0confirmation
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Security Considerations

Threats

There are two ways in which the 0confirmation system can be negatively affected.
    1.
    An origin transaction never reaches 6 confirmations and during the time before liquidation the price of the assets being held as collateral change more than the value of the keeper bond.
    2.
    An origin transaction that had reached one or two confirmations and asset has been forwarded to the users address never reaches 6 confirms. This leads to a total loss for the system
In honest occurrences of the above scenarios the worst that can happen is that the system loses a small amount due to price movements and fees. Given the maximum timeout threshold is a little over an hour the risk to major losses is minimal.
There are more targeted attacks that could be launched but require larger 0cf loans relative to the available liquidity for an asset being purchased in the transaction payload.

Risk Mitigation

To counter this there are some parameters that are deployed at the protocol level and managed by zeroDAO. By controlling these settings we can further limit the probability of any losses being incurred by liquidity providers.

Asset Whitelist

Only assets with ample liquidity at enabled modules should be included to reduce losses that could be incurred by keepers and/or LPs due to slippage.
Current Setting: DAI

Min Loan Size

We have chosen to have a minimum transaction size since the app employs "Gas as a Service" and the total fees can become a very high % of the transaction amount if the user is not careful
Current Setting: .026 BTC

Max Loan Size

We have chosen to have a maximum transaction size to limit the potential for any one user to lose their funds in a swap. The protocol and app are both still very new and very risky right now/
Current Setting: 1 BTC

Fees

0cf charges a fee managed by Zero DAO that is charged on each transaction and distributed as detailed below:
Fee to User
    .1%
Fee Distribution
    45% to Liquidity Pool
    45% to Keeper
    10% to Zero DAO
The fees are also controlled by ZeroDAO and can be adjusted as we find the best balance to incentivize the participants

Zero DAO

0cf is committed to the decentralized ethos of DeFi. We aim to open up control of some of the parameters of the protocol to the community through a governance DAO. As we bootstrap the product and find the right parameters to optimize participation the 0cf founders will be the only members of ZeroDAO.
Last modified 11mo ago