Emblem Vault: Litepaper 2.1 (Unofficial)

Work in progress to (hopefully) be published in the upcoming upgrades.

Emblem Vault — Circuits of Value ($COVAL)

Introduction

Emblem Vault is an Non-Fungible Token that can exist in any enabled blockchain and contain various crypto wallets inside. An Emblem Vault allows anyone to create a “right to ownership of wallets” that include any number of token types. It can contain Bitcoin assets and Ethereum Virtual Machine (EVM) assets; the company plans to support every blockchain within reason.

Assets locked inside an Emblem Vault NFT can be traded without any need to wrap.

Case study 1

One collector has hundreds of art NFT’s they purchased on Ethereum via Opensea. Another user has Counterparty NFTs they have collected. Both can create vaults on Matic/Polygon sidechain for very low cost, send their native NFTs into the vaults they have created. Those users can go to a marketplace on Matic and sell their NFTs inexpensively, or they could use the Emblem Vault NFT2NFT function and directly trade one NFT for the other. Both users save Ethereum’s exceedingly high gas fees and have considerably lower costs to trade NFTs.

Emblem Vault is an NFT minted using the Circuits of Value token ($COVAL). COVAL is designed to be a transient token, able to “jump” between different blockchains. The ability to move from blockchain to blockchain enables COVAL to be used as the payment mechanism to make NFTs on any blockchain. Since it is expected that the price of $COVAL will fluctuate over time, therefore constantly changing the cost to mint an Emblem Vault, the tokenomics will introduce a two-token system to peg the cost of creation at $3. The second token, $FUEL, will be deployed to incentivize holders to stake COVAL and FUEL to provide sufficient liquidity across all blockchains on which Emblem Vault is deployed. FUEL shall be dynamically pegged to $1, and it will be rebased through COVAL-buy and COVAL-burn mechanisms.

Emblem Vault blurs the line between blockchain networks

The concept was designed to help the interoperability issue. Blockchains operate in a similar way as the early days’ internet, with many different types of services in many different networks. Blockchains need to work cohesively. Circuits of Value was specifically designed to solve this in 2016. The internet of money must be a single network of networks rather than a bunch of competing blockchains.

Emblem Vault is a Non-Fungible Token (NFT). Therefore, each Emblem Vault that is created is unique and can assign sole ownership to digital assets. COVAL’s Emblem Vault is a unique, one-of-a-kind Utility NFT platform. The strongest of use cases involve the direct swapping of Emblem Vaults to trade native assets cross-blockchain.

How it works and the case for privacy

The Emblem Vault tokenizes the ownership of crypto wallets/addresses. Usually, when a wallet is created, the user is given a private key derived from a seed phrase — therefore, the user could never transfer ownership of the wallet/address trustlessly. However, when an Emblem Vault is created, the private key is never revealed to the user. Instead, it is sharded, encrypted, and will be stored using Torus Key Infrastructure. Torus Key Infrastructure is a decentralized non-custodial PKI infrastructure that is maintained by users themselves and large stakeholders in the blockchain ecosystem. Keys (or user accounts) are managed by multiple authentication factors, threshold of which gives access to the account.

• No central server, its decentralized
• Open-source
• Non-custodial PKI designed to leverage on existing authentication systems

The Emblem Vault represents the “right to claim the private keys” and it is tradeable, along with everything else “within” the Emblem Vault. Emblem Vaults become a “container” that can store any combination of digital assets — including an infinite amount and types of cryptocurrencies, other NFTs, and digital files such as PDFs. A Tor.us and IPFS completely decentralizes the application. It becomes a sort of digital envelope or shipping box. It can be “mailed” (i.e., transferred) in a simple and transparent way and used as the market desires. Like a posted envelope, it does not require a specific framework to receive it; it can be deposited in any supported mailbox. In the same way, an Emblem Vault can be “received” by any other EVM blockchain. Interoperability brought into the digital world is enabled by Circuits of Value.

Case study 2

User 1 has Bitcoins (BTC) but wants ETH

User 2 has ETH but wants bitcoins

User 1 places Bitcoins in a vault

User 2 places ETH in a vault

Both users than “swap” their vaults, claim them and extract their contents. The users have performed a BTC ETH swap.

So how can the swap described in Case Study 2 happen? Interoperability via ownership transfer.

Claiming ownership is as simple a transaction. It stops Transfer methods for the NFT and returns the decryption key needed to decrypt the private keys contained within the vault to the final owner. The keys can be imported into a wallet (or wallets) of the user’s choice.

It is also possible to transfer vaults in a confidential way. Some users may not want the contents of the vault to be publicly viewable. A user can create a vault, designate it as “private”, load the vault with assets, and transfer it to another party. The user will then provide the receiving party with a password that will enable them to see the content of the vault. Nobody else can see the content unless they have a password. Any token wrapped in a vault can become a private token since a third party cannot find which blockchain addresses are having their “rights-to-ownership” transferred.

Ease of use

Case study 3

Counterparty A is an interested party in an acquisition. They need to pay a deposit to have access to the books of Counterparty B for their due diligence. At this stage of the proceedings, all expressions of interest are confidential. Counterparty B will refund the deposit if the due diligence reveals any irregularity. In other words, Counterparty B does not have immediate access to the funds.

Counterparty A decides to tokenize bitcoins for the deposit amount, and they will put the token in an Emblem Vault.

Counterparty A marks the vault as private and transfers it to Counterparty B

Counterparty B receives the vault, but they do not have access to it until they receive the password.

Counterparty A does their due diligence; there are no irregularities. They send the password to Counterparty B.

Counterparty B receives the password and can access the content of the vault.

An Entire wallet inside a token

Emblem has made it easy for musicians, digital art creators, or anyone to collect or sell their creations as NFT’s through Emblem Vaults since September 2020. The Emblem Vault allows artists to create true value-backed art. These digital containers can easily be created and transferred; groups of assets can easily be sold. It is also possible to create multiple assets in a single token containing one or more pieces of Collectible Art — selling entire collections or galleries.

Selling digital art is only one of the possible use of an Emblem Vault. Emblem Vault will make it easy to split and combine vaults into aggregates of their values; since Emblem Vaults are NFTs, Emblem Vaults can store any combination of other Emblem Vaults (rights-to-the-rights-to-the-rights-of-ownership and so on). In the future, it may also become possible to claim only part of the value inside the vault since each private key generated may also be derived from different seed phrases. The Emblem Vault can be used to store to combine multiple assets in a single token that can be traded as a portfolio, but through multi-vault embedding, the assets can also be sold separately. For instance, a vault can contain 40% BTC, 20% ETH, 10% LINK, and 10%AMPL; the buyer can then transfer the BTC onto another vault, combining it with other holdings. It may then become possible to trade part of the digital portfolio and add to it — such as the unclaimed ETH/EVM portion. You can also use vaults to create multiple pools tokens to make transferable liquidity pools.

A vault can also be used for the transparent management of funds. One core feature of blockchain technology is the transparency of each transaction. Multiple people can use an Emblem Vault created by a community, a charity, or a trusted third party to add funds. They will be able to trace how the fund is used when the digital value is converted into fiat currency, and who converts it if the owner is known.

As expansion continues, the same “Wallet Seed” could be used to generate multiple and different types of blockchain addresses. In other words, create a universal wallet, like TrustWallet or Genesis, but its ownership would be placed inside an NFT, encrypted, and tradeable like any other token. Therefore, making it trustlessly transferable.

It is more than an entire wallet inside a token, it could become an entire “digital world” inside a token.

The team behind COVAL and Emblem Vault

Shannon Code describes himself in his LinkedIn profile as “…the type of guy who has more fun writing software to play a video game than actually playing the game.” He has been active in Software Development since 2004 and in the blockchain world since 2014. He co-founded Circuit f Value in 2016 and [incorporating] Emblem Vault in 2018.

Dawn Code, the other co-founder of Circuit of Value and Emblem Vault, is “… an explorer, constantly redesigning the future through emerging technologies.”. Her title within the Emblem organization, is “Chief getting it done”. She loves applying cutting edge technology to age old problems. Her ‘technology journey’ started as a test manager, and took her through full-time developer, then into the agile space as a national speaker, through security and blockchain spaces, and most recently founding a start-up focusing on blockchain, machine learning, and AI applications.

[Fun Fact: Shannon and Dawn are married and love software so much that they changed their last name to Code after they got married]

Eric Porper turns smart ideas into smart businesses. He is a strong business development professional with a history of working in information technology and services industry.

Resources to help you learn more

Github: Circuits of Value

Github: Emblem Vault

Official Websites: Circuits of Value, Emblem Vault

Team Profiles: Shannon Code, Dawn Code, Eric Proper

Community Outreach: Telegram, Discord!, Medium Page #1, Medium Page #2, Medium Page #3