Fiat Decentralized Exchange (Read 209 times)

After a year of work, I want to give some updates to this project.

I have written the first working version of the n3xB protocol library, along with a fun demo implementation (OceanSea app / Fatcrab trade engine). Looking for feedback, and eventually the special people/teams that will build the 'Damus' to n3xB. Someday becoming the challenger to the Binances of the world, like how Nostr is growing to be a viable challenger to Twitter, etc.

The demo implementation of how a Bitcoin exchange client can be built on top of the n3xB protocol & the nostr network - overview, video demo, macOS binary, 'web banking' for this fictional 'Fatcrab' fiat replacement for testing purposes, along with good-ole Github links can be found at https://n3xb.io/fatcrab.html

https://n3xb.io/img/FatcrabShare1200x627.jpg

We can throw a bunch of crypto-wizardry buzzwords to the wall, but it doesn't change the fact that fiat rail settlement are always going to be in-atomic against Bitcoin. There's no way to do so without introducing a fully trusted custodian in the middle.

My observed issues with alot of Decentralized exchanges is the manner they carry out their p2p transactions which can be quite slow, heavy and costly. A decentralized exchange can function like cex if developers can find a way of locking users funds in some sort of multisig or smart-contract. Users can then trade between each other or with the exchanges (who could aswell act as providers of multiple currencies) with something that represents the locked currencies (sort of uids like the CEXs do) free of charge.  Traders currencies can be unlocked after trading, with exchange fees and gains/loses deducted or added to their final balances. And then they can move their final balance to their addresses

This should work on simple or mobile-friendly platform. And the platform should be immutable, censorship resistant, permissionless/trustless, transparent  and somewhat decentralized.

With Silvergate and Signature Bank taken out, banking rails for Bitcoin / Fiat on-off ramp is going to get a lot worse. This is likely a calculated attack by the system as part of Operation Chokepoint 2.0. We need a censorship resistant on/off ramp more than ever.

I have also created a small landing site to make the project more digestible than just a Github page.

https://n3xb.io

Giving this another bump to seek more feedback and help. Thanks!

My proposal is just a protocol. Any trade mechanics can be communicated through the protocol. Can be on-chain, can be LN can be fiat, can even be mailing a check, etc. The key is the protocol being open - anyone can build their project on top and tap from / contribute to the liquidity in the network. Unlike the way it is currently now, Robosat has their order book, and Bisq has their's (albeit distributed P2P), and then Paxful has their's, etc. They are all siloed. Why can't we build one giant orderbook together, but stored in a federated redundant and censorship resistant manner across many relays, just like (in fact through) Nostr?

Not to mention both Paxful and Robosat is really a single web server. Just because its Tor doesn't mean much. Silk road was behind Tor and got nuked. Not a good idea for the dev to also be the sole node (Robosat web server) runner and also the dispute resolution entity in one... N3XB makes it so anyone can be in any distinct roles, and probably get paid to do these roles.

Please do. I created a brand new anon identity for this project and has been difficult to draw attention to the proposal. Last thing I want to do is to spend the next 6 months building something that's not well thought through, not well scrutinized, and the community at large doesn't find it useful. Thanks!

No, CBDC is a scam and nobody should accept that slave fake coupon-like money!
Just research what shitshow they created in Nigeria with eNaira, and it would be 1000 times worse in any western countries.

Yes I am familiar with Robosat that uses Lightning Network, but what's the difference and advantage between your proposal compared to using Robosats?
Can mainnet Bitcoin be used with your proposal or it's only LN Bitcoin?

Ok, I understand now.
I am not an expert or developer, but I will take a look and try to spread the word about this.
We certainly need more real DEX options for trading BTC, that are easy to use and can work on all devices, including mobile phones.

None of the Bitcoin or the fiat exchanged are touched by a trusted third party and is transferred P2P. This is no different than Bisq or Robosat. In Bisq's case a trusted 3rd party doesn't come into the picture at all, not even as a bond holder, unless the two traders cannot get the transaction done in a 4 days period (aka, there's dispute between whether either side have fulfilled their Bitcoin or fiat obligation in the trade). The multi-sig can be structured in a mutually assured destructive way so that all bonds are loss if the two traders does not come into agreement whether both parties have completed their part in the trad. In this scheme no 3rd party is involved at all.

I'd say this is a non-custodial, trust minimized way to trade and have had extremely low trade dispute rate, and no trade failures thus far in either Bisq and Robosat.

The real problem of Bisq and Robosat is UX and liquidity. N3XB aims to improve on both these issues, and more.

Fiat is still transferred out of band. So is Bitcoin tho however. If you are familiar with Robosat, the platform doesn't really touch the payment, it just relays information between the Maker and Taker. What protects the trade is a fidelity bond either implemented through a multi-sig (no 3rd party unless dispute arises/trade times-out), or through a trusted intermediary. Both schemes are explained in my Github. These schemes aren't new, they are used in both Bisq and Robosat currently. My proposal merely makes all this an open protocol that can be routed in a federated redundant manner.

Its meant to be an open protocol that anyone can implement. Just like Nostr, someone made the Damus iOS client. And then someone else made the Amerthyst Android client, amongst many other web clients. I am better at iOS myself, so I think I'll probably start there. Might consider writing a core library of sort in Kotlin or Go or Rust so it can make implementing on a separate platform easier down the road, but it will slow down iOS development itself.

For now I just want to get some feedback on architecture, whether there's even a demand for the end product and if its sufficiently differentiated from Bisq / Robosat as it is, etc.

I don't think it's a difficult problem to solve with a trusted solution.  The question is how do you do it without a trusted intermediary?  That's always been the issue with Bitcoin in my opinion.  Services like localbitcoins worked great in the past (before it started being used to arrest people for I still don't know what) but relied on an intermediary to be trusted to act as escrow.  It's a problem that I'm not sure how it could be solved in a trustless way.  Sadly, I think a CBDC would probably be helpful for situations like this.  As is, you'd seemingly need some sort of USD stable coin in order to do a trade like this without trusting a 3rd party.

I was hoping something would change after Bisq 2.0 get released, but your post crush my last hope.
Only way would be using some remote software to control Bisq that ins installed on your computer, but that is not the same thing.

It's interesting idea and Nostr could be used since for this purpose especially after recent popularity in public, but I don't understand how you would exchange fiat currencies with Bitcoin.

Can this work on Android devices or only for iOS devices?

I have been thinking about for a while, how we can have something like Bisq, but on mobile. The P2P nature of Bisq makes it really difficult to run in a mobile environment. I have engaged with the Bisq 2 team and there's little to nothing that would improve this situation any time soon. This is especially relevant as no KYC exchanges like LocalBitcoins, etc have been getting shutdown or getting KYC regime imposed on them one after the other. While most users really just go to CEX as the UX is just so much superior.

On the other hand, Nostr have been developing extremely rapidly the past 6 months, and recently the Damus iOS client have increased the adoption of Nostr drastically. I was thinking if a similar architecture can be used for a Bitcoin/Fiat DEX. In fact, what if we pipe DEX orders and trade information directly through existing Nostr relays? Potentially creating plausible deniability for node runners that they are facilitating any sort of trades whatsoever?

I haven't got everything figured out yet, especially on how to strengthen plausible deniability on the part of Nostr relay runners. But I did write an initial proposal on Github. Would love to get some feedback before I actually try to build an iOS client that actually implements the protocol proposed! Thanks!

https://github.com/nobu-maeda/n3xb

Follow me also on Twitter & Nostr!
Twitter: https://twitter.com/NobuMaeda
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