Project Aurora Flashcards
(20 cards)
Definition of Aurora
Goddess of the dawn
Who are the creators of Project Aurora?
Stellar Russia and Elon Musk
Not Aurora How much Gold is in each token of SGB
1 Gram
DAPP
Decentralized App
PoW
Proof of Work
What is proof of work?
Proof of work is a concept used in some public blockchains to demonstrate that a program did the work required to propose a new block for the chain. It is commonly called a consensus mechanism because, eventually, network consensus is reached after there is proof the work was done honestly (in this case, “honestly” means there were no attempts to alter data).
PoS
Proof of Stake
What is Proof of Stake?
How does project Aurora combat Money Laundering
Project Aurora, led by the BIS Innovation Hub, aims to combat money laundering by leveraging data, technology, and collaboration across institutions and borders.
In Project Aurora, PETs (Privacy enhanced technologies) are used to ensure that sensitive financial data remains secure and private while still enabling effective analysis. These technologies include:
- Data Encryption: Ensuring that data is encrypted so that it can be analyzed without exposing sensitive information.
- Machine Learning Models: Using advanced algorithms to detect patterns of money laundering without compromising data privacy.
- Collaborative Analysis and Learning (CAL): Allowing multiple institutions to analyze data collectively while maintaining the privacy of their individual datasets.
By integrating PETs, Project Aurora can enhance anti-money laundering (AML) efforts while upholding data protection and privacy standards.
What is project Aurora
PET
Privacy-enhancing technologies (PETs) in the context of Project Aurora are tools and methods designed to protect sensitive information while allowing for the analysis and sharing of data.
AML
Anti-Money Laundering (AML) refers to a set of laws, regulations, and procedures designed to prevent the conversion of illicit gains into seemingly legitimate funds.
AIML
In the context of the Stellar ecosystem, AIML (Artificial Intelligence and Machine Learning) refers to the integration of AI and ML technologies to enhance the functionality and efficiency of the Stellar network. This integration can help in various ways, such as improving transaction processing, enhancing security, and enabling more sophisticated financial services.
How can passive income be made in project Aurora?
Projects built on Project Aurora can provide passive income through various mechanisms, primarily within the decentralized finance (DeFi) ecosystem.
- Staking: Similar to staking AURORA tokens, many projects within the Aurora ecosystem offer staking opportunities. By staking tokens from these projects, you can earn rewards over time.
- Yield Farming: This involves providing liquidity to DeFi protocols. When you supply tokens to liquidity pools, you earn a portion of the transaction fees and additional rewards in the form of tokens.
- Lending and Borrowing: Some projects allow you to lend your tokens to others in exchange for interest. This can be a steady source of passive income as borrowers pay interest on the tokens they borrow.
- Governance Rewards: Participating in the governance of certain projects can also earn you rewards. By voting on proposals and helping to shape the future of the project, you can receive tokens as compensation.
- Airdrops: Occasionally, projects distribute free tokens to holders of certain assets. These airdrops can be a form of passive income if you hold the qualifying tokens.
What is Protocol 20?
Protocol 20 is a significant upgrade within the Stellar ecosystem, primarily aimed at introducing smart contract functionality through the Soroban platform.
What are smart contracts?
Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They operate on blockchain technology, ensuring that the contract’s execution is transparent, irreversible, and secure.
How do smart contracts work on the blockchain?
- Agreement on Terms
The process begins with two or more parties agreeing on the terms and conditions of the contract. These terms are then translated into code, typically using a programming language like Solidity (for Ethereum) or Rust (for Soroban on Stellar). - Coding the Contract
The agreed-upon terms are written into a smart contract. This code includes the conditions under which the contract will execute, often structured as “if/when…then…” statements. For example, “if Party A sends 10 ETH to the contract, then Party B will send the ownership of a digital asset to Party A.” - Deployment to Blockchain
Once coded, the smart contract is deployed to the blockchain. This involves broadcasting the contract to the network, where it is validated and added to the blockchain. Each node in the network holds a copy of the contract, ensuring decentralization and transparency. - Triggering Conditions
The smart contract remains dormant until the predefined conditions are met. When these conditions are triggered (e.g., a payment is made, a date is reached), the contract automatically executes the agreed-upon actions. - Execution
Upon meeting the conditions, the smart contract executes the specified actions. This could involve transferring funds, issuing tokens, or updating records. The execution is automatic and does not require any intermediaries. - Recording the Outcome
After execution, the outcome is recorded on the blockchain. This ensures that the transaction is transparent and immutable, meaning it cannot be altered or tampered with. All parties can verify the outcome by checking the blockchain.
What are the benefits of using a smart contract?
Transparency: All parties can see the contract terms and execution on the blockchain.
Security: The decentralized nature of blockchain makes it difficult to tamper with the contract.
Efficiency: Automating contract execution reduces the need for intermediaries and speeds up the process.
Cost-Effective: By eliminating intermediaries, smart contracts can reduce transaction costs.
What are some examples of smart contracts?
Financial Services: Automating payments, loans, and insurance claims.
Supply Chain: Tracking goods and ensuring compliance with contractual terms.
Real Estate: Facilitating property transfers and rental agreements.
Voting Systems: Ensuring transparent and tamper-proof elections.
How does compound interest work with project Aurora?
- Initial Investment
You start by investing a certain amount of AURORA tokens into a staking pool or a smart contract designed to generate compound interest. - Interest Calculation
Interest is calculated on your initial investment at regular intervals. The rate of interest and the frequency of compounding (daily, weekly, monthly) are predefined by the staking protocol or smart contract. - Compounding Process
At each compounding interval, the interest earned is added to your principal amount. This new total becomes the principal for the next compounding period. For example, if you start with 100 AURORA tokens and earn 5% interest monthly, after the first month, you will have 105 AURORA tokens. In the second month, interest is calculated on 105 tokens, and so on. - Automated Execution
The entire process is automated through smart contracts on the Stellar blockchain. These contracts ensure that interest is calculated and compounded accurately and transparently without the need for intermediaries. - Passive Income Generation
As your investment grows due to compounding, you generate passive income. The longer you keep your tokens staked, the more significant the effect of compounding, leading to exponential growth over time.
