What is Joint?
Joint refers to a collection of different components that work together to allow the Joint protocol to achieve its purpose. Before we go into a detailed explanation of Joint, it is essential to describe them clearly.
- Joint Team: This is the company within which the Joint protocol was developed. The company is responsible for researching, implementing, testing and deploying the Joint Protocol.
- The Joint Protocol: A collection of non-upgradable smart contracts that exist on an EVM-based blockchain and work together to facilitate peer-to-peer swaps between on-chain and off-chain assets (crypto ←→ local currency, e.g ETH ←→ USD).
- The Joint Dapp: A web interface and backend engine designed to allow users easy access and use of the Joint protocol. It is open source and can be deployed by anyone in the world to create an alternative access point.
- Joint Governance: A suite of contracts designed to distribute ownership and control to the Joint community. Joint governance is facilitated by the protocol’s P2P token.
- The DroidPD: The official NFT project and mascot of the Joint ecosystem. A collection of 10,000 unique characters designed to tell the Joint story of unmediated commerce.
The Joint protocol is a peer-to-peer system designed for exchanging cryptocurrencies (ERC20 Tokens) for local currencies (and vice versa) on Ethereum and other EVM-based blockchains. It is also capable of allowing exchange between any two on-chain assets. The Joint protocol is composed of a collection of non-upgradeable smart contracts that work together to enable a marketplace that prioritizes:
- Users do not need to reveal personal information (KYC-Free).
- Communication between users is also encrypted and not accessible to Joint Dapps.
- Users can trade between any assets without any restrictions.
- Users can trade unlimited volumes at any time.
- Users manage their funds and interact with the Joint protocol smart contracts directly from their wallets. There is no intermediary to hold funds or execute operations on users’ behalf.
- Transparency & Fairness:
- Users can see the full trade information on-chain.
- With the Joint protocol’s dispute system, users can start disputes and appeal unfavourable dispute rulings.
With Joint Protocol, anyone can use or build a marketplace that fundamentally protects users from censorship and risks associated with centralized marketplaces. Once deployed, Joint protocol will be instantly and perpetually available on the blockchain to everyone across the world.
How does Joint protocol compare to centralized P2P marketplaces?
To sufficiently explain the difference between Joint protocol and its centralized alternatives, it is important to clarify the layers that make up a typical centralized P2P marketplace; These layers greatly determine the platform's capabilities and end-user experiences.
The first layer in a centralized marketplace is the Jurisdiction layer. This is the region where the marketplace has selected to incorporate its business and subjects itself to the rules and regulations. The team will look at factors such as ease of doing business, market size, legal protection, financial service infrastructure and political stability to make their decision. Incorporating in the wrong place can be catastrophic to the marketplace's success.
Once the jurisdiction has been selected, the regulatory layer includes all the rules that will govern the operations of the centralized marketplace. This layer informs the features and utilities built into the application. Most times, the source of pain and violations to users can be traced to this layer. It involves the enforcement of rules created by multiple regulatory bodies. Some of the most important challenges users face include:
- Privacy violations:
- KYC requirement at registration time even when the user is not a citizen of the jurisdiction.
- Public revelation of customer base during a security breach or bankruptcy proceedings.
- Sharing of confidential information and transaction activities with third parties.
- User’s fund security
- As custodian platforms, centralized marketplaces have control of users’ funds; they can lock funds for arbitrary service violations or at the request of regulators and other third parties.
- The jurisdiction can also determine whether a user can access compensation when the exchange loses users’ funds via a software glitch, a hack, fraud or during a liquidation event.
- Trading limitations
- Regulatory requirements force centralized marketplaces to limit how much volume a user can trade before and after KYC completion.
- Oftentimes, users intend to exchange assets at very low volume (ex: $10, $50, $100) but are still subjected to KYC procedures that can take multiple days to complete.
- Additionally, user’s domiciled in neutral jurisdiction that intends to trade among themselves will still be subjected to the rules of the host jurisdiction.
Trade Engine Layer
The Trade Engine layer implements the business logic of the marketplace with careful adherence to the rules defined in the regulation layer. It is the engine of the platform. Responsible for registering and authenticating users, processing trade requests, handling KYC processing, payment settlement, and storing users’ communication logs and activities. Most user violations are conducted on this layer. Since only the marketplace team has access to this system and the codebase is closed it is very difficult to detect, prove and protest violations and irregularities before the damage is final.
The application layer includes applications in the form of web interfaces, mobile apps and API services used by end-users and developers. It is where the users go to start a trade, deposit funds, view their history and access features of the marketplace. The application layer is subject to the features made available by the Trade engine and other lower layers. On centralized marketplaces, it is tightly coupled to the Trade engine layer and leaves no room for third-party extension or integration.
The user layer describes the end-user who makes use of the marketplace to trade their cryptocurrencies and local currencies. If the regulatory model requires KYC, it will not be welcoming to users that need strict privacy protection. If the trade volume limit is too low, high-volume trades will seek an alternative etc. The type of users that make up this layer is largely determined by the decisions made in the lower layers.
The Joint Protocol
The Joint protocol takes a different approach through the decentralization of the layers that make up the protocol:
Joint Protocol begins with a decentralized governance layer. As the first layer, Governance determines the features, capabilities and core tenets of the protocol. At Joint Team, we are bootstrapping the Joint Protocol’s governance with an ideology that prioritizes censorship resistance and users’ privacy. We care about building a protocol that is permissionless and jurisdiction agnostic. We care about building a democratized protocol that can be extended or integrated by anyone. At maturity, Joint protocol will be completely governed by its users across the globe.
Trade Engine Layer
Joint Protocol’s trade engine layer is a collection of smart contracts deployed on the Ethereum blockchain. These contracts work together to provide all the trade creation, management and settlement needs of a peer-to-peer trading system. Unlike centralized trade engines, Joint protocol’s trade engine is permissionless, censorship-resistant and privacy-preserving. As an autonomous system that lives on the blockchain, It does not conform to regulations in any jurisdiction; this means it has no boundaries and can maximize user happiness and fulfilment. It is open source; anyone can inspect, use the codebase and propose upgrades.
Jurisdiction & Regulation Layers
Unlike centralized marketplaces, a Jurisdiction layer is optional. The Joint protocol does not have a jurisdiction; its only jurisdiction is the blockchain. As an autonomous application that lives on the blockchain, it cannot be incorporated in any place in the world. Without the constraint of jurisdiction, the Joint protocol does not include any artificial limitations designed to unnaturally restrict its use. At Joint Team, we believe regulation may be applied on the application layer per the region the application intends to serve. Users across the world and in different jurisdictions should not be required to adopt the rules from places they are not domiciled.
With a permissionless trade engine that lives on the blockchain, anyone can build applications that offer trading services to users across the globe and incorporate regulatory frameworks applicable to their target market. This layer will create a variety of interfaces and applications enabling competition and more choices for users. Joint Team will provide an official interface to allow users easily access and use the protocol.
The Joint protocol has been designed to enable integration and allow any team to build new interfaces and experiences. As a democratized protocol, applications can be designed to meet the specific needs of sections of users with little to no change in user experience. The protocol can also be integrated into existing and new decentralized applications to provide a new defi primitive for converting crypto-assets into cash. The Joint protocol user layer will span across many integrated applications and protocols.
The Joint protocol smart contracts enable permissionless, censorship-free, and privacy-preserving peer-to-peer trade. The Joint protocol’s mission is to create a new standard for unfettered cryptocurrency to cash exchange.