By Eli Ben-Sasson, CEO of Starkware. As the impending changes in Washington and the associated jump in crypto prices have us all gripped, there's another defining moment happening right now in crypto that demonstrates blockchain’s true power. It’s a development that Ethereum creator Vitalik Buterin heralded on stage at Devcon in Bangkok Tuesday, which could completely reshape how we protect our money in times of crisis, achieving what generations of bankers and lawyers have struggled to do: ensure a smooth, swift return of funds to users when a financial platform shuts down. Imagine a multi-million-dollar financial application closing its doors, yet every user (as unsecured creditors in the same pool) retrieves their money instantly, without hassle or third-party intervention. That's exactly what happened when the crypto platform dYdX shut off its Ethereum-based operations with $70 million of user funds inside it — only to seamlessly return millions of dollars to its users. No drawn-out legal processes, no waiting periods — just immediate access to funds, as simple as pressing a button. This is a story of blockchain’s relevance for the future of finance, and not just another story of Web3 inside baseball. This ongoing claims process can be monitored on any Ethereum block explorer and it’s a game-changer for anyone who's ever worried about losing access to their money during a banking crisis or insolvency. Traditionally, financial systems often entangle consumers in lengthy, complicated proceedings when things go south. The first use of the Escape Hatch — an event that is ongoing right now — will be recalled as a watershed moment when companies outside of crypto started to appreciate the unique ability of blockchain rails to win consumer confidence. The Escape Hatch was designed and hardwired into the scaling infrastructure that dYdX was using on Ethereum – StarkEx, which my company StarkWare built and operates. It is a failsafe mechanism to ensure that, in the case of any disruption, funds are accessible to their rightful owners via the Ethereum main-chain (L1), free from administrative red tape and time limits. Think of any scenario that could normally part you from your funds — the company where you deposit goes bankrupt, is shut down by a government, or aliens abduct its entire staff. The Escape Hatch was built to be exactly what the name suggests — you can open it up and take out your funds. And, on Oct. 28, when dYdX went offline on Ethereum, it worked exactly as intended. The Escape Hatch can be, and should always be, hardwired into blockchain technology, allowing users to withdraw their assets directly. The use of a failsafe mechanism, where a smart contract distributes funds based on predetermined parameters, could be implemented for a range of consumer use cases and potentially even circumvent or streamline future insolvency proceedings. Blockchain is not here just to make life simpler, richer, more global or more fun – though it can do all of those well – but to increase the integrity level of our interactions. If that most perplexing and troubling of financial realities, liquidation, can be performed in an automated manner in accordance with unmovable and predetermined criteria in line with relevant law, that is a triumph for integrity. Read the whole thing | 