A custodial, cross-chain platform operating across multiple chain. Utilizing a 3rd party to store user deposited assets.
MicroChains aims to function across both EVM and non-EVM chains, and to support both emerging as well as mainstream chains. A user’s assets are deposited and locked up with a 3rd party custodian, Huobi Trust, who is responsible for securely storing those assets.
Once the deposit of the asset is confirmed, the MicroChains platform mints the wrapped tokens, 1:1, on the target chain and sends it to the user’s given wallet address on the target chain.
An internal multi-node verification (VoMEN) system, developed by MicroChains, will be used to confirm that the assets have been deposited by the user. Huobi Trust will also acts as a third party validators, and their validation of the deposited asset is required before the wrapped assets are minted and distributed.
MicroChains rebranded from CBTC to MicroChains in March 2022. The rebrand is designed so that they can service many more chains than the originally vision of serving just Cardano. The documentation released for MicroChains was severely less in-depth than the documentation for CBTC was.
How it Works
Deposits and Minting
A user deposits their assets through the MicroChains page into Huobi Trust (no account registration required). At this time the user also provides the details of which chain they want to receive their wrapped assets on, along with a receiving address for those assets.
The deposit is then verified on-chain by both the platform, via its internal multi-node verification (VoMEN) system, and independently by the 3rd party Huobi Trust. Assets are then instructed to be minted on the target chain and are sent to the user’s provided wallet address.
Whilst this internal multi-node verification is hinted to many times in the whitepaper, and is said to be a more reliable that other methods of verification, the way it functions is not explained to the reader.
Withdrawals and Burning
To withdraw an asset a users sends the amount of wrapped assets they want to withdraw to a designated burn address. Once this transaction has been verified by both MicroChains and Huobi Trust then the locked assets are released to the burning user.
MicroChains puts forward that regular audits of the locked assets will be undertaken by “well-known” auditors. Regular is an undefined term here, and these audit institutions are not named. Also, Huobi Trust will regularly (it does not say how regularly) publish the assets of the custody account on their official website.
In their previous CBTC documentation they said the same thing and that users could then verify these locked amounts against the minted wrapped assets themselves. It is assumed that the same self verification will exist here.
An audit was competed on the CBTC platform prior to the rebrand to MicroChains. You can read that audit here. It is not clear if this audit still applies to the new protocol being developed by MicroChains.
A few red flags were raised by this project during research and we wanted to list those here:
Tokens With No Product A token sale with no product yet on the market is one of the biggest red flags out there.
Team The team is not talked about at all in the MicroChains whitepaper or on their website. However, in their previous iteration as CBTC, an anonymous team were alluded to as having high levels of experience in all the faucets necessary to manage the protocol. Why has this information (at least) not been copied over to the MicroChains paper?
Advisors The website shows two faces of purported advisors from the University of Queensland. Their images and bio almost exactly match information found in the first search results when conducting an internet search of their names.
A Loss of Information Whilst not a typical red flag it is one all the same. The platform rebranded from CBTC to MicroChains in March 2022 and, in doing so, they changed the way the platform would operate and now also provide fewer details on the parameters of their platform than they had given before. You might expect a rebrand and redirection taken with such conviction to have just as much, if not more, of an idea of their operational parameters than before.