The concept of a “trustless” system suggests an application functioning flawlessly without requiring user faith. The aim is for consistent accuracy and fairness, preventing any user exploitation. This design removes the need to trust any single person or organization.
These trustless models provide an alternative to today’s typical centralized applications, which rely heavily on trust. Consider your mobile banking application. You likely trust the bank to safeguard your money.
Web3 platforms, by their nature, lack this centralized control. This is why they need to be fundamentally trustless. However, achieving true trustlessness remains a challenge.
Blockchain’s Trust Factor
Ideally, code dictates the rules in trustless systems. Smart contracts should automatically execute transactions when specific criteria are met, using predefined rules to avoid manipulation. While often effective, this is not always the case. Because human developers create the code, vulnerabilities and bugs can exist. Crypto history is rife with multi-million dollar exploits because of this.
The “oracle problem” presents another obstacle. Oracles provide real-world information like weather, stock values, and sports results, but this needs human involvement. Users need to rely on these oracles’ accuracy. Data validation mechanisms are vital. Compromised data can undermine the perceived trustlessness of the blockchains using it. So, even decentralized networks often rely on the integrity of external systems.
Trust can also be influenced by association. A blockchain project linked to a well-known figure, like a high-profile developer, may gain immediate credibility. This connection can sway others’ perceptions. For example, many might assume a project with Vitalik Buterin involved couldn’t be a scam simply due to his participation.
Furthermore, certain digital assets require implicit trust. “Wrapped Bitcoin” (wBTC), a cryptocurrency on the Ethereum blockchain linked to Bitcoin’s value, is a prime example. For each wBTC created, one BTC is supposed to be held as collateral. However, a company called BitGo holds the actual BTC, acting as custodian. Thus, anyone using wBTC inherently trusts BitGo.
This reliance on human involvement means blockchain technology isn’t genuinely trustless. This introduces vulnerabilities like the potential for re-centralization. Developers updating smart contract code or those running popular oracles could act maliciously or negatively influence a network, harming users.
The need for trust also casts doubt on blockchain’s claims of total transparency. While transactions are publicly viewable and verifiable on the ledger, the motives and actions of humans coding, operating oracles, or managing funds are not.
Layer-3 Solutions Strengthening Digital Trust
The imperfections in blockchain’s trustlessness are acknowledged, driving Layer-3 networks, like Orbs, to create more robust systems that reduce human oversight.
Orbs is building a decentralized execution layer on top of Layer-1 and Layer-2 blockchains, enhancing their capabilities and performance. This layer aims to improve trustlessness. It leverages an independent network of decentralized “Guardians” incentivized to maintain integrity, with financial penalties for misconduct. These nodes handle intricate calculations and interact with smart contracts across multiple blockchains, enabling Orbs to function as a secure, verifiable off-chain logic layer. Using Orbs, dApps can achieve advanced functions beyond direct L1/L2 network capabilities.
Critically, Orbs’ infrastructure helps reduce reliance on human intervention. Its permissionless and verifiable execution environment automates and secures sophisticated processes, minimizing the need for trusted intermediaries and increasing blockchain and dApp trustlessness.
Orbs also enables a reputation system on its L3 network. This lets blockchain users create decentralized identities (DIDs) proving their age, name, and qualifications without revealing the information. These DIDs can be used across any blockchain integrated with Orbs, improving interoperability and enhancing trust within Web3.
Orbs’ efforts to integrate trust into the infrastructure layer are supported by many initiatives aiming to minimize human control and intermediaries.
For example, Humanity Protocol offers a Proof-of-Humanity consensus mechanism. This confirms blockchain users are real people, preventing bot usage or multiple accounts. The tool enhances blockchain governance, especially in DAOs attempting to increase fairness with advanced voting systems that minimize token weighting. This method shifts trust from human oversight to verifiable cryptographic proofs, guaranteeing that no one can gain more power over a protocol by creating multiple wallets.
Meanwhile, Zeus is targeting custodians with zBTC, an alternative to wBTC on the Solana blockchain. Instead of sending funds to a custodian for asset minting, Zeus employs a permissionless design. Here, a network of validators, or “guardians”, securely holds BTC. The Zeus Program Library bridges funds from Bitcoin to Solana, minting one zBTC token for each BTC deposited.
When a user sends BTC to the Zeus Program Library, the funds are stored securely in a smart contract managed by the guardians. An equivalent amount of zBTC is then sent to the user’s wallet. The guardians jointly control the smart contracts; no single guardian can unlock them without universal approval. This safeguards the process: BTC can only be unlocked when the associated zBTC is returned to the Zeus Program Library and burned.
Progress Towards Greater Trustworthiness
Projects such as Orbs, Humanity Protocol, and Zeus are working to build more reliable and foolproof digital ecosystems needing less human input. This is vital, since blockchain systems will always have an element of trust as long as human intervention is needed to uphold or correct them. By reducing the need for trust, we can increase decentralization, which in turn creates greater fairness and transparency.
While completely removing the need for trust might not be possible, ongoing innovation is minimizing reliance on humans, ensuring no single entity has enough influence to unfairly manipulate these systems.