Smart Layer Network FAQ

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15 Jan 2024

Executable Token Ecosystem

Smart Layer is a suite of technologies enabling the creation and integration of Executable Tokens for advanced use cases based on ERC-5169.

Token Centric Architecture

Smart Layer enables a token centric architecture for

Frictionless data transfer empowering end users with their own data solving PII and GDPR
Token based trust anchors replacing the limitation of centralized Web2 services
Off-chain and on-chain tokens enabling better UX and more advanced use cases

Executable Tokens

Smart Layer enables the creation and composition of Executable Tokens. Where traditional tokens function as assets and proof of ownership, Executable Tokens function as mini dApps carrying business logic, and a programmable interface, enabling tokens to become composable and modular applications opening up a new world of tokenized use cases.

Smart Layer Suite of Tools

Smart Layer technologies are trusted by +1200 developers and +30 major brands for advanced use cases:

TokenScript - A new standard in tokenization enabling executable tokens to carry a programmable interface and executable script
Alpha Wallet - The most forked Open Source EVM wallet enabling executable token use cases
BrandConnector - Advanced token gating solution enabling Web2 personalization via Web3 tokens
TokenNegotiator - The client gateway to connect user digital tokens from on or off chain sources, enabling bespoke tokenized web experiences
Smart Layer Network - A blockchain based service network that facilitates the execution of token logic, acting as a middleware that makes it easy to integrate web services and token functionality

Smart Token

Smart Token is a programmable blockchain-based entity that encapsulates business logic, enabling complex interactions with various systems and other tokens in a self-contained, interoperable format.
Traditional blockchain tokens enabled ownership without a custodian and enforced transaction rules. But they were not designed to replace internet centers like Facebook, Google, and Apple, or to enable the next generation web. This is where Smart Tokens come in.
Smart Tokens are programmable and based on blockchain. They hold the business logic of a token in a self-contained, interoperable format. They interact with different environments and execute their code within them. This makes Smart Tokens potential replacements for traditional internet centers, paving the way for the next generation web interactions.
The web thrives on integration. Internet centers have been the enablers and limiters of the integrations that could happen. Smart Tokens offer a new approach. They carry information and functionality. They can represent a wide range of assets and rights and execute complex interactions with other tokens and systems.
Traditional blockchain tokens can be traded without centralization; Smart Tokens retain this character. This not only makes them more useful but also introduces a new dimension to the concept of rights. When rights are tradeable, they often become linking points themselves, expanding the potential for integration.
In conclusion, Smart Tokens are more than just blockchain-based entities. They are the linking points, the units of integration, and the tradeable rights that could shape the future of the web. As we continue to explore and understand their capabilities, we are likely to see a shift towards a more integrated, decentralized, and user-centric digital world.

FAQs

What is Smart Layer and what does it look like?

Smart Layer is an integration layer that facilitates the next generation of web use-cases. It operates as a distributed service network, governed by a Decentralized Autonomous Organization (DAO), and incentivized by a token-based economy model. The services are provided by nodes that join freely, similar to a blockchain.
To websites that need to use tokens, Smart Layer network nodes appear as a single API gateway with access points for all kinds of smart tokens. This is crucial for breaking the silos of today's web sphere and enabling the server-side deployment of Smart Tokens.

What problem is Smart Layer trying to solve?

The Smart Layer aims to address the "Limit Of 3" problem.
The current web thrives on integration, yet its growth has been hindered by the lack of secure, privacy-preserving, and decentralised mechanisms to facilitate such integration.
After decades into the Web 2.0 era, the majority of websites still depend on three primary types of integrations: login, social media posting, and checkout, typically facilitated by Google ID, Twitter, and Apple Pay, respectively. Despite integrations being the bedrock of the web's functionality, websites are generally unable to incorporate more than these three. This phenomenon, known as the 'Limit of 3' problem, signifies the typical maximum number of integrations a website can have.
To envision the potential of the next-generation web, consider a flight ticket. Currently, this ticket, as a token, only holds value within its issuing platform, such as an airline or online travel agent. But imagine if this ticket could be integrated across various systems. It could update your travel status on social media, guide you to your gate via Google Maps, or automatically communicate flight changes to your hotel or car booking systems. These straightforward use-cases have been long overdue, yet remain unimplemented due to the siloed nature of the web, with centralized points offering only piecemeal solutions.
The Smart Layer is designed to transcend this 'Limit of 3' problem, fostering a new level of integration and paving the way for the next-generation web, where smart tokens serve as both the integration points and the foundational building blocks.

What are Smart Tokens

Smart Tokens, the building blocks of the Smart Layer, are designed to facilitate use-case driven interactions across multiple platforms. They are not just digital assets with self-custodianship, but they include token functions and enable web use-cases.
For instance, a Smart Car token, unlike a traditional NFT, when used on a car rental website, can generate an authorisation to allow the rental websites to generate short term car keys for new customers. It can also be used on an insurance website to get instant roadside assistance by allowing the car to report its latest location through the token. This level of integration and utility is what sets Smart Tokens, and by extension the Smart Layer, apart.

How does Smart Token differ from traditional blockchain tokens?

While traditional blockchain tokens, including digital assets like Bored Ape, enable certain use-cases, they primarily serve as self-custodian assets within their specific ecosystems. In contrast, Smart Tokens are engineered to facilitate use-case driven interactions across diverse platforms. This design allows for an integrated web experience while preserving the ownership attributes inherent to traditional tokens.
Consider a Smart Car token. Unlike a traditional Non-Fungible Token (NFT), this smart token can interact with various platforms. On a car rental website, it can generate an authorization, allowing the site to create short-term car keys for new customers. On an insurance website, it can facilitate instant roadside assistance by enabling the car to report its latest location through the token.
Similarly, a Health Token, another example of a smart token, can hold a user's health data and log access to it, enabling secure and controlled sharing of sensitive information across healthcare platforms.
It's important to understand that the functionality of smart tokens cannot be achieved by merely adding transactions or functions to existing blockchain tokens or smart contracts. This is because smart contracts, while powerful, are not designed to handle complex web logic. Just as one can't transform an SQL database into a web service by simply adding functions, one can't extend traditional blockchain tokens into smart tokens without a dedicated infrastructure like Smart Layer.

Why can't integration needs be addressed by other intermediate layers like FileCoin, IPFS, or Whispernet?

While FileCoin, IPFS, and Whispernet offer valuable services, they don't cater to the specific integration needs that Smart Layer addresses. These needs span from translating token-related text, such as flight routes, to orchestrating complex data pipelines - for instance, updating an airline smart token with real-time delay information, triggering hotel rebooking, or linking a smart car with the roadside assistance company chosen by the current insurance token.
However, it's important to note that without the successful implementation of these foundational technologies, Smart Layer wouldn't have a solid base. It's the maturity of these technologies today that makes the existence and functionality of smart layer possible.

Why are Smart Tokens considered "smart"?

Smart Tokens are considered "smart" because they can snap onto various web use-cases like Lego blocks. For example, a flight ticket token can be "snapped" to Google Maps to get notifications about which gate to go to, or "snapped" into Google Calendar to get notified about delays, or dragged to a visa-on-arrival website to auto-apply for a visa.
In the 21st century, the term "Smart" represents "multi-capability," rather than "intelligence" - a trait we now attribute to AI. Consider smartphones: they aren't AI-phones that understand or anticipate users' needs. Instead, they are multi-functional devices performing a wide range of tasks beyond just making calls. Their capabilities continue to expand with the addition of use-case specific apps, often transcending the original intentions of the smartphone producer. Similarly, a Smart Token isn't an AI-powered entity generating profits; it merely enables various use-cases, often exceeding the purview of the smart token issuer.

What is the relationship between Smart Token, Smart Layer, and TokenScript?

Smart Layer, and TokenScript are three interconnected components that together enable a new level of integration and functionality on the next-generation web.
Smart Tokens are the building blocks of this ecosystem. They are not just digital assets but also include functions that enable web use-cases. These tokens can represent anything from a flight ticket to a health record, and they carry the ability to interact with different platforms and services.
TokenScript is the technology that enables these interactions. It is a container for the code that powers token-based integrations. This code defines how a Smart Token behaves and interacts with other systems. TokenScript allows Smart Tokens to be more than just static assets; they become dynamic entities capable of complex interactions.
Smart Layer is the infrastructure that supports these interactions. It is a service network designed to facilitate the deployment and operation of Smart Tokens and their TokenScripts. From the perspective of websites, Smart Layer acts as a RESTful API provider, enabling them to interact with various Smart Tokens.
In summary, Smart Tokens are the entities that carry out actions, TokenScript is the language that defines these actions, and Smart Layer is the environment where these actions take place. Together, they form a cohesive system that enables a more dynamic, integrated, and functional web.

How will Smart Layer work for users in the transition between Web2, Web2.5, Web3? What does the transition of User Experience look like for the end user from what they are familiar with today?

There are three stages in the user experience with the Smart Layer. Initially, a user needs to verify their Web 2.0 identity through a website or a Progressive Web App (PWA). This onboarding process doesn't require the user to have a crypto wallet, but it does generate user-specific keys.
Whenever the user interacts with a website that integrates tokens, such as purchasing a tokenized airline ticket or using such a ticket when booking a hotel, the user is directed to the PWA or the website (on mobile phones and desktops, respectively) for authentication through Identifier Attestation. Once authenticated, the website accesses the user's token through the connected Smart Layer and utilizes the token functions.
For users who want to trade these smart tokens, they need to create a crypto wallet and link the tokens they own through their Web 2.0 identity to a wallet address. This linkage can be done on-demand, ensuring that the number of transactions is not more than if the user had acquired the token using a crypto wallet from the outset.
In the final stage, users with a smart wallet have a runtime environment for smart token logic, similar to how the Smart Layer executes network-side token logic. They can perform more complex tasks, such as participating in multi-party computations to determine the recommended shopping list by using a health token in the wallet, while accessing Online shopping This represents the highest level of integration.

Does the Smart Layer aim to counter the issues of the current centralized web model by giving users more control over their personal data and their interactions with both centralized and decentralized technologies?

Absolutely, the Smart Layer addresses issues on two fronts.
Firstly, it empowers users by giving them more control over their personal data and their interactions with both centralized and decentralized technologies. This is achieved by leveraging the power of smart tokens, which enable a more user-centric and privacy-preserving web experience. Users can dictate the level of their interaction with various technologies and services, thereby reducing unnecessary data collection and enhancing user autonomy.
Secondly, the Smart Layer also addresses the limitations of the current centralized model from a market perspective. The centralization model not only compromises user privacy and control but also stifles market innovation. It leads to a situation where a few tech giants dominate, limiting the diversity and competition that are essential for a healthy market. This is reflected in the "Limit of 3" problem, where most websites are limited to three primary types of integrations. By providing a decentralized framework for integration, the Smart Layer can break this deadlock, fostering a more vibrant and innovative web ecosystem.

Is Smart Layer proprietary? Who is the owner? Who builds it? Is there a DAO?

Smart Layer is enabled by open-source software and operated by a community consisting of two types of network nodes. Its governance is DAO-based. Smart Tokens can be issued by proprietary issuers as long as token rules are explicit in the smart contracts.

Is Smart Layer centralized?

Token issuers and token integration parties are individual parties or DAOs. SmartLayer does not rule if these token issuers should be centralized, only that they should allow competition. Smart Layer is governed by a decentralized autonomous organization, but one crucial difference is that although Smart Layer lends trust from the underlying blockchain, it is not a blockchain itself. It is a distributed service network with a built-in mechanism to motivate and monitor node operators to contribute their resources and guarantee the service level agreement. Unlike blockchain, it can't be governed-less, as the consensus mechanism that ensures the integrity of the blockchain doesn't ensure serviceability, which is demanded from a service network and integration points.

Does it scale?

Smart Layer's designed goal is to scale in the following 3 dimensions.
First, scaling the number of tokens it can support. By deploying a new tokenscript, the service nodes allocated to service such tokens will gain additional API access points. This allow token functions to scale without depending on the network upgrades. In comparison, if Google Wallet wants to include car key functions they will introduce new APIs through update of their wallet systems.
Second, scaling the network service output. The nodes are incentivised to provide token API access including storage of token data and executing token functions in a manner similar to lambda. So the size of tokens depends on how much incentivise the use-cases needing these tokens can provide. It's not guaranteed that any token use-cases will survive, but because the users of the integrations (being websites or end user) pays the cost, it has a better fit than having token issuer being integration point themselves.
Finally, the Smart Layer tackles the scalability challenge from an integration standpoint. In the existing landscape, the complexity of integrations grows non-linearly, often quadratically, as every new integration impacts existing ones, reducing the overall system's reliability and security. For instance, one integration with 99% availability could lower the system's overall availability, even if other integrations have 99.999% availability.
The Smart Layer simplifies this by acting as an integration bus, offloading the scalability issue of integrations. It provides a unified interface that allows web services to easily integrate any token functionality, eliminating the need for direct token integration. This design enables the Smart Layer to scale up to accommodate an increasing number of tokens.
Therefore, the Smart Layer's design goals include handling integration features such as cross-checking multiple tokens and managing authorisations to compose tokens for functions. This is a design challenge that we set out to overcome, and it is crucial for the Smart Layer to truly enable limitless integration in a secure and reliable manner.
In essence, the Smart Layer is designed to scale both in terms of the number of tokens it can support and the range of functionalities it can provide. It does this by decentralizing the integration process and enhancing token functionality, thereby addressing the scalability issues inherent in the current token ecosystem.