Inventor of Ethereum’s ERC-20 Token Standard Plans New Blockchain ‘LUKSO’ for Creative Types
Fabian Vogelsteller is launching his new project, a layer 1 blockchain “LUKSO,” and validators will be able to join the network through the Genesis Validator Smart Contract Deposit.
Fabian Vogelsteller, an Ethereum veteran who helped shape the ecosystem in the early days, is taking on a new venture – a blockchain to succeed where he says others have failed, in catering to creative, fashion-oriented and art-world types.
One of the 39-year-old, self-taught German programmer’s most significant contributions to Ethereum was the invention of ERC-20, the blueprint for creating tokens that are compatible with the blockchain. That innovation led to the infamous initial coin offering boom of 2017-2018. Several of the biggest tokens by market capitalization are based on the standard, including Uniswap’s UNI, Shiba Inu’s SHIB and Arbitrum’s new ARB.
Vogelsteller is now turning his attention to a new project, LUKSO, a soon-to-be-launched layer 1 blockchain that he says is designed for the “creative economy.” It would compete with Ethereum itself, by far the dominant smart-contracts blockchain with a market capitalization of $217 billion.
The explosion in NFTs for everything from collectibles to art and music, along with a plethora of imagined metaverses, is a good reflection of the potential for creative-type applications on the blockchain, according to Vogelsteller. But he says the systems are nowhere near maturity and not easy enough to use.
“One of the advantages for starting a new network was thinking about how we can improve the basic direction of the blockchain,” Vogelsteller told CoinDesk.
LUKSO will have a window of opportunity for validators to join the network. There will be a Genesis Validator Deposit Smart Contract on the Ethereum blockchain, which will go live in a few weeks.
Just like Ethereum was born out of Bitcoin, LUKSO will be born out of Ethereum, Vogelsteller told CoinDesk: “We use Ethereum as an on-ramp in a way, like Ethereum used the Bitcoin network.”
On LUKSO, the Genesis Validator Deposit Smart Contract will allow users to deposit LYXe, an ERC-20 token that went live in a reversible ICO round in June 2020, to become a genesis validator. (Once the mainnet goes live, LYXe will be converted to LYX, the native token for LUKSO.)
Each validator on the LUKSO blockchain needs to lock up 32 LYXe in order to participate in the block validation process – similar to the 32 ETH that’s required to be “staked” on Ethereum to participate as a validator.
According to Vogelsteller, what’s stopping Ethereum from becoming adopted on a mass scale is that the applications aren't making the user experience easy. It’s hard for the average person to understand what address belongs to which wallet, and it takes effort to follow the movement of transactions on the chain. To solve this, LUKSO will introduce a comprehensive all-in-one profile that brings on-chain activity under a single entity, known as a “universal profile.”
Vogelsteller was born in the tiny German town of Unterwirbach in Bavaria where he says he never really fit in. He moved to another small city in southwest Germany where he finished his studies at Schmalkalden. He studied media design at the Bauhaus University in Weimar.
“I never studied computer science or anything technical. Everything I know I learned by myself coding websites since I was 14,” Vogelsteller said.
In 2013, Vogelsteller first learned about blockchains. He also happened to meet the original Ethereum team a day before their pre-sale. Six months later, Vogesteller started working for the Ethereum Foundation in Berlin, where he built the first Web3 browser, the first Ethereum wallet and other developer tools.
During his time at the Ethereum Foundation, Vogelsteller, together with Vitalik Buterin, co-founder of the Ethereum blockchain, pioneered ERC-20, which created a set of rules that tokens on Ethereum blockchain have to adhere to, making it easier for developers to know how any new ERC-20 token will behave.
Buterin had originally proposed an initial token standard in 2015, but Vogelsteller looked at the proposal, changed a few things and proposed ERC-20 to the Ethereum community to initiate a conversation. It was adopted in September 2017 and remains the de facto standard for fungible tokens on Ethereum.
Vogelsteller also first introduced the concept of a blockchain-based identity on Ethereum in 2017, known as ERC-725. It gave protocols the ability to create decentralized identity standards on Ethereum. While the Ethereum standard didn't take off like ERC-20 did, projects like Origin Protocol implemented the standard.
By 2018, Vogelsteller left the Ethereum Foundation to focus on LUKSO and improve on standards that he proposed during his time working on the Ethereum blockchain.
Now, Vogelsteller has drawn inspiration from the decentralized blockchain identity standard he created for Ethereum, but has turned that into a series of LUKSO Standard Proposals, or LSPs, and the blockchain account at the heart of the ecosystem known as LSP0.
LSP0, which turns ERC-725 into a smart contract-based profile, tackles the functionality and makes profiles more user friendly on the blockchain. It combines a crypto type wallet, similar to an Ethereum account, with smart-contract storage. In addition to having a regular crypto account attached to these profiles, users can link to any public information they want, like their Twitter account or non-fungible tokens.
On LUKSO, users, organizations and teams can create any profile they wish to identify themselves as in Web3; the profile also would act as their blockchain account, making the user experience more seamless.
‘Way more’ than a wallet
On Ethereum, if you hold a regular account, known as an "externally owned account," it’s impossible to add information like the user’s name, age or other information to the public key address, meaning aspects of identity cannot be integrated into the protocol layer.
And while crypto users often enjoy using aliases or being anonymous, having easy ways to identify what a user presents themselves online with their on-chain activity is missing. Vogelsteller believes that universal profiles solve this.
“It can be a wallet, but it's way more than that,” Vogelsteller told CoinDesk. “It is a whole profile. It has a name. It has a picture. It can be managed by multiple devices, by multiple keys, with different levels of permission.”
The universal profiles also get "key managers," which can let users add multiple keys to their on-chain account that are assigned or execute different actions. The key manager checks which key can do what on the universal profile and can restrict specific activities of certain devices. In addition, having these multiple keys enables some kind of backup system in the event that a user loses access to a key.
There could be benefits for decentralized autonomous organizations, online stores, services or anti-money-laundering and know-your-customer processes required by authorities; organizations are able to store, use and cross-check the public information of a universal profile.
The idea of LUKSO is to become a whole ecosystem for creatives. Vogelsteller said LUKSO is “building a whole toolset and ecosystem and marketplace around NFTs using universal profile on the base,” making it easier to identify creatives and their profiles, and their works on the blockchain.
While the hype these days seems to be around “layer 2” scaling tools for Ethereum, Vogesteller argues that LUKSO needed to be its own network.
New token standards
He argues that the network capacity of these popular layer 2s and Ethereum is full. “Mainnet is full, and it's expensive," he said.
LUKSO isn't the first blockchain to work on identity issues. Ethereum scaling project Polygon recently came out with Polygon ID, which uses zero-knowledge technology that allows users to verify their identities without revealing sensitive information. Other protocols like Ethereum Name Service exist to help connect domain names to users’ wallet addresses, making crypto addresses more identifiable.
“When you put the profile on the blockchain, everything you do now with your profile is literally happening on the blockchain. So there's a lot more things you can do now,” Vogelsteller said.
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