Hi I am back with an improved steem token protocol which is called SPTP for now. The protocol name might be changed.

Basically it is an one method to create a token on STEEM without changing any code of the current steem code.

This protocol is on-chain solution which does not use any other off-chain data.
But to handle the token data, it needs a special program running on a node.

I took inspiration from Bitcoin's Runes protocol for this idea.
And I noticed I can put a function in the block so that a program can read and execute the function. This feature will be used to validate a token creation.

The whitepaper is an initial draft and helped by Claude 3.5 Sonnet. But the idea is from myself @etainclub.

Any comments and feedbacks are welcome.

TL;DR

SPTP is an innovative protocol that leverages existing features of the Steem blockchain to create and manage custom tokens. Key aspects include:

• Token creation and management via Steem posts
• Token transfers using Steem's custom_json operations
• On-chain protocol definition and validation rules
• Dynamic code execution for token validation in a sandboxed environment
• Decentralized token balance management through SPTP nodes

The protocol allows for creating various token-based applications on Steem without modifying the core blockchain. It uses Steem's native features for data storage and transmission, while SPTP nodes handle the interpretation and execution of the protocol rules.

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SPTP (Steem Post-Based Token Protocol) Whitepaper

1. Overview

The Steem Post-Based Token Protocol (SPTP) is an innovative protocol that leverages existing features of the Steem blockchain to create, manage, and transfer user-defined tokens. SPTP implements a fully on-chain token system by utilizing Steem's posting and custom JSON functionalities.

2. Background

While the Steem blockchain provides powerful content creation and curation features, it lacked native support for user-defined tokens. SPTP bridges this gap, enabling the development of various token-based applications within the Steem ecosystem.

3. Protocol Structure

3.1 Protocol Definition Post

A Steem post that defines the protocol rules and token creation/management logic. Here's a concrete example:

{
  "protocol_version": "1.1",
  "protocol_name": "SPTP",
  "token_creation_rules": {
    "symbol_format": "^[A-Z]{3,7}$",
    "max_supply_format": "^[0-9]{1,10}\\.[0-9]{0,8}$",
    "required_fields": ["symbol", "name", "max_supply", "precision"]
  },
  "token_issuance_rules": {
    "issuer_must_be_creator": true,
    "max_issuance_per_operation": "1000000.00000000"
  },
  "token_transfer_rules": {
    "min_transfer_amount": "0.00000001"
  },
  "validation_function": "
    function validateToken(tokenData) {
      if (!/^[A-Z]{3,7}$/.test(tokenData.symbol)) {
        return [false, 'Invalid symbol format'];
      }
      if (!/^[0-9]{1,10}\\.[0-9]{0,8}$/.test(tokenData.max_supply)) {
        return [false, 'Invalid max supply format'];
      }
      if (tokenData.precision < 0 || tokenData.precision > 8) {
        return [false, 'Precision must be between 0 and 8'];
      }
      return [true, 'Token data is valid'];
    }
  ",
  "created_tokens": []
}

3.2 Token Creation Post

The post format for creating a new token:

{
  "protocol": "SPTP",
  "protocol_post": "sptp_admin/sptp-protocol-v1.1",
  "action": "create_token",
  "token_data": {
    "symbol": "EXAMPLE",
    "name": "Example Token",
    "max_supply": "1000000.00000000",
    "precision": 8,
    "metadata": {
      "website": "https://exampletoken.com",
      "logo": "https://exampletoken.com/logo.png"
    }
  }
}

3.3 Token Transfer

Token transfers are conducted through Steem's custom_json operations:

{
  "required_auths": ["sender_account"],
  "required_posting_auths": [],
  "id": "sptp_transfer",
  "json": {
    "symbol": "EXAMPLE",
    "amount": "100.00000000",
    "to": "receiver_account",
    "memo": "Payment for services"
  }
}

4. Technical Details

4.1 Token Creation and Validation Process

1. A user creates a token creation post.
2. An SPTP node detects and processes this post.
3. The node executes the validation_function from the protocol definition post to validate the token data.
4. If validation succeeds, the node calculates a hash of the token creation information.
5. The node adds this hash as a comment to the protocol definition post.

4.2 Token Balance Management

SPTP manages token balances as follows:

1. On-chain Transaction Record: All token transfers are recorded as custom_json operations on the Steem blockchain.

2. Off-chain State Management: SPTP nodes analyze all token transfer transactions to calculate and manage token balances for each account.

3. Balance Calculation Method:

   • Initial Issuance: The amount specified at token creation
   • Received Amount: Sum of all transfers received by the account
   • Sent Amount: Sum of all transfers sent by the account
   • Current Balance = Initial Issuance + Received Amount - Sent Amount

4. Indexing and Caching: For quick balance queries, SPTP nodes maintain indices by account and token, and periodically cache balances.

5. Regular State Validation: Nodes periodically re-validate the entire transaction history to ensure balance accuracy.

4.3 Dynamic Function Execution

SPTP uses RestrictedPython to safely execute the validation function included in the protocol definition post:

class SPTPFunctionExecutor:
    def execute_validation_function(self, function_str, token_data):
        # Safe function execution logic using RestrictedPython
        ...

5. Token Creation Example

Here's a concrete example of creating an "EXAMPLE" token using SPTP:

1. Check Protocol Definition Post:

   • The user checks the current protocol rules in the "sptp_admin/sptp-protocol-v1.1" post.

2. Write Token Creation Post:

   {
     "protocol": "SPTP",
     "protocol_post": "sptp_admin/sptp-protocol-v1.1",
     "action": "create_token",
     "token_data": {
       "symbol": "EXAMPLE",
       "name": "Example Token",
       "max_supply": "1000000.00000000",
       "precision": 8,
       "metadata": {
         "website": "https://exampletoken.com",
         "logo": "https://exampletoken.com/logo.png",
         "description": "This is an example token for demonstration purposes."
       }
     }
   }
   

3. SPTP Node Processing:

   • The node detects this post and executes the validation function.
   • Upon successful validation, the node calculates a hash of the token creation information.

4. Hash Recording:

   • The node adds the following comment to the protocol definition post:

     {
       "action": "token_created",
       "symbol": "EXAMPLE",
       "creator": "user123",
       "creation_tx": "user123/create-example-token-post",
       "hash": "a1b2c3d4e5f6..."
     }
     

5. Token Issuance:

   • The token creator executes the following custom_json operation to issue initial tokens:

     {
       "required_auths": ["user123"],
       "required_posting_auths": [],
       "id": "sptp_issue",
       "json": {
         "symbol": "EXAMPLE",
         "amount": "100000.00000000",
         "to": "user123"
       }
     }
     

This completes the successful creation and initial issuance of the "EXAMPLE" token.

6. Security Considerations

• All token operations utilize Steem's existing permission system.
• Dynamic function execution occurs in a restricted environment to enhance security.
• Multiple independent SPTP nodes can cross-validate each other's results.

7. Applications

Potential applications leveraging SPTP include:

• Community point systems
• Digital asset representation
• Voting and governance tokens
• Reward programs
• Decentralized Exchange (DEX) implementation

8. Conclusion

SPTP provides a powerful and flexible token system by leveraging existing features of the Steem blockchain. This protocol opens up new possibilities in the Steem ecosystem and is expected to facilitate the development of various decentralized applications.

9. References

1. Steem Whitepaper
2. RestrictedPython Documentation
3. Bitcoin Colored Coins
4. Ethereum ERC-20 Token Standard

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cc.
@pennsif
@steemcurator01

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