Application of Blockchain (Ethereum) Technology

Blockchain technology enables the sharing of transaction information with everyone who is involved in the transaction. Its advantages — such as balance checking, ease of asset transfer, and unhackable secure networks — have been well-proven and are unrivaled for safe and transparent asset trading. Ethereum utilizes “smart contracts” to scale blockchain applications and is increasingly supported by global financial institutions and leading companies. Surpassing the simple model of the ledger for monetary transactions (e.g., the case of Bitcoin), Ethereum utilizes a public database and programmable code on the blockchain to streamline complex financial transactions. However, blockchain technology alone in its current state cannot produce a serviceable product like YOSEMITE, due to the lack of a stable currency, limited processing volume, and long processing time, while the fees users must pay for any action on the system (the “gas fees”) become too burdensome.

Limitations of Blockchain Technology

It is not feasible for traditional cryptocurrencies like Bitcoin and Ether (ETH) to be used as a currency for trading due to their volatility. It is common to see the Ether price at $300/ETH at one point in time, then end up at $250/ETH or $350/ETH a few hours later. Frequently, one confirms a sell order thinking to receive $300 in return, but instead ends up receiving $250 or $350 once it is sold. A share trading service is impossible to operate on the blockchain without relying on a stable currency like US Dollars. Furthermore, even Ethereum – while more advanced than Bitcoin – can only process 7-10 transactions per second, and it takes tens of seconds to validate the transaction. Such limited processing capacity and slow processing times are critical drawbacks compared to a conventional trading exchange. Gas fees required for Ethereum transactions also pose a significant problem. Not only must users pay when trading transactions take place, they also are required to pay a gas fee ranging from 0.30 to 0.80 USD when making or cancelling an unresolved order. On top of the inequity and burden of gas fees, every user is required to own Ether to pay them. For most individuals unfamiliar with cryptocurrency, these kinds of limitations/ obstacles would render extremely impractical any trading on the blockchain.

Top-of-the-Line Hybrid System

Asset Exchange YOSEMITE hybrid architecture diagram
<YOSEMITE's Hybrid System Architecture Diagram>

YOSEMITE’s patented hybrid system innovatively solves the problems of blockchains. While retaining the security and the transparency of blockchain technology, we have implemented a centralized server system for superior fast processing of large transaction volumes, and have created a stable currency named Digital USD to establish the infrastructure for a secured trading platform.

YOSEMITE’s system records all transaction and asset balance records on the Ethereum blockchain, while processing the matchmaking of orders on a centralized server to maximize efficiency. Although matchmaking of orders technically occurs off the blockchain (off-chain), all matching processes are encrypted with users’ signatures and recorded on Ethereum — proving that all orders are made by the users themselves, and that no transactional data has been manipulated. Furthermore, by resolving actions in the centralized server, users no longer need to pay gas fees.

Hybrid Decentralized Centralized
Transaction
Performance
Good Bad Good
Blockchain
Fee
No Gas No
Data Transparency
& Auditability
Yes Yes No
Local Account
Creation
Yes Yes No
Fiat or Stable
Currency
Yes - Yes
User Interface Easy Hard Easy
Trading Volume High Low High
<Comparison of Exchange Systems>

This pioneering core concept will enable YOSEMITE to be the first mainstream commercialized blockchain service in the world.