Announcing the Passage of ARC-100: Best Practices for Cross-Chain Operations

The Aleo team is pleased to announce the successful passage of ARC-100, with voting concluding on June 24. The measure passed with 484 votes for, 54 against, and 46 abstaining, setting the stage for new guidelines for bridges, validators, and ecosystem best practices within the Aleo Network. This foundational moment marks a significant step forward in Aleo’s mission to create secure, transparent, and compliance-friendly cross-chain operations.

What is ARC-100?

ARC-100 is a comprehensive collection of best practices and guidelines designed to mitigate the misuse of the Aleo Network by illicit actors. These guidelines apply to bridging protocols to and from the Aleo Network, as well as to the Validators operating within it.

In brief, ARC-100 establishes procedures for handling wallet addresses tied to documented bad actors, setting transaction limits and dynamic timelocks, and limiting exposure to certain prohibited locations. Additionally, the measure encourages validators to remain vigilant and take necessary precautions to enforce these guidelines.

The Aleo Network Foundation consulted with experts, industry groups, and the community to inform this proposal. These measures aim to ensure that the Aleo Network starts on the right foot, fostering a sustainable, compliance-forward, and credible ecosystem as it evolves and grows.

Participation Guidelines

These guidelines represent Aleo’s recommended approach as stewards of the network, setting an example of good behavior. It is up to each ecosystem participant to decide how best to implement these practices, along with any additional measures that might suit their specific situation.

Discussion and Reasoning Behind ARC-100

The quality of discussion in the governance channel on Discord was impressive, with valid points raised on both sides of the debate. Even those who disagreed with the proposal contributed valuable feedback that will help shape the execution of this ARC.

Key Points from the Discussion:

• Upholding Web3 Values: Community members emphasized the importance of implementing security rules while maintaining the core values of decentralization. Concerns were raised about ensuring participants are not unfairly barred from the network. The community suggested regular updates, feedback mechanisms, and user support from the Foundation.
• Regulatory Considerations: Some members noted the reliance on US-based regulations, such as OFAC, could create a US-centric bias. ARC-100 aims to create a process for applying existing laws, which may differ by jurisdiction. Additional lists, like those from FATF, could also be considered.
• Flexibility and Evolution: These guidelines are not hard-coded rules but strongly encouraged suggestions. As the regulatory landscape evolves, the Aleo team will adapt and refine ARC-100 accordingly.

Why is ARC-100 Notable?

ARC-100 represents a significant step toward a more transparent and compliance-friendly landscape for the Aleo Network. The Aleo Foundation is committed to being a thoughtful participant in the network, aiming to develop a safer ecosystem that encourages positive use of technology by a wide range of participants.

Community and Expert Contributions

The Aleo community, experienced validator operators, and compliance-related organizations played critical roles in shaping ARC-100. Community members provided essential insights on how they intend to use and build on the Network, considering the important aspects highlighted by ARC-100. Validator operators shared their experiences from other networks, offering valuable advisory guidance. Compliance organizations helped define the right scope and progress for managing desired behaviors within the Aleo ecosystem.

By suggesting these guidelines, the Aleo Foundation aims to set a precedent for a community-fueled, regulatorily-aligned foundation to kickstart the ecosystem’s growth in the coming years.

Join the Aleo Community

To participate in the Aleo community and stay informed about future developments, join the Aleo Discord. The team looks forward to collaborating with you on this exciting journey.