The Trilemma of Institutional Adoption of Digital Assets

While institutions are keen on investing in crypto assets, the entry barriers are preventing them from doing so. The three key road blocks for a successful institutional portfolio of crypto assets are

Overview(middle1)

Security

With more than $11 billion hacked from various exchanges, protocols, bridges etc, security is the top most concern for institutions. Amongst this, private key losses account for the majority of the hacks.

Overview(middle2)

High Transaction Fees

According to etherscan, an average swap cost in Jan of 2022 is $4.23. This is exceptionally high and a deterrent to profitable trades for institutional investors.

Overview(middle3)

Fast Finality

Today, due to the intrinsic nature of the layer 1 blockchains, the finality rates are extremely high due to which slippages occur that's non conducive for high value transactions. It takes an average of 180 seconds for finality on ethereum.

Crypto Attacks

The bane of all security issues is the private key. Following are some of the biggest heists in the crypto world.

PolyNetwork Attack : $610 Million

Date: Aug 2021

Coincheck Exchange Attack : $534 Million

Date: Jan 2018

KUCOIN Exchange Attack : $281 Million

Date: Sept 2020

BitMart Exchange : $196 Million

Date: Dec 2021

BHX De-FI : $139 Million

Date: Nov 2021

Vulcan Forget MktPlace : $135 Million

Date: Nov 2021

C.R.E.A.M Finance : $130 Million

Date: Nov 2021

BitFinex Exchange Attack : $60 Million

Date: Nov 2021

UPBit Exchange Attack : $45 Million

Date: Nov 2021

Binance Exchange Attack : $40 Million

Date: Nov 2021

All these hacks were executed by exploiting a vulnerability to access the private key.

The achilles heel of the blockchain ecosystem

Private Keys is the main attack vector in the Blockchain Ecosystem

Hackers were able to drain $196 million of crypto from crypto exchange BitMart by stealing a private key that opened two hot wallets, BitMart CEO Sheldon Xia tweeted

Japanese exchange Bitpoint was hit by hackers on July 12. An estimated $28 million of BTC, XRP, ETH, BCH, and LTC were stolen-about 75% of which belonged to Bitpoint customers. The exchange said unauthorized access to the private keys of its hot wallets facilitated the theft.

The attacker who hacked more than $600 million from the China-based Poly Network platform has released the private key for the remaining $141 million of the stolen cryptocurrency

Bitfinex utilized BitGo software as part of its security solution even as at the time of the attack. The bitcoin exchange lost nearly $70 million worth of bitcoin to hackers. BitGo was not itself hacked, but processed withdrawal requests from the hacker, who had obtained access to Bitfinex's keys

Approximately 20% of all Bitcoins are lost due to lost private keys, which represents a range of between 68,110 and 92,855 Bitcoin that are recoverable — or between $3.6 and $4.2 billion

Rooba.Finance is a groundbreaking and radically new approach to custodial solutions. Using a proof of authority layer 2 network, Rooba offers military grade security, fast finality and transaction costs that are 90% lower.

Rooba.Finance consists of two main offerings to provide a 360 degree approach to Institutional Grade Asset Management.

To know more about the offerings click here

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