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Comparison between Avalanche, Cosmos and Polkadot

Comparison between Avalanche, Cosmos and Polkadot
Reposting after was mistakenly removed by mods (since resolved - Thanks)
A frequent question I see being asked is how Cosmos, Polkadot and Avalanche compare? Whilst there are similarities there are also a lot of differences. This article is not intended to be an extensive in-depth list, but rather an overview based on some of the criteria that I feel are most important.
For better formatting see https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b
https://preview.redd.it/e8s7dj3ivpq51.png?width=428&format=png&auto=webp&s=5d0463462702637118c7527ebf96e91f4a80b290

Overview

Cosmos

Cosmos is a heterogeneous network of many independent parallel blockchains, each powered by classical BFT consensus algorithms like Tendermint. Developers can easily build custom application specific blockchains, called Zones, through the Cosmos SDK framework. These Zones connect to Hubs, which are specifically designed to connect zones together.
The vision of Cosmos is to have thousands of Zones and Hubs that are Interoperable through the Inter-Blockchain Communication Protocol (IBC). Cosmos can also connect to other systems through peg zones, which are specifically designed zones that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. Cosmos does not use Sharding with each Zone and Hub being sovereign with their own validator set.
For a more in-depth look at Cosmos and provide more reference to points made in this article, please see my three part series — Part One, Part Two, Part Three
(There's a youtube video with a quick video overview of Cosmos on the medium article - https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b)

Polkadot

Polkadot is a heterogeneous blockchain protocol that connects multiple specialised blockchains into one unified network. It achieves scalability through a sharding infrastructure with multiple blockchains running in parallel, called parachains, that connect to a central chain called the Relay Chain. Developers can easily build custom application specific parachains through the Substrate development framework.
The relay chain validates the state transition of connected parachains, providing shared state across the entire ecosystem. If the Relay Chain must revert for any reason, then all of the parachains would also revert. This is to ensure that the validity of the entire system can persist, and no individual part is corruptible. The shared state makes it so that the trust assumptions when using parachains are only those of the Relay Chain validator set, and no other. Interoperability is enabled between parachains through Cross-Chain Message Passing (XCMP) protocol and is also possible to connect to other systems through bridges, which are specifically designed parachains or parathreads that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. The hope is to have 100 parachains connect to the relay chain.
For a more in-depth look at Polkadot and provide more reference to points made in this article, please see my three part series — Part One, Part Two, Part Three
(There's a youtube video with a quick video overview of Polkadot on the medium article - https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b)

Avalanche

Avalanche is a platform of platforms, ultimately consisting of thousands of subnets to form a heterogeneous interoperable network of many blockchains, that takes advantage of the revolutionary Avalanche Consensus protocols to provide a secure, globally distributed, interoperable and trustless framework offering unprecedented decentralisation whilst being able to comply with regulatory requirements.
Avalanche allows anyone to create their own tailor-made application specific blockchains, supporting multiple custom virtual machines such as EVM and WASM and written in popular languages like Go (with others coming in the future) rather than lightly used, poorly-understood languages like Solidity. This virtual machine can then be deployed on a custom blockchain network, called a subnet, which consist of a dynamic set of validators working together to achieve consensus on the state of a set of many blockchains where complex rulesets can be configured to meet regulatory compliance.
Avalanche was built with serving financial markets in mind. It has native support for easily creating and trading digital smart assets with complex custom rule sets that define how the asset is handled and traded to ensure regulatory compliance can be met. Interoperability is enabled between blockchains within a subnet as well as between subnets. Like Cosmos and Polkadot, Avalanche is also able to connect to other systems through bridges, through custom virtual machines made to interact with another ecosystem such as Ethereum and Bitcoin.
For a more in-depth look at Avalanche and provide more reference to points made in this article, please see here and here
(There's a youtube video with a quick video overview of Avalanche on the medium article - https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b)

Comparison between Cosmos, Polkadot and Avalanche

A frequent question I see being asked is how Cosmos, Polkadot and Avalanche compare? Whilst there are similarities there are also a lot of differences. This article is not intended to be an extensive in-depth list, but rather an overview based on some of the criteria that I feel are most important. For a more in-depth view I recommend reading the articles for each of the projects linked above and coming to your own conclusions. I want to stress that it’s not a case of one platform being the killer of all other platforms, far from it. There won’t be one platform to rule them all, and too often the tribalism has plagued this space. Blockchains are going to completely revolutionise most industries and have a profound effect on the world we know today. It’s still very early in this space with most adoption limited to speculation and trading mainly due to the limitations of Blockchain and current iteration of Ethereum, which all three of these platforms hope to address. For those who just want a quick summary see the image at the bottom of the article. With that said let’s have a look

Scalability

Cosmos

Each Zone and Hub in Cosmos is capable of up to around 1000 transactions per second with bandwidth being the bottleneck in consensus. Cosmos aims to have thousands of Zones and Hubs all connected through IBC. There is no limit on the number of Zones / Hubs that can be created

Polkadot

Parachains in Polkadot are also capable of up to around 1500 transactions per second. A portion of the parachain slots on the Relay Chain will be designated as part of the parathread pool, the performance of a parachain is split between many parathreads offering lower performance and compete amongst themselves in a per-block auction to have their transactions included in the next relay chain block. The number of parachains is limited by the number of validators on the relay chain, they hope to be able to achieve 100 parachains.

Avalanche

Avalanche is capable of around 4500 transactions per second per subnet, this is based on modest hardware requirements to ensure maximum decentralisation of just 2 CPU cores and 4 GB of Memory and with a validator size of over 2,000 nodes. Performance is CPU-bound and if higher performance is required then more specialised subnets can be created with higher minimum requirements to be able to achieve 10,000 tps+ in a subnet. Avalanche aims to have thousands of subnets (each with multiple virtual machines / blockchains) all interoperable with each other. There is no limit on the number of Subnets that can be created.

Results

All three platforms offer vastly superior performance to the likes of Bitcoin and Ethereum 1.0. Avalanche with its higher transactions per second, no limit on the number of subnets / blockchains that can be created and the consensus can scale to potentially millions of validators all participating in consensus scores ✅✅✅. Polkadot claims to offer more tps than cosmos, but is limited to the number of parachains (around 100) whereas with Cosmos there is no limit on the number of hubs / zones that can be created. Cosmos is limited to a fairly small validator size of around 200 before performance degrades whereas Polkadot hopes to be able to reach 1000 validators in the relay chain (albeit only a small number of validators are assigned to each parachain). Thus Cosmos and Polkadot scores ✅✅
https://preview.redd.it/2o0brllyvpq51.png?width=1000&format=png&auto=webp&s=8f62bb696ecaafcf6184da005d5fe0129d504518

Decentralisation

Cosmos

Tendermint consensus is limited to around 200 validators before performance starts to degrade. Whilst there is the Cosmos Hub it is one of many hubs in the network and there is no central hub or limit on the number of zones / hubs that can be created.

Polkadot

Polkadot has 1000 validators in the relay chain and these are split up into a small number that validate each parachain (minimum of 14). The relay chain is a central point of failure as all parachains connect to it and the number of parachains is limited depending on the number of validators (they hope to achieve 100 parachains). Due to the limited number of parachain slots available, significant sums of DOT will need to be purchased to win an auction to lease the slot for up to 24 months at a time. Thus likely to lead to only those with enough funds to secure a parachain slot. Parathreads are however an alternative for those that require less and more varied performance for those that can’t secure a parachain slot.

Avalanche

Avalanche consensus scan scale to tens of thousands of validators, even potentially millions of validators all participating in consensus through repeated sub-sampling. The more validators, the faster the network becomes as the load is split between them. There are modest hardware requirements so anyone can run a node and there is no limit on the number of subnets / virtual machines that can be created.

Results

Avalanche offers unparalleled decentralisation using its revolutionary consensus protocols that can scale to millions of validators all participating in consensus at the same time. There is no limit to the number of subnets and virtual machines that can be created, and they can be created by anyone for a small fee, it scores ✅✅✅. Cosmos is limited to 200 validators but no limit on the number of zones / hubs that can be created, which anyone can create and scores ✅✅. Polkadot hopes to accommodate 1000 validators in the relay chain (albeit these are split amongst each of the parachains). The number of parachains is limited and maybe cost prohibitive for many and the relay chain is a ultimately a single point of failure. Whilst definitely not saying it’s centralised and it is more decentralised than many others, just in comparison between the three, it scores ✅
https://preview.redd.it/ckfamee0wpq51.png?width=1000&format=png&auto=webp&s=c4355f145d821fabf7785e238dbc96a5f5ce2846

Latency

Cosmos

Tendermint consensus used in Cosmos reaches finality within 6 seconds. Cosmos consists of many Zones and Hubs that connect to each other. Communication between 2 zones could pass through many hubs along the way, thus also can contribute to latency times depending on the path taken as explained in part two of the articles on Cosmos. It doesn’t need to wait for an extended period of time with risk of rollbacks.

Polkadot

Polkadot provides a Hybrid consensus protocol consisting of Block producing protocol, BABE, and then a finality gadget called GRANDPA that works to agree on a chain, out of many possible forks, by following some simpler fork choice rule. Rather than voting on every block, instead it reaches agreements on chains. As soon as more than 2/3 of validators attest to a chain containing a certain block, all blocks leading up to that one are finalized at once.
If an invalid block is detected after it has been finalised then the relay chain would need to be reverted along with every parachain. This is particularly important when connecting to external blockchains as those don’t share the state of the relay chain and thus can’t be rolled back. The longer the time period, the more secure the network is, as there is more time for additional checks to be performed and reported but at the expense of finality. Finality is reached within 60 seconds between parachains but for external ecosystems like Ethereum their state obviously can’t be rolled back like a parachain and so finality will need to be much longer (60 minutes was suggested in the whitepaper) and discussed in more detail in part three

Avalanche

Avalanche consensus achieves finality within 3 seconds, with most happening sub 1 second, immutable and completely irreversible. Any subnet can connect directly to another without having to go through multiple hops and any VM can talk to another VM within the same subnet as well as external subnets. It doesn’t need to wait for an extended period of time with risk of rollbacks.

Results

With regards to performance far too much emphasis is just put on tps as a metric, the other equally important metric, if not more important with regards to finance is latency. Throughput measures the amount of data at any given time that it can handle whereas latency is the amount of time it takes to perform an action. It’s pointless saying you can process more transactions per second than VISA when it takes 60 seconds for a transaction to complete. Low latency also greatly increases general usability and customer satisfaction, nowadays everyone expects card payments, online payments to happen instantly. Avalanche achieves the best results scoring ✅✅✅, Cosmos with comes in second with 6 second finality ✅✅ and Polkadot with 60 second finality (which may be 60 minutes for external blockchains) scores ✅
https://preview.redd.it/kzup5x42wpq51.png?width=1000&format=png&auto=webp&s=320eb4c25dc4fc0f443a7a2f7ff09567871648cd

Shared Security

Cosmos

Every Zone and Hub in Cosmos has their own validator set and different trust assumptions. Cosmos are researching a shared security model where a Hub can validate the state of connected zones for a fee but not released yet. Once available this will make shared security optional rather than mandatory.

Polkadot

Shared Security is mandatory with Polkadot which uses a Shared State infrastructure between the Relay Chain and all of the connected parachains. If the Relay Chain must revert for any reason, then all of the parachains would also revert. Every parachain makes the same trust assumptions, and as such the relay chain validates state transition and enables seamless interoperability between them. In return for this benefit, they have to purchase DOT and win an auction for one of the available parachain slots.
However, parachains can’t just rely on the relay chain for their security, they will also need to implement censorship resistance measures and utilise proof of work / proof of stake for each parachain as well as discussed in part three, thus parachains can’t just rely on the security of the relay chain, they need to ensure sybil resistance mechanisms using POW and POS are implemented on the parachain as well.

Avalanche

A subnet in Avalanche consists of a dynamic set of validators working together to achieve consensus on the state of a set of many blockchains where complex rulesets can be configured to meet regulatory compliance. So unlike in Cosmos where each zone / hub has their own validators, A subnet can validate a single or many virtual machines / blockchains with a single validator set. Shared security is optional

Results

Shared security is mandatory in polkadot and a key design decision in its infrastructure. The relay chain validates the state transition of all connected parachains and thus scores ✅✅✅. Subnets in Avalanche can validate state of either a single or many virtual machines. Each subnet can have their own token and shares a validator set, where complex rulesets can be configured to meet regulatory compliance. It scores ✅ ✅. Every Zone and Hub in cosmos has their own validator set / token but research is underway to have the hub validate the state transition of connected zones, but as this is still early in the research phase scores ✅ for now.
https://preview.redd.it/pbgyk3o3wpq51.png?width=1000&format=png&auto=webp&s=61c18e12932a250f5633c40633810d0f64520575

Current Adoption

Cosmos

The Cosmos project started in 2016 with an ICO held in April 2017. There are currently around 50 projects building on the Cosmos SDK with a full list can be seen here and filtering for Cosmos SDK . Not all of the projects will necessarily connect using native cosmos sdk and IBC and some have forked parts of the Cosmos SDK and utilise the tendermint consensus such as Binance Chain but have said they will connect in the future.

Polkadot

The Polkadot project started in 2016 with an ICO held in October 2017. There are currently around 70 projects building on Substrate and a full list can be seen here and filtering for Substrate Based. Like with Cosmos not all projects built using substrate will necessarily connect to Polkadot and parachains or parathreads aren’t currently implemented in either the Live or Test network (Kusama) as of the time of this writing.

Avalanche

Avalanche in comparison started much later with Ava Labs being founded in 2018. Avalanche held it’s ICO in July 2020. Due to lot shorter time it has been in development, the number of projects confirmed are smaller with around 14 projects currently building on Avalanche. Due to the customisability of the platform though, many virtual machines can be used within a subnet making the process incredibly easy to port projects over. As an example, it will launch with the Ethereum Virtual Machine which enables byte for byte compatibility and all the tooling like Metamask, Truffle etc. will work, so projects can easily move over to benefit from the performance, decentralisation and low gas fees offered. In the future Cosmos and Substrate virtual machines could be implemented on Avalanche.

Results

Whilst it’s still early for all 3 projects (and the entire blockchain space as a whole), there is currently more projects confirmed to be building on Cosmos and Polkadot, mostly due to their longer time in development. Whilst Cosmos has fewer projects, zones are implemented compared to Polkadot which doesn’t currently have parachains. IBC to connect zones and hubs together is due to launch Q2 2021, thus both score ✅✅✅. Avalanche has been in development for a lot shorter time period, but is launching with an impressive feature set right from the start with ability to create subnets, VMs, assets, NFTs, permissioned and permissionless blockchains, cross chain atomic swaps within a subnet, smart contracts, bridge to Ethereum etc. Applications can easily port over from other platforms and use all the existing tooling such as Metamask / Truffle etc but benefit from the performance, decentralisation and low gas fees offered. Currently though just based on the number of projects in comparison it scores ✅.
https://preview.redd.it/4zpi6s85wpq51.png?width=1000&format=png&auto=webp&s=e91ade1a86a5d50f4976f3b23a46e9287b08e373

Enterprise Adoption

Cosmos

Cosmos enables permissioned and permissionless zones which can connect to each other with the ability to have full control over who validates the blockchain. For permissionless zones each zone / hub can have their own token and they are in control who validates.

Polkadot

With polkadot the state transition is performed by a small randomly selected assigned group of validators from the relay chain plus with the possibility that state is rolled back if an invalid transaction of any of the other parachains is found. This may pose a problem for enterprises that need complete control over who performs validation for regulatory reasons. In addition due to the limited number of parachain slots available Enterprises would have to acquire and lock up large amounts of a highly volatile asset (DOT) and have the possibility that they are outbid in future auctions and find they no longer can have their parachain validated and parathreads don’t provide the guaranteed performance requirements for the application to function.

Avalanche

Avalanche enables permissioned and permissionless subnets and complex rulesets can be configured to meet regulatory compliance. For example a subnet can be created where its mandatory that all validators are from a certain legal jurisdiction, or they hold a specific license and regulated by the SEC etc. Subnets are also able to scale to tens of thousands of validators, and even potentially millions of nodes, all participating in consensus so every enterprise can run their own node rather than only a small amount. Enterprises don’t have to hold large amounts of a highly volatile asset, but instead pay a fee in AVAX for the creation of the subnets and blockchains which is burnt.

Results

Avalanche provides the customisability to run private permissioned blockchains as well as permissionless where the enterprise is in control over who validates the blockchain, with the ability to use complex rulesets to meet regulatory compliance, thus scores ✅✅✅. Cosmos is also able to run permissioned and permissionless zones / hubs so enterprises have full control over who validates a blockchain and scores ✅✅. Polkadot requires locking up large amounts of a highly volatile asset with the possibility of being outbid by competitors and being unable to run the application if the guaranteed performance is required and having to migrate away. The relay chain validates the state transition and can roll back the parachain should an invalid block be detected on another parachain, thus scores ✅.
https://preview.redd.it/li5jy6u6wpq51.png?width=1000&format=png&auto=webp&s=e2a95f1f88e5efbcf9e23c789ae0f002c8eb73fc

Interoperability

Cosmos

Cosmos will connect Hubs and Zones together through its IBC protocol (due to release in Q1 2020). Connecting to blockchains outside of the Cosmos ecosystem would either require the connected blockchain to fork their code to implement IBC or more likely a custom “Peg Zone” will be created specific to work with a particular blockchain it’s trying to bridge to such as Ethereum etc. Each Zone and Hub has different trust levels and connectivity between 2 zones can have different trust depending on which path it takes (this is discussed more in this article). Finality time is low at 6 seconds, but depending on the number of hops, this can increase significantly.

Polkadot

Polkadot’s shared state means each parachain that connects shares the same trust assumptions, of the relay chain validators and that if one blockchain needs to be reverted, all of them will need to be reverted. Interoperability is enabled between parachains through Cross-Chain Message Passing (XCMP) protocol and is also possible to connect to other systems through bridges, which are specifically designed parachains or parathreads that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. Finality time between parachains is around 60 seconds, but longer will be needed (initial figures of 60 minutes in the whitepaper) for connecting to external blockchains. Thus limiting the appeal of connecting two external ecosystems together through Polkadot. Polkadot is also limited in the number of Parachain slots available, thus limiting the amount of blockchains that can be bridged. Parathreads could be used for lower performance bridges, but the speed of future blockchains is only going to increase.

Avalanche

A subnet can validate multiple virtual machines / blockchains and all blockchains within a subnet share the same trust assumptions / validator set, enabling cross chain interoperability. Interoperability is also possible between any other subnet, with the hope Avalanche will consist of thousands of subnets. Each subnet may have a different trust level, but as the primary network consists of all validators then this can be used as a source of trust if required. As Avalanche supports many virtual machines, bridges to other ecosystems are created by running the connected virtual machine. There will be an Ethereum bridge using the EVM shortly after mainnet. Finality time is much faster at sub 3 seconds (with most happening under 1 second) with no chance of rolling back so more appealing when connecting to external blockchains.

Results

All 3 systems are able to perform interoperability within their ecosystem and transfer assets as well as data, as well as use bridges to connect to external blockchains. Cosmos has different trust levels between its zones and hubs and can create issues depending on which path it takes and additional latency added. Polkadot provides the same trust assumptions for all connected parachains but has long finality and limited number of parachain slots available. Avalanche provides the same trust assumptions for all blockchains within a subnet, and different trust levels between subnets. However due to the primary network consisting of all validators it can be used for trust. Avalanche also has a much faster finality time with no limitation on the number of blockchains / subnets / bridges that can be created. Overall all three blockchains excel with interoperability within their ecosystem and each score ✅✅.
https://preview.redd.it/ai0bkbq8wpq51.png?width=1000&format=png&auto=webp&s=3e85ee6a3c4670f388ccea00b0c906c3fb51e415

Tokenomics

Cosmos

The ATOM token is the native token for the Cosmos Hub. It is commonly mistaken by people that think it’s the token used throughout the cosmos ecosystem, whereas it’s just used for one of many hubs in Cosmos, each with their own token. Currently ATOM has little utility as IBC isn’t released and has no connections to other zones / hubs. Once IBC is released zones may prefer to connect to a different hub instead and so ATOM is not used. ATOM isn’t a fixed capped supply token and supply will continuously increase with a yearly inflation of around 10% depending on the % staked. The current market cap for ATOM as of the time of this writing is $1 Billion with 203 million circulating supply. Rewards can be earnt through staking to offset the dilution caused by inflation. Delegators can also get slashed and lose a portion of their ATOM should the validator misbehave.

Polkadot

Polkadot’s native token is DOT and it’s used to secure the Relay Chain. Each parachain needs to acquire sufficient DOT to win an auction on an available parachain lease period of up to 24 months at a time. Parathreads have a fixed fee for registration that would realistically be much lower than the cost of acquiring a parachain slot and compete with other parathreads in a per-block auction to have their transactions included in the next relay chain block. DOT isn’t a fixed capped supply token and supply will continuously increase with a yearly inflation of around 10% depending on the % staked. The current market cap for DOT as of the time of this writing is $4.4 Billion with 852 million circulating supply. Delegators can also get slashed and lose their DOT (potentially 100% of their DOT for serious attacks) should the validator misbehave.

Avalanche

AVAX is the native token for the primary network in Avalanche. Every validator of any subnet also has to validate the primary network and stake a minimum of 2000 AVAX. There is no limit to the number of validators like other consensus methods then this can cater for tens of thousands even potentially millions of validators. As every validator validates the primary network, this can be a source of trust for interoperability between subnets as well as connecting to other ecosystems, thus increasing amount of transaction fees of AVAX. There is no slashing in Avalanche, so there is no risk to lose your AVAX when selecting a validator, instead rewards earnt for staking can be slashed should the validator misbehave. Because Avalanche doesn’t have direct slashing, it is technically possible for someone to both stake AND deliver tokens for something like a flash loan, under the invariant that all tokens that are staked are returned, thus being able to make profit with staked tokens outside of staking itself.
There will also be a separate subnet for Athereum which is a ‘spoon,’ or friendly fork, of Ethereum, which benefits from the Avalanche consensus protocol and applications in the Ethereum ecosystem. It’s native token ATH will be airdropped to ETH holders as well as potentially AVAX holders as well. This can be done for other blockchains as well.
Transaction fees on the primary network for all 3 of the blockchains as well as subscription fees for creating a subnet and blockchain are paid in AVAX and are burnt, creating deflationary pressure. AVAX is a fixed capped supply of 720 million tokens, creating scarcity rather than an unlimited supply which continuously increase of tokens at a compounded rate each year like others. Initially there will be 360 tokens minted at Mainnet with vesting periods between 1 and 10 years, with tokens gradually unlocking each quarter. The Circulating supply is 24.5 million AVAX with tokens gradually released each quater. The current market cap of AVAX is around $100 million.

Results

Avalanche’s AVAX with its fixed capped supply, deflationary pressure, very strong utility, potential to receive air drops and low market cap, means it scores ✅✅✅. Polkadot’s DOT also has very strong utility with the need for auctions to acquire parachain slots, but has no deflationary mechanisms, no fixed capped supply and already valued at $3.8 billion, therefore scores ✅✅. Cosmos’s ATOM token is only for the Cosmos Hub, of which there will be many hubs in the ecosystem and has very little utility currently. (this may improve once IBC is released and if Cosmos hub actually becomes the hub that people want to connect to and not something like Binance instead. There is no fixed capped supply and currently valued at $1.1 Billion, so scores ✅.
https://preview.redd.it/mels7myawpq51.png?width=1000&format=png&auto=webp&s=df9782e2c0a4c26b61e462746256bdf83b1fb906
All three are excellent projects and have similarities as well as many differences. Just to reiterate this article is not intended to be an extensive in-depth list, but rather an overview based on some of the criteria that I feel are most important. For a more in-depth view I recommend reading the articles for each of the projects linked above and coming to your own conclusions, you may have different criteria which is important to you, and score them differently. There won’t be one platform to rule them all however, with some uses cases better suited to one platform over another, and it’s not a zero-sum game. Blockchain is going to completely revolutionize industries and the Internet itself. The more projects researching and delivering breakthrough technology the better, each learning from each other and pushing each other to reach that goal earlier. The current market is a tiny speck of what’s in store in terms of value and adoption and it’s going to be exciting to watch it unfold.
https://preview.redd.it/dbb99egcwpq51.png?width=1388&format=png&auto=webp&s=aeb03127dc0dc74d0507328e899db1c7d7fc2879
For more information see the articles below (each with additional sources at the bottom of their articles)
Avalanche, a Revolutionary Consensus Engine and Platform. A Game Changer for Blockchain
Avalanche Consensus, The Biggest Breakthrough since Nakamoto
Cosmos — An Early In-Depth Analysis — Part One
Cosmos — An Early In-Depth Analysis — Part Two
Cosmos Hub ATOM Token and the commonly misunderstood staking tokens — Part Three
Polkadot — An Early In-Depth Analysis — Part One — Overview and Benefits
Polkadot — An Early In-Depth Analysis — Part Two — How Consensus Works
Polkadot — An Early In-Depth Analysis — Part Three — Limitations and Issues
submitted by xSeq22x to CryptoCurrency [link] [comments]

Stakenet (XSN) - A DEX with interchain capabilities (BTC-ETH), Huge Potential [Full Writeup]

Preface
Full disclosure here; I am heavily invested in this. I have picked up some real gems from here and was only in the position to buy so much of this because of you guys so I thought it was time to give back. I only invest in Utility Coins. These are coins that actually DO something, and provide new/build upon the crypto infrastructure to work towards the end goal that Bitcoin itself set out to achieve(financial independence from the fiat banking system). This way, I avoid 99% of the scams in crypto that are functionless vapourware, and if you only invest in things that have strong fundamentals in the long term you are much more likely to make money.
Introduction
Stakenet is a Lightning Network-ready open-source platform for decentralized applications with its native cryptocurrency – XSN. It is powered by a Proof of Stake blockchain with trustless cold staking and Masternodes. Its use case is to provide a highly secure cross-chain infrastructure for these decentralized applications, where individuals can easily operate with any blockchain simply by using Stakenet and its native currency XSN.
Ok... but what does it actually do and solve?
The moonshot here is the DEX (Decentralised Exchange) that they are building. This is a lightning-network DEX with interchain capabilities. That means you could trade BTC directly for ETH; securely, instantly, cheaply and privately.
Right now, most crypto is traded to and from Centralised Exchanges like Binance. To buy and sell on these exchanges, you have to send your crypto wallets on that exchange. That means the exchanges have your private keys, and they have control over your funds. When you use a centralised exchange, you are no longer in control of your assets, and depend on the trustworthiness of middlemen. We have in the past of course seen infamous exit scams by centralised exchanges like Mt. Gox.
The alternative? Decentralised Exchanges. DEX's have no central authority and most importantly, your private keys(your crypto) never leavesYOUR possession and are never in anyone else's possession. So you can trade peer-to-peer without any of the drawbacks of Centralised Exchanges.
The problem is that this technology has not been perfected yet, and the DEX's that we have available to us now are not providing cheap, private, quick trading on a decentralised medium because of their technological inadequacies. Take Uniswap for example. This DEX accounts for over 60% of all DEX volume and facilitates trading of ERC-20 tokens, over the Ethereum blockchain. The problem? Because of the huge amount of transaction that are occurring over the Ethereum network, this has lead to congestion(too many transaction for the network to handle at one time) so the fees have increased dramatically. Another big problem? It's only for Ethereum. You cant for example, Buy LINK with BTC. You must use ETH.
The solution? Layer 2 protocols. These are layers built ON TOP of existing blockchains, that are designed to solve the transaction and scaling difficulties that crypto as a whole is facing today(and ultimately stopping mass adoption) The developers at Stakenet have seen the big picture, and have decided to implement the lightning network(a layer 2 protocol) into its DEX from the ground up. This will facilitate the functionalities of a DEX without any of the drawbacks of the CEX's and the DEX's we have today.
Heres someone much more qualified than me, Andreas Antonopoulos, to explain this
https://streamable.com/kzpimj
'Once we have efficient, well designed DEX's on layer 2, there wont even be any DEX's on layer 1'
Progress
The Stakenet team were the first to envision this grand solution and have been working on it since its conception in June 2019. They have been making steady progress ever since and right now, the DEX is in an open beta stage where rigorous testing is constant by themselves and the public. For a project of this scale, stress testing is paramount. If the product were to launch with any bugs/errors that would result in the loss of a users funds, this would obviously be very damaging to Stakenet's reputation. So I believe that the developers conservative approach is wise.
As of now the only pairs tradeable on the DEX are XSN/BTC and LTC/BTC. The DEX has only just launched as a public beta and is not in its full public release stage yet. As development moves forward more lightning network and atomic swap compatible coins will be added to the DEX, and of course, the team are hard at work on Raiden Integration - this will allow ETH and tokens on the Ethereum blockchain to be traded on the DEX between separate blockchains(instantly, cheaply, privately) This is where Stakenet enters top 50 territory on CMC if successful and is the true value here. Raiden Integration is well underway is being tested in a closed public group on Linux.
The full public DEX with Raiden Integration is expected to release by the end of the year. Given the state of development so far and the rate of progress, this seems realistic.
Tokenomics
2.6 Metrics overview (from whitepaper)
XSN is slightly inflationary, much like ETH as this is necessary for the economy to be adopted and work in the long term. There is however a deflationary mechanism in place - all trading fees on the DEX get converted to XSN and 10% of these fees are burned. This puts constant buying pressure on XSN and acts as a deflationary mechanism. XSN has inherent value because it makes up the infrastructure that the DEX will run off and as such Masternode operators and Stakers will see the fee's from the DEX.
Conclusion
We can clearly see that a layer 2 DEX is the future of crypto currency trading. It will facilitate secure, cheap, instant and private trading across all coins with lightning capabilities, thus solving the scaling and transaction issues that are holding back crypto today. I dont need to tell you the implications of this, and what it means for crypto as a whole. If Stakenet can launch a layer 2 DEX with Raiden Integration, It will become the primary DEX in terms of volume.
Stakenet DEX will most likely be the first layer 2 DEX(first mover advantage) and its blockchain is the infrastructure that will host this DEX and subsequently receive it's trading fee's. It is not difficult to envision a time in the next year when Stakenet DEX is functional and hosting hundreds of millions of dollars worth of trading every single day.
At $30 million market cap, I cant see any other potential investment right now with this much potential upside.
This post has merely served as in introduction and a heads up for this project, there is MUCH more to cover like vortex liquidity, masternodes, TOR integration... for now, here is some additional reading. Resources
TLDR; No. Do you want to make money? I'd start with learning how to read.
submitted by hotprocession to CryptoMoonShots [link] [comments]

[ CryptoCurrency ] Comparison between Avalanche, Cosmos and Polkadot

[ 🔴 DELETED 🔴 ] Topic originally posted in CryptoCurrency by xSeq22x [link]
A frequent question I see being asked is how Cosmos, Polkadot and Avalanche compare? Whilst there are similarities there are also a lot of differences. This article is not intended to be an extensive in-depth list, but rather an overview based on some of the criteria that I feel are most important.
For better formatting see https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b
https://preview.redd.it/lg16iwk2dhq51.png?width=428&format=png&auto=webp&s=6c899ee69800dd6c5e2900d8fa83de7a43c57086

Overview

Cosmos

Cosmos is a heterogeneous network of many independent parallel blockchains, each powered by classical BFT consensus algorithms like Tendermint. Developers can easily build custom application specific blockchains, called Zones, through the Cosmos SDK framework. These Zones connect to Hubs, which are specifically designed to connect zones together.
The vision of Cosmos is to have thousands of Zones and Hubs that are Interoperable through the Inter-Blockchain Communication Protocol (IBC). Cosmos can also connect to other systems through peg zones, which are specifically designed zones that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. Cosmos does not use Sharding with each Zone and Hub being sovereign with their own validator set.
For a more in-depth look at Cosmos and provide more reference to points made in this article, please see my three part series — Part One, Part Two, Part Three
https://youtu.be/Eb8xkDi_PUg

Polkadot

Polkadot is a heterogeneous blockchain protocol that connects multiple specialised blockchains into one unified network. It achieves scalability through a sharding infrastructure with multiple blockchains running in parallel, called parachains, that connect to a central chain called the Relay Chain. Developers can easily build custom application specific parachains through the Substrate development framework.
The relay chain validates the state transition of connected parachains, providing shared state across the entire ecosystem. If the Relay Chain must revert for any reason, then all of the parachains would also revert. This is to ensure that the validity of the entire system can persist, and no individual part is corruptible. The shared state makes it so that the trust assumptions when using parachains are only those of the Relay Chain validator set, and no other. Interoperability is enabled between parachains through Cross-Chain Message Passing (XCMP) protocol and is also possible to connect to other systems through bridges, which are specifically designed parachains or parathreads that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. The hope is to have 100 parachains connect to the relay chain.
For a more in-depth look at Polkadot and provide more reference to points made in this article, please see my three part series — Part One, Part Two, Part Three
https://youtu.be/_-k0xkooSlA

Avalanche

Avalanche is a platform of platforms, ultimately consisting of thousands of subnets to form a heterogeneous interoperable network of many blockchains, that takes advantage of the revolutionary Avalanche Consensus protocols to provide a secure, globally distributed, interoperable and trustless framework offering unprecedented decentralisation whilst being able to comply with regulatory requirements.
Avalanche allows anyone to create their own tailor-made application specific blockchains, supporting multiple custom virtual machines such as EVM and WASM and written in popular languages like Go (with others coming in the future) rather than lightly used, poorly-understood languages like Solidity. This virtual machine can then be deployed on a custom blockchain network, called a subnet, which consist of a dynamic set of validators working together to achieve consensus on the state of a set of many blockchains where complex rulesets can be configured to meet regulatory compliance.
Avalanche was built with serving financial markets in mind. It has native support for easily creating and trading digital smart assets with complex custom rule sets that define how the asset is handled and traded to ensure regulatory compliance can be met. Interoperability is enabled between blockchains within a subnet as well as between subnets. Like Cosmos and Polkadot, Avalanche is also able to connect to other systems through bridges, through custom virtual machines made to interact with another ecosystem such as Ethereum and Bitcoin.
For a more in-depth look at Avalanche and provide more reference to points made in this article, please see here and here
https://youtu.be/mWBzFmzzBAg

Comparison between Cosmos, Polkadot and Avalanche

A frequent question I see being asked is how Cosmos, Polkadot and Avalanche compare? Whilst there are similarities there are also a lot of differences. This article is not intended to be an extensive in-depth list, but rather an overview based on some of the criteria that I feel are most important. For a more in-depth view I recommend reading the articles for each of the projects linked above and coming to your own conclusions. I want to stress that it’s not a case of one platform being the killer of all other platforms, far from it. There won’t be one platform to rule them all, and too often the tribalism has plagued this space. Blockchains are going to completely revolutionise most industries and have a profound effect on the world we know today. It’s still very early in this space with most adoption limited to speculation and trading mainly due to the limitations of Blockchain and current iteration of Ethereum, which all three of these platforms hope to address. For those who just want a quick summary see the image at the bottom of the article. With that said let’s have a look

Scalability

Cosmos

Each Zone and Hub in Cosmos is capable of up to around 1000 transactions per second with bandwidth being the bottleneck in consensus. Cosmos aims to have thousands of Zones and Hubs all connected through IBC. There is no limit on the number of Zones / Hubs that can be created

Polkadot

Parachains in Polkadot are also capable of up to around 1500 transactions per second. A portion of the parachain slots on the Relay Chain will be designated as part of the parathread pool, the performance of a parachain is split between many parathreads offering lower performance and compete amongst themselves in a per-block auction to have their transactions included in the next relay chain block. The number of parachains is limited by the number of validators on the relay chain, they hope to be able to achieve 100 parachains.

Avalanche

Avalanche is capable of around 4500 transactions per second per subnet, this is based on modest hardware requirements to ensure maximum decentralisation of just 2 CPU cores and 4 GB of Memory and with a validator size of over 2,000 nodes. Performance is CPU-bound and if higher performance is required then more specialised subnets can be created with higher minimum requirements to be able to achieve 10,000 tps+ in a subnet. Avalanche aims to have thousands of subnets (each with multiple virtual machines / blockchains) all interoperable with each other. There is no limit on the number of Subnets that can be created.

Results

All three platforms offer vastly superior performance to the likes of Bitcoin and Ethereum 1.0. Avalanche with its higher transactions per second, no limit on the number of subnets / blockchains that can be created and the consensus can scale to potentially millions of validators all participating in consensus scores ✅✅✅. Polkadot claims to offer more tps than cosmos, but is limited to the number of parachains (around 100) whereas with Cosmos there is no limit on the number of hubs / zones that can be created. Cosmos is limited to a fairly small validator size of around 200 before performance degrades whereas Polkadot hopes to be able to reach 1000 validators in the relay chain (albeit only a small number of validators are assigned to each parachain). Thus Cosmos and Polkadot scores ✅✅
https://preview.redd.it/ththwq5qdhq51.png?width=1000&format=png&auto=webp&s=92f75152c90d984911db88ed174ebf3a147ca70d

Decentralisation

Cosmos

Tendermint consensus is limited to around 200 validators before performance starts to degrade. Whilst there is the Cosmos Hub it is one of many hubs in the network and there is no central hub or limit on the number of zones / hubs that can be created.

Polkadot

Polkadot has 1000 validators in the relay chain and these are split up into a small number that validate each parachain (minimum of 14). The relay chain is a central point of failure as all parachains connect to it and the number of parachains is limited depending on the number of validators (they hope to achieve 100 parachains). Due to the limited number of parachain slots available, significant sums of DOT will need to be purchased to win an auction to lease the slot for up to 24 months at a time. Thus likely to lead to only those with enough funds to secure a parachain slot. Parathreads are however an alternative for those that require less and more varied performance for those that can’t secure a parachain slot.

Avalanche

Avalanche consensus scan scale to tens of thousands of validators, even potentially millions of validators all participating in consensus through repeated sub-sampling. The more validators, the faster the network becomes as the load is split between them. There are modest hardware requirements so anyone can run a node and there is no limit on the number of subnets / virtual machines that can be created.

Results

Avalanche offers unparalleled decentralisation using its revolutionary consensus protocols that can scale to millions of validators all participating in consensus at the same time. There is no limit to the number of subnets and virtual machines that can be created, and they can be created by anyone for a small fee, it scores ✅✅✅. Cosmos is limited to 200 validators but no limit on the number of zones / hubs that can be created, which anyone can create and scores ✅✅. Polkadot hopes to accommodate 1000 validators in the relay chain (albeit these are split amongst each of the parachains). The number of parachains is limited and maybe cost prohibitive for many and the relay chain is a ultimately a single point of failure. Whilst definitely not saying it’s centralised and it is more decentralised than many others, just in comparison between the three, it scores ✅
https://preview.redd.it/lv2h7g9sdhq51.png?width=1000&format=png&auto=webp&s=56eada6e8c72dbb4406d7c5377ad15608bcc730e

Latency

Cosmos

Tendermint consensus used in Cosmos reaches finality within 6 seconds. Cosmos consists of many Zones and Hubs that connect to each other. Communication between 2 zones could pass through many hubs along the way, thus also can contribute to latency times depending on the path taken as explained in part two of the articles on Cosmos. It doesn’t need to wait for an extended period of time with risk of rollbacks.

Polkadot

Polkadot provides a Hybrid consensus protocol consisting of Block producing protocol, BABE, and then a finality gadget called GRANDPA that works to agree on a chain, out of many possible forks, by following some simpler fork choice rule. Rather than voting on every block, instead it reaches agreements on chains. As soon as more than 2/3 of validators attest to a chain containing a certain block, all blocks leading up to that one are finalized at once.
If an invalid block is detected after it has been finalised then the relay chain would need to be reverted along with every parachain. This is particularly important when connecting to external blockchains as those don’t share the state of the relay chain and thus can’t be rolled back. The longer the time period, the more secure the network is, as there is more time for additional checks to be performed and reported but at the expense of finality. Finality is reached within 60 seconds between parachains but for external ecosystems like Ethereum their state obviously can’t be rolled back like a parachain and so finality will need to be much longer (60 minutes was suggested in the whitepaper) and discussed in more detail in part three

Avalanche

Avalanche consensus achieves finality within 3 seconds, with most happening sub 1 second, immutable and completely irreversible. Any subnet can connect directly to another without having to go through multiple hops and any VM can talk to another VM within the same subnet as well as external subnets. It doesn’t need to wait for an extended period of time with risk of rollbacks.

Results

With regards to performance far too much emphasis is just put on tps as a metric, the other equally important metric, if not more important with regards to finance is latency. Throughput measures the amount of data at any given time that it can handle whereas latency is the amount of time it takes to perform an action. It’s pointless saying you can process more transactions per second than VISA when it takes 60 seconds for a transaction to complete. Low latency also greatly increases general usability and customer satisfaction, nowadays everyone expects card payments, online payments to happen instantly. Avalanche achieves the best results scoring ✅✅✅, Cosmos with comes in second with 6 second finality ✅✅ and Polkadot with 60 second finality (which may be 60 minutes for external blockchains) scores ✅
https://preview.redd.it/qe8e5ltudhq51.png?width=1000&format=png&auto=webp&s=18a2866104590f81a818690337f9121161dda890

Shared Security

Cosmos

Every Zone and Hub in Cosmos has their own validator set and different trust assumptions. Cosmos are researching a shared security model where a Hub can validate the state of connected zones for a fee but not released yet. Once available this will make shared security optional rather than mandatory.

Polkadot

Shared Security is mandatory with Polkadot which uses a Shared State infrastructure between the Relay Chain and all of the connected parachains. If the Relay Chain must revert for any reason, then all of the parachains would also revert. Every parachain makes the same trust assumptions, and as such the relay chain validates state transition and enables seamless interoperability between them. In return for this benefit, they have to purchase DOT and win an auction for one of the available parachain slots.
However, parachains can’t just rely on the relay chain for their security, they will also need to implement censorship resistance measures and utilise proof of work / proof of stake for each parachain as well as discussed in part three, thus parachains can’t just rely on the security of the relay chain, they need to ensure sybil resistance mechanisms using POW and POS are implemented on the parachain as well.

Avalanche

A subnet in Avalanche consists of a dynamic set of validators working together to achieve consensus on the state of a set of many blockchains where complex rulesets can be configured to meet regulatory compliance. So unlike in Cosmos where each zone / hub has their own validators, A subnet can validate a single or many virtual machines / blockchains with a single validator set. Shared security is optional

Results

Shared security is mandatory in polkadot and a key design decision in its infrastructure. The relay chain validates the state transition of all connected parachains and thus scores ✅✅✅. Subnets in Avalanche can validate state of either a single or many virtual machines. Each subnet can have their own token and shares a validator set, where complex rulesets can be configured to meet regulatory compliance. It scores ✅ ✅. Every Zone and Hub in cosmos has their own validator set / token but research is underway to have the hub validate the state transition of connected zones, but as this is still early in the research phase scores ✅ for now.
https://preview.redd.it/0mnvpnzwdhq51.png?width=1000&format=png&auto=webp&s=8927ff2821415817265be75c59261f83851a2791

Current Adoption

Cosmos

The Cosmos project started in 2016 with an ICO held in April 2017. There are currently around 50 projects building on the Cosmos SDK with a full list can be seen here and filtering for Cosmos SDK . Not all of the projects will necessarily connect using native cosmos sdk and IBC and some have forked parts of the Cosmos SDK and utilise the tendermint consensus such as Binance Chain but have said they will connect in the future.

Polkadot

The Polkadot project started in 2016 with an ICO held in October 2017. There are currently around 70 projects building on Substrate and a full list can be seen here and filtering for Substrate Based. Like with Cosmos not all projects built using substrate will necessarily connect to Polkadot and parachains or parathreads aren’t currently implemented in either the Live or Test network (Kusama) as of the time of this writing.

Avalanche

Avalanche in comparison started much later with Ava Labs being founded in 2018. Avalanche held it’s ICO in July 2020. Due to lot shorter time it has been in development, the number of projects confirmed are smaller with around 14 projects currently building on Avalanche. Due to the customisability of the platform though, many virtual machines can be used within a subnet making the process incredibly easy to port projects over. As an example, it will launch with the Ethereum Virtual Machine which enables byte for byte compatibility and all the tooling like Metamask, Truffle etc. will work, so projects can easily move over to benefit from the performance, decentralisation and low gas fees offered. In the future Cosmos and Substrate virtual machines could be implemented on Avalanche.

Results

Whilst it’s still early for all 3 projects (and the entire blockchain space as a whole), there is currently more projects confirmed to be building on Cosmos and Polkadot, mostly due to their longer time in development. Whilst Cosmos has fewer projects, zones are implemented compared to Polkadot which doesn’t currently have parachains. IBC to connect zones and hubs together is due to launch Q2 2021, thus both score ✅✅✅. Avalanche has been in development for a lot shorter time period, but is launching with an impressive feature set right from the start with ability to create subnets, VMs, assets, NFTs, permissioned and permissionless blockchains, cross chain atomic swaps within a subnet, smart contracts, bridge to Ethereum etc. Applications can easily port over from other platforms and use all the existing tooling such as Metamask / Truffle etc but benefit from the performance, decentralisation and low gas fees offered. Currently though just based on the number of projects in comparison it scores ✅.
https://preview.redd.it/rsctxi6zdhq51.png?width=1000&format=png&auto=webp&s=ff762dea3cfc2aaaa3c8fc7b1070d5be6759aac2

Enterprise Adoption

Cosmos

Cosmos enables permissioned and permissionless zones which can connect to each other with the ability to have full control over who validates the blockchain. For permissionless zones each zone / hub can have their own token and they are in control who validates.

Polkadot

With polkadot the state transition is performed by a small randomly selected assigned group of validators from the relay chain plus with the possibility that state is rolled back if an invalid transaction of any of the other parachains is found. This may pose a problem for enterprises that need complete control over who performs validation for regulatory reasons. In addition due to the limited number of parachain slots available Enterprises would have to acquire and lock up large amounts of a highly volatile asset (DOT) and have the possibility that they are outbid in future auctions and find they no longer can have their parachain validated and parathreads don’t provide the guaranteed performance requirements for the application to function.

Avalanche

Avalanche enables permissioned and permissionless subnets and complex rulesets can be configured to meet regulatory compliance. For example a subnet can be created where its mandatory that all validators are from a certain legal jurisdiction, or they hold a specific license and regulated by the SEC etc. Subnets are also able to scale to tens of thousands of validators, and even potentially millions of nodes, all participating in consensus so every enterprise can run their own node rather than only a small amount. Enterprises don’t have to hold large amounts of a highly volatile asset, but instead pay a fee in AVAX for the creation of the subnets and blockchains which is burnt.

Results

Avalanche provides the customisability to run private permissioned blockchains as well as permissionless where the enterprise is in control over who validates the blockchain, with the ability to use complex rulesets to meet regulatory compliance, thus scores ✅✅✅. Cosmos is also able to run permissioned and permissionless zones / hubs so enterprises have full control over who validates a blockchain and scores ✅✅. Polkadot requires locking up large amounts of a highly volatile asset with the possibility of being outbid by competitors and being unable to run the application if the guaranteed performance is required and having to migrate away. The relay chain validates the state transition and can roll back the parachain should an invalid block be detected on another parachain, thus scores ✅.
https://preview.redd.it/7phaylb1ehq51.png?width=1000&format=png&auto=webp&s=d86d2ec49de456403edbaf27009ed0e25609fbff

Interoperability

Cosmos

Cosmos will connect Hubs and Zones together through its IBC protocol (due to release in Q1 2020). Connecting to blockchains outside of the Cosmos ecosystem would either require the connected blockchain to fork their code to implement IBC or more likely a custom “Peg Zone” will be created specific to work with a particular blockchain it’s trying to bridge to such as Ethereum etc. Each Zone and Hub has different trust levels and connectivity between 2 zones can have different trust depending on which path it takes (this is discussed more in this article). Finality time is low at 6 seconds, but depending on the number of hops, this can increase significantly.

Polkadot

Polkadot’s shared state means each parachain that connects shares the same trust assumptions, of the relay chain validators and that if one blockchain needs to be reverted, all of them will need to be reverted. Interoperability is enabled between parachains through Cross-Chain Message Passing (XCMP) protocol and is also possible to connect to other systems through bridges, which are specifically designed parachains or parathreads that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. Finality time between parachains is around 60 seconds, but longer will be needed (initial figures of 60 minutes in the whitepaper) for connecting to external blockchains. Thus limiting the appeal of connecting two external ecosystems together through Polkadot. Polkadot is also limited in the number of Parachain slots available, thus limiting the amount of blockchains that can be bridged. Parathreads could be used for lower performance bridges, but the speed of future blockchains is only going to increase.

Avalanche

A subnet can validate multiple virtual machines / blockchains and all blockchains within a subnet share the same trust assumptions / validator set, enabling cross chain interoperability. Interoperability is also possible between any other subnet, with the hope Avalanche will consist of thousands of subnets. Each subnet may have a different trust level, but as the primary network consists of all validators then this can be used as a source of trust if required. As Avalanche supports many virtual machines, bridges to other ecosystems are created by running the connected virtual machine. There will be an Ethereum bridge using the EVM shortly after mainnet. Finality time is much faster at sub 3 seconds (with most happening under 1 second) with no chance of rolling back so more appealing when connecting to external blockchains.

Results

All 3 systems are able to perform interoperability within their ecosystem and transfer assets as well as data, as well as use bridges to connect to external blockchains. Cosmos has different trust levels between its zones and hubs and can create issues depending on which path it takes and additional latency added. Polkadot provides the same trust assumptions for all connected parachains but has long finality and limited number of parachain slots available. Avalanche provides the same trust assumptions for all blockchains within a subnet, and different trust levels between subnets. However due to the primary network consisting of all validators it can be used for trust. Avalanche also has a much faster finality time with no limitation on the number of blockchains / subnets / bridges that can be created. Overall all three blockchains excel with interoperability within their ecosystem and each score ✅✅.
https://preview.redd.it/l775gue3ehq51.png?width=1000&format=png&auto=webp&s=b7c4b5802ceb1a9307bd2a8d65f393d1bcb0d7c6

Tokenomics

Cosmos

The ATOM token is the native token for the Cosmos Hub. It is commonly mistaken by people that think it’s the token used throughout the cosmos ecosystem, whereas it’s just used for one of many hubs in Cosmos, each with their own token. Currently ATOM has little utility as IBC isn’t released and has no connections to other zones / hubs. Once IBC is released zones may prefer to connect to a different hub instead and so ATOM is not used. ATOM isn’t a fixed capped supply token and supply will continuously increase with a yearly inflation of around 10% depending on the % staked. The current market cap for ATOM as of the time of this writing is $1 Billion with 203 million circulating supply. Rewards can be earnt through staking to offset the dilution caused by inflation. Delegators can also get slashed and lose a portion of their ATOM should the validator misbehave.

Polkadot

Polkadot’s native token is DOT and it’s used to secure the Relay Chain. Each parachain needs to acquire sufficient DOT to win an auction on an available parachain lease period of up to 24 months at a time. Parathreads have a fixed fee for registration that would realistically be much lower than the cost of acquiring a parachain slot and compete with other parathreads in a per-block auction to have their transactions included in the next relay chain block. DOT isn’t a fixed capped supply token and supply will continuously increase with a yearly inflation of around 10% depending on the % staked. The current market cap for DOT as of the time of this writing is $4.4 Billion with 852 million circulating supply. Delegators can also get slashed and lose their DOT (potentially 100% of their DOT for serious attacks) should the validator misbehave.

Avalanche

AVAX is the native token for the primary network in Avalanche. Every validator of any subnet also has to validate the primary network and stake a minimum of 2000 AVAX. There is no limit to the number of validators like other consensus methods then this can cater for tens of thousands even potentially millions of validators. As every validator validates the primary network, this can be a source of trust for interoperability between subnets as well as connecting to other ecosystems, thus increasing amount of transaction fees of AVAX. There is no slashing in Avalanche, so there is no risk to lose your AVAX when selecting a validator, instead rewards earnt for staking can be slashed should the validator misbehave. Because Avalanche doesn’t have direct slashing, it is technically possible for someone to both stake AND deliver tokens for something like a flash loan, under the invariant that all tokens that are staked are returned, thus being able to make profit with staked tokens outside of staking itself.
There will also be a separate subnet for Athereum which is a ‘spoon,’ or friendly fork, of Ethereum, which benefits from the Avalanche consensus protocol and applications in the Ethereum ecosystem. It’s native token ATH will be airdropped to ETH holders as well as potentially AVAX holders as well. This can be done for other blockchains as well.
Transaction fees on the primary network for all 3 of the blockchains as well as subscription fees for creating a subnet and blockchain are paid in AVAX and are burnt, creating deflationary pressure. AVAX is a fixed capped supply of 720 million tokens, creating scarcity rather than an unlimited supply which continuously increase of tokens at a compounded rate each year like others. Initially there will be 360 tokens minted at Mainnet with vesting periods between 1 and 10 years, with tokens gradually unlocking each quarter. The Circulating supply is 24.5 million AVAX with tokens gradually released each quater. The current market cap of AVAX is around $100 million.

Results

Avalanche’s AVAX with its fixed capped supply, deflationary pressure, very strong utility, potential to receive air drops and low market cap, means it scores ✅✅✅. Polkadot’s DOT also has very strong utility with the need for auctions to acquire parachain slots, but has no deflationary mechanisms, no fixed capped supply and already valued at $3.8 billion, therefore scores ✅✅. Cosmos’s ATOM token is only for the Cosmos Hub, of which there will be many hubs in the ecosystem and has very little utility currently. (this may improve once IBC is released and if Cosmos hub actually becomes the hub that people want to connect to and not something like Binance instead. There is no fixed capped supply and currently valued at $1.1 Billion, so scores ✅.
https://preview.redd.it/zb72eto5ehq51.png?width=1000&format=png&auto=webp&s=0ee102a2881d763296ad9ffba20667f531d2fd7a
All three are excellent projects and have similarities as well as many differences. Just to reiterate this article is not intended to be an extensive in-depth list, but rather an overview based on some of the criteria that I feel are most important. For a more in-depth view I recommend reading the articles for each of the projects linked above and coming to your own conclusions, you may have different criteria which is important to you, and score them differently. There won’t be one platform to rule them all however, with some uses cases better suited to one platform over another, and it’s not a zero-sum game. Blockchain is going to completely revolutionize industries and the Internet itself. The more projects researching and delivering breakthrough technology the better, each learning from each other and pushing each other to reach that goal earlier. The current market is a tiny speck of what’s in store in terms of value and adoption and it’s going to be exciting to watch it unfold.
https://preview.redd.it/fwi3clz7ehq51.png?width=1388&format=png&auto=webp&s=c91c1645a4c67defd5fc3aaec84f4a765e1c50b6
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Why i’m bullish on Zilliqa (long read)

Edit: TL;DR added in the comments
 
Hey all, I've been researching coins since 2017 and have gone through 100s of them in the last 3 years. I got introduced to blockchain via Bitcoin of course, analyzed Ethereum thereafter and from that moment I have a keen interest in smart contact platforms. I’m passionate about Ethereum but I find Zilliqa to have a better risk-reward ratio. Especially because Zilliqa has found an elegant balance between being secure, decentralized and scalable in my opinion.
 
Below I post my analysis of why from all the coins I went through I’m most bullish on Zilliqa (yes I went through Tezos, EOS, NEO, VeChain, Harmony, Algorand, Cardano etc.). Note that this is not investment advice and although it's a thorough analysis there is obviously some bias involved. Looking forward to what you all think!
 
Fun fact: the name Zilliqa is a play on ‘silica’ silicon dioxide which means “Silicon for the high-throughput consensus computer.”
 
This post is divided into (i) Technology, (ii) Business & Partnerships, and (iii) Marketing & Community. I’ve tried to make the technology part readable for a broad audience. If you’ve ever tried understanding the inner workings of Bitcoin and Ethereum you should be able to grasp most parts. Otherwise, just skim through and once you are zoning out head to the next part.
 
Technology and some more:
 
Introduction
 
The technology is one of the main reasons why I’m so bullish on Zilliqa. First thing you see on their website is: “Zilliqa is a high-performance, high-security blockchain platform for enterprises and next-generation applications.” These are some bold statements.
 
Before we deep dive into the technology let’s take a step back in time first as they have quite the history. The initial research paper from which Zilliqa originated dates back to August 2016: Elastico: A Secure Sharding Protocol For Open Blockchains where Loi Luu (Kyber Network) is one of the co-authors. Other ideas that led to the development of what Zilliqa has become today are: Bitcoin-NG, collective signing CoSi, ByzCoin and Omniledger.
 
The technical white paper was made public in August 2017 and since then they have achieved everything stated in the white paper and also created their own open source intermediate level smart contract language called Scilla (functional programming language similar to OCaml) too.
 
Mainnet is live since the end of January 2019 with daily transaction rates growing continuously. About a week ago mainnet reached 5 million transactions, 500.000+ addresses in total along with 2400 nodes keeping the network decentralized and secure. Circulating supply is nearing 11 billion and currently only mining rewards are left. The maximum supply is 21 billion with annual inflation being 7.13% currently and will only decrease with time.
 
Zilliqa realized early on that the usage of public cryptocurrencies and smart contracts were increasing but decentralized, secure, and scalable alternatives were lacking in the crypto space. They proposed to apply sharding onto a public smart contract blockchain where the transaction rate increases almost linear with the increase in the amount of nodes. More nodes = higher transaction throughput and increased decentralization. Sharding comes in many forms and Zilliqa uses network-, transaction- and computational sharding. Network sharding opens up the possibility of using transaction- and computational sharding on top. Zilliqa does not use state sharding for now. We’ll come back to this later.
 
Before we continue dissecting how Zilliqa achieves such from a technological standpoint it’s good to keep in mind that a blockchain being decentralised and secure and scalable is still one of the main hurdles in allowing widespread usage of decentralised networks. In my opinion this needs to be solved first before blockchains can get to the point where they can create and add large scale value. So I invite you to read the next section to grasp the underlying fundamentals. Because after all these premises need to be true otherwise there isn’t a fundamental case to be bullish on Zilliqa, right?
 
Down the rabbit hole
 
How have they achieved this? Let’s define the basics first: key players on Zilliqa are the users and the miners. A user is anybody who uses the blockchain to transfer funds or run smart contracts. Miners are the (shard) nodes in the network who run the consensus protocol and get rewarded for their service in Zillings (ZIL). The mining network is divided into several smaller networks called shards, which is also referred to as ‘network sharding’. Miners subsequently are randomly assigned to a shard by another set of miners called DS (Directory Service) nodes. The regular shards process transactions and the outputs of these shards are eventually combined by the DS shard as they reach consensus on the final state. More on how these DS shards reach consensus (via pBFT) will be explained later on.
 
The Zilliqa network produces two types of blocks: DS blocks and Tx blocks. One DS Block consists of 100 Tx Blocks. And as previously mentioned there are two types of nodes concerned with reaching consensus: shard nodes and DS nodes. Becoming a shard node or DS node is being defined by the result of a PoW cycle (Ethash) at the beginning of the DS Block. All candidate mining nodes compete with each other and run the PoW (Proof-of-Work) cycle for 60 seconds and the submissions achieving the highest difficulty will be allowed on the network. And to put it in perspective: the average difficulty for one DS node is ~ 2 Th/s equaling 2.000.000 Mh/s or 55 thousand+ GeForce GTX 1070 / 8 GB GPUs at 35.4 Mh/s. Each DS Block 10 new DS nodes are allowed. And a shard node needs to provide around 8.53 GH/s currently (around 240 GTX 1070s). Dual mining ETH/ETC and ZIL is possible and can be done via mining software such as Phoenix and Claymore. There are pools and if you have large amounts of hashing power (Ethash) available you could mine solo.
 
The PoW cycle of 60 seconds is a peak performance and acts as an entry ticket to the network. The entry ticket is called a sybil resistance mechanism and makes it incredibly hard for adversaries to spawn lots of identities and manipulate the network with these identities. And after every 100 Tx Blocks which corresponds to roughly 1,5 hour this PoW process repeats. In between these 1,5 hour, no PoW needs to be done meaning Zilliqa’s energy consumption to keep the network secure is low. For more detailed information on how mining works click here.
Okay, hats off to you. You have made it this far. Before we go any deeper down the rabbit hole we first must understand why Zilliqa goes through all of the above technicalities and understand a bit more what a blockchain on a more fundamental level is. Because the core of Zilliqa’s consensus protocol relies on the usage of pBFT (practical Byzantine Fault Tolerance) we need to know more about state machines and their function. Navigate to Viewblock, a Zilliqa block explorer, and just come back to this article. We will use this site to navigate through a few concepts.
 
We have established that Zilliqa is a public and distributed blockchain. Meaning that everyone with an internet connection can send ZILs, trigger smart contracts, etc. and there is no central authority who fully controls the network. Zilliqa and other public and distributed blockchains (like Bitcoin and Ethereum) can also be defined as state machines.
 
Taking the liberty of paraphrasing examples and definitions given by Samuel Brooks’ medium article, he describes the definition of a blockchain (like Zilliqa) as: “A peer-to-peer, append-only datastore that uses consensus to synchronize cryptographically-secure data”.
 
Next, he states that: "blockchains are fundamentally systems for managing valid state transitions”. For some more context, I recommend reading the whole medium article to get a better grasp of the definitions and understanding of state machines. Nevertheless, let’s try to simplify and compile it into a single paragraph. Take traffic lights as an example: all its states (red, amber, and green) are predefined, all possible outcomes are known and it doesn’t matter if you encounter the traffic light today or tomorrow. It will still behave the same. Managing the states of a traffic light can be done by triggering a sensor on the road or pushing a button resulting in one traffic lights’ state going from green to red (via amber) and another light from red to green.
 
With public blockchains like Zilliqa, this isn’t so straightforward and simple. It started with block #1 almost 1,5 years ago and every 45 seconds or so a new block linked to the previous block is being added. Resulting in a chain of blocks with transactions in it that everyone can verify from block #1 to the current #647.000+ block. The state is ever changing and the states it can find itself in are infinite. And while the traffic light might work together in tandem with various other traffic lights, it’s rather insignificant comparing it to a public blockchain. Because Zilliqa consists of 2400 nodes who need to work together to achieve consensus on what the latest valid state is while some of these nodes may have latency or broadcast issues, drop offline or are deliberately trying to attack the network, etc.
 
Now go back to the Viewblock page take a look at the amount of transaction, addresses, block and DS height and then hit refresh. Obviously as expected you see new incremented values on one or all parameters. And how did the Zilliqa blockchain manage to transition from a previous valid state to the latest valid state? By using pBFT to reach consensus on the latest valid state.
 
After having obtained the entry ticket, miners execute pBFT to reach consensus on the ever-changing state of the blockchain. pBFT requires a series of network communication between nodes, and as such there is no GPU involved (but CPU). Resulting in the total energy consumed to keep the blockchain secure, decentralized and scalable being low.
 
pBFT stands for practical Byzantine Fault Tolerance and is an optimization on the Byzantine Fault Tolerant algorithm. To quote Blockonomi: “In the context of distributed systems, Byzantine Fault Tolerance is the ability of a distributed computer network to function as desired and correctly reach a sufficient consensus despite malicious components (nodes) of the system failing or propagating incorrect information to other peers.” Zilliqa is such a distributed computer network and depends on the honesty of the nodes (shard and DS) to reach consensus and to continuously update the state with the latest block. If pBFT is a new term for you I can highly recommend the Blockonomi article.
 
The idea of pBFT was introduced in 1999 - one of the authors even won a Turing award for it - and it is well researched and applied in various blockchains and distributed systems nowadays. If you want more advanced information than the Blockonomi link provides click here. And if you’re in between Blockonomi and the University of Singapore read the Zilliqa Design Story Part 2 dating from October 2017.
Quoting from the Zilliqa tech whitepaper: “pBFT relies upon a correct leader (which is randomly selected) to begin each phase and proceed when the sufficient majority exists. In case the leader is byzantine it can stall the entire consensus protocol. To address this challenge, pBFT offers a view change protocol to replace the byzantine leader with another one.”
 
pBFT can tolerate ⅓ of the nodes being dishonest (offline counts as Byzantine = dishonest) and the consensus protocol will function without stalling or hiccups. Once there are more than ⅓ of dishonest nodes but no more than ⅔ the network will be stalled and a view change will be triggered to elect a new DS leader. Only when more than ⅔ of the nodes are dishonest (66%) double-spend attacks become possible.
 
If the network stalls no transactions can be processed and one has to wait until a new honest leader has been elected. When the mainnet was just launched and in its early phases, view changes happened regularly. As of today the last stalling of the network - and view change being triggered - was at the end of October 2019.
 
Another benefit of using pBFT for consensus besides low energy is the immediate finality it provides. Once your transaction is included in a block and the block is added to the chain it’s done. Lastly, take a look at this article where three types of finality are being defined: probabilistic, absolute and economic finality. Zilliqa falls under the absolute finality (just like Tendermint for example). Although lengthy already we skipped through some of the inner workings from Zilliqa’s consensus: read the Zilliqa Design Story Part 3 and you will be close to having a complete picture on it. Enough about PoW, sybil resistance mechanism, pBFT, etc. Another thing we haven’t looked at yet is the amount of decentralization.
 
Decentralisation
 
Currently, there are four shards, each one of them consisting of 600 nodes. 1 shard with 600 so-called DS nodes (Directory Service - they need to achieve a higher difficulty than shard nodes) and 1800 shard nodes of which 250 are shard guards (centralized nodes controlled by the team). The amount of shard guards has been steadily declining from 1200 in January 2019 to 250 as of May 2020. On the Viewblock statistics, you can see that many of the nodes are being located in the US but those are only the (CPU parts of the) shard nodes who perform pBFT. There is no data from where the PoW sources are coming. And when the Zilliqa blockchain starts reaching its transaction capacity limit, a network upgrade needs to be executed to lift the current cap of maximum 2400 nodes to allow more nodes and formation of more shards which will allow to network to keep on scaling according to demand.
Besides shard nodes there are also seed nodes. The main role of seed nodes is to serve as direct access points (for end-users and clients) to the core Zilliqa network that validates transactions. Seed nodes consolidate transaction requests and forward these to the lookup nodes (another type of nodes) for distribution to the shards in the network. Seed nodes also maintain the entire transaction history and the global state of the blockchain which is needed to provide services such as block explorers. Seed nodes in the Zilliqa network are comparable to Infura on Ethereum.
 
The seed nodes were first only operated by Zilliqa themselves, exchanges and Viewblock. Operators of seed nodes like exchanges had no incentive to open them for the greater public. They were centralised at first. Decentralisation at the seed nodes level has been steadily rolled out since March 2020 ( Zilliqa Improvement Proposal 3 ). Currently the amount of seed nodes is being increased, they are public-facing and at the same time PoS is applied to incentivize seed node operators and make it possible for ZIL holders to stake and earn passive yields. Important distinction: seed nodes are not involved with consensus! That is still PoW as entry ticket and pBFT for the actual consensus.
 
5% of the block rewards are being assigned to seed nodes (from the beginning in 2019) and those are being used to pay out ZIL stakers. The 5% block rewards with an annual yield of 10.03% translate to roughly 610 MM ZILs in total that can be staked. Exchanges use the custodial variant of staking and wallets like Moonlet will use the non-custodial version (starting in Q3 2020). Staking is being done by sending ZILs to a smart contract created by Zilliqa and audited by Quantstamp.
 
With a high amount of DS; shard nodes and seed nodes becoming more decentralized too, Zilliqa qualifies for the label of decentralized in my opinion.
 
Smart contracts
 
Let me start by saying I’m not a developer and my programming skills are quite limited. So I‘m taking the ELI5 route (maybe 12) but if you are familiar with Javascript, Solidity or specifically OCaml please head straight to Scilla - read the docs to get a good initial grasp of how Zilliqa’s smart contract language Scilla works and if you ask yourself “why another programming language?” check this article. And if you want to play around with some sample contracts in an IDE click here. The faucet can be found here. And more information on architecture, dapp development and API can be found on the Developer Portal.
If you are more into listening and watching: check this recent webinar explaining Zilliqa and Scilla. Link is time-stamped so you’ll start right away with a platform introduction, roadmap 2020 and afterwards a proper Scilla introduction.
 
Generalized: programming languages can be divided into being ‘object-oriented’ or ‘functional’. Here is an ELI5 given by software development academy: * “all programs have two basic components, data – what the program knows – and behavior – what the program can do with that data. So object-oriented programming states that combining data and related behaviors in one place, is called “object”, which makes it easier to understand how a particular program works. On the other hand, functional programming argues that data and behavior are different things and should be separated to ensure their clarity.” *
 
Scilla is on the functional side and shares similarities with OCaml: OCaml is a general-purpose programming language with an emphasis on expressiveness and safety. It has an advanced type system that helps catch your mistakes without getting in your way. It's used in environments where a single mistake can cost millions and speed matters, is supported by an active community, and has a rich set of libraries and development tools. For all its power, OCaml is also pretty simple, which is one reason it's often used as a teaching language.
 
Scilla is blockchain agnostic, can be implemented onto other blockchains as well, is recognized by academics and won a so-called Distinguished Artifact Award award at the end of last year.
 
One of the reasons why the Zilliqa team decided to create their own programming language focused on preventing smart contract vulnerabilities is that adding logic on a blockchain, programming, means that you cannot afford to make mistakes. Otherwise, it could cost you. It’s all great and fun blockchains being immutable but updating your code because you found a bug isn’t the same as with a regular web application for example. And with smart contracts, it inherently involves cryptocurrencies in some form thus value.
 
Another difference with programming languages on a blockchain is gas. Every transaction you do on a smart contract platform like Zilliqa or Ethereum costs gas. With gas you basically pay for computational costs. Sending a ZIL from address A to address B costs 0.001 ZIL currently. Smart contracts are more complex, often involve various functions and require more gas (if gas is a new concept click here ).
 
So with Scilla, similar to Solidity, you need to make sure that “every function in your smart contract will run as expected without hitting gas limits. An improper resource analysis may lead to situations where funds may get stuck simply because a part of the smart contract code cannot be executed due to gas limits. Such constraints are not present in traditional software systems”. Scilla design story part 1
 
Some examples of smart contract issues you’d want to avoid are: leaking funds, ‘unexpected changes to critical state variables’ (example: someone other than you setting his or her address as the owner of the smart contract after creation) or simply killing a contract.
 
Scilla also allows for formal verification. Wikipedia to the rescue: In the context of hardware and software systems, formal verification is the act of proving or disproving the correctness of intended algorithms underlying a system with respect to a certain formal specification or property, using formal methods of mathematics.
 
Formal verification can be helpful in proving the correctness of systems such as: cryptographic protocols, combinational circuits, digital circuits with internal memory, and software expressed as source code.
 
Scilla is being developed hand-in-hand with formalization of its semantics and its embedding into the Coq proof assistant — a state-of-the art tool for mechanized proofs about properties of programs.”
 
Simply put, with Scilla and accompanying tooling developers can be mathematically sure and proof that the smart contract they’ve written does what he or she intends it to do.
 
Smart contract on a sharded environment and state sharding
 
There is one more topic I’d like to touch on: smart contract execution in a sharded environment (and what is the effect of state sharding). This is a complex topic. I’m not able to explain it any easier than what is posted here. But I will try to compress the post into something easy to digest.
 
Earlier on we have established that Zilliqa can process transactions in parallel due to network sharding. This is where the linear scalability comes from. We can define simple transactions: a transaction from address A to B (Category 1), a transaction where a user interacts with one smart contract (Category 2) and the most complex ones where triggering a transaction results in multiple smart contracts being involved (Category 3). The shards are able to process transactions on their own without interference of the other shards. With Category 1 transactions that is doable, with Category 2 transactions sometimes if that address is in the same shard as the smart contract but with Category 3 you definitely need communication between the shards. Solving that requires to make a set of communication rules the protocol needs to follow in order to process all transactions in a generalised fashion.
 
And this is where the downsides of state sharding comes in currently. All shards in Zilliqa have access to the complete state. Yes the state size (0.1 GB at the moment) grows and all of the nodes need to store it but it also means that they don’t need to shop around for information available on other shards. Requiring more communication and adding more complexity. Computer science knowledge and/or developer knowledge required links if you want to dig further: Scilla - language grammar Scilla - Foundations for Verifiable Decentralised Computations on a Blockchain Gas Accounting NUS x Zilliqa: Smart contract language workshop
 
Easier to follow links on programming Scilla https://learnscilla.com/home Ivan on Tech
 
Roadmap / Zilliqa 2.0
 
There is no strict defined roadmap but here are topics being worked on. And via the Zilliqa website there is also more information on the projects they are working on.
 
Business & Partnerships
 
It’s not only technology in which Zilliqa seems to be excelling as their ecosystem has been expanding and starting to grow rapidly. The project is on a mission to provide OpenFinance (OpFi) to the world and Singapore is the right place to be due to its progressive regulations and futuristic thinking. Singapore has taken a proactive approach towards cryptocurrencies by introducing the Payment Services Act 2019 (PS Act). Among other things, the PS Act will regulate intermediaries dealing with certain cryptocurrencies, with a particular focus on consumer protection and anti-money laundering. It will also provide a stable regulatory licensing and operating framework for cryptocurrency entities, effectively covering all crypto businesses and exchanges based in Singapore. According to PWC 82% of the surveyed executives in Singapore reported blockchain initiatives underway and 13% of them have already brought the initiatives live to the market. There is also an increasing list of organizations that are starting to provide digital payment services. Moreover, Singaporean blockchain developers Building Cities Beyond has recently created an innovation $15 million grant to encourage development on its ecosystem. This all suggests that Singapore tries to position itself as (one of) the leading blockchain hubs in the world.
 
Zilliqa seems to already take advantage of this and recently helped launch Hg Exchange on their platform, together with financial institutions PhillipCapital, PrimePartners and Fundnel. Hg Exchange, which is now approved by the Monetary Authority of Singapore (MAS), uses smart contracts to represent digital assets. Through Hg Exchange financial institutions worldwide can use Zilliqa's safe-by-design smart contracts to enable the trading of private equities. For example, think of companies such as Grab, Airbnb, SpaceX that are not available for public trading right now. Hg Exchange will allow investors to buy shares of private companies & unicorns and capture their value before an IPO. Anquan, the main company behind Zilliqa, has also recently announced that they became a partner and shareholder in TEN31 Bank, which is a fully regulated bank allowing for tokenization of assets and is aiming to bridge the gap between conventional banking and the blockchain world. If STOs, the tokenization of assets, and equity trading will continue to increase, then Zilliqa’s public blockchain would be the ideal candidate due to its strategic positioning, partnerships, regulatory compliance and the technology that is being built on top of it.
 
What is also very encouraging is their focus on banking the un(der)banked. They are launching a stablecoin basket starting with XSGD. As many of you know, stablecoins are currently mostly used for trading. However, Zilliqa is actively trying to broaden the use case of stablecoins. I recommend everybody to read this text that Amrit Kumar wrote (one of the co-founders). These stablecoins will be integrated in the traditional markets and bridge the gap between the crypto world and the traditional world. This could potentially revolutionize and legitimise the crypto space if retailers and companies will for example start to use stablecoins for payments or remittances, instead of it solely being used for trading.
 
Zilliqa also released their DeFi strategic roadmap (dating November 2019) which seems to be aligning well with their OpFi strategy. A non-custodial DEX is coming to Zilliqa made by Switcheo which allows cross-chain trading (atomic swaps) between ETH, EOS and ZIL based tokens. They also signed a Memorandum of Understanding for a (soon to be announced) USD stablecoin. And as Zilliqa is all about regulations and being compliant, I’m speculating on it to be a regulated USD stablecoin. Furthermore, XSGD is already created and visible on block explorer and XIDR (Indonesian Stablecoin) is also coming soon via StraitsX. Here also an overview of the Tech Stack for Financial Applications from September 2019. Further quoting Amrit Kumar on this:
 
There are two basic building blocks in DeFi/OpFi though: 1) stablecoins as you need a non-volatile currency to get access to this market and 2) a dex to be able to trade all these financial assets. The rest are built on top of these blocks.
 
So far, together with our partners and community, we have worked on developing these building blocks with XSGD as a stablecoin. We are working on bringing a USD-backed stablecoin as well. We will soon have a decentralised exchange developed by Switcheo. And with HGX going live, we are also venturing into the tokenization space. More to come in the future.”
 
Additionally, they also have this ZILHive initiative that injects capital into projects. There have been already 6 waves of various teams working on infrastructure, innovation and research, and they are not from ASEAN or Singapore only but global: see Grantees breakdown by country. Over 60 project teams from over 20 countries have contributed to Zilliqa's ecosystem. This includes individuals and teams developing wallets, explorers, developer toolkits, smart contract testing frameworks, dapps, etc. As some of you may know, Unstoppable Domains (UD) blew up when they launched on Zilliqa. UD aims to replace cryptocurrency addresses with a human-readable name and allows for uncensorable websites. Zilliqa will probably be the only one able to handle all these transactions onchain due to ability to scale and its resulting low fees which is why the UD team launched this on Zilliqa in the first place. Furthermore, Zilliqa also has a strong emphasis on security, compliance, and privacy, which is why they partnered with companies like Elliptic, ChainSecurity (part of PwC Switzerland), and Incognito. Their sister company Aqilliz (Zilliqa spelled backwards) focuses on revolutionizing the digital advertising space and is doing interesting things like using Zilliqa to track outdoor digital ads with companies like Foodpanda.
 
Zilliqa is listed on nearly all major exchanges, having several different fiat-gateways and recently have been added to Binance’s margin trading and futures trading with really good volume. They also have a very impressive team with good credentials and experience. They don't just have “tech people”. They have a mix of tech people, business people, marketeers, scientists, and more. Naturally, it's good to have a mix of people with different skill sets if you work in the crypto space.
 
Marketing & Community
 
Zilliqa has a very strong community. If you just follow their Twitter their engagement is much higher for a coin that has approximately 80k followers. They also have been ‘coin of the day’ by LunarCrush many times. LunarCrush tracks real-time cryptocurrency value and social data. According to their data, it seems Zilliqa has a more fundamental and deeper understanding of marketing and community engagement than almost all other coins. While almost all coins have been a bit frozen in the last months, Zilliqa seems to be on its own bull run. It was somewhere in the 100s a few months ago and is currently ranked #46 on CoinGecko. Their official Telegram also has over 20k people and is very active, and their community channel which is over 7k now is more active and larger than many other official channels. Their local communities also seem to be growing.
 
Moreover, their community started ‘Zillacracy’ together with the Zilliqa core team ( see www.zillacracy.com ). It’s a community-run initiative where people from all over the world are now helping with marketing and development on Zilliqa. Since its launch in February 2020 they have been doing a lot and will also run their own non-custodial seed node for staking. This seed node will also allow them to start generating revenue for them to become a self sustaining entity that could potentially scale up to become a decentralized company working in parallel with the Zilliqa core team. Comparing it to all the other smart contract platforms (e.g. Cardano, EOS, Tezos etc.) they don't seem to have started a similar initiative (correct me if I’m wrong though). This suggests in my opinion that these other smart contract platforms do not fully understand how to utilize the ‘power of the community’. This is something you cannot ‘buy with money’ and gives many projects in the space a disadvantage.
 
Zilliqa also released two social products called SocialPay and Zeeves. SocialPay allows users to earn ZILs while tweeting with a specific hashtag. They have recently used it in partnership with the Singapore Red Cross for a marketing campaign after their initial pilot program. It seems like a very valuable social product with a good use case. I can see a lot of traditional companies entering the space through this product, which they seem to suggest will happen. Tokenizing hashtags with smart contracts to get network effect is a very smart and innovative idea.
 
Regarding Zeeves, this is a tipping bot for Telegram. They already have 1000s of signups and they plan to keep upgrading it for more and more people to use it (e.g. they recently have added a quiz features). They also use it during AMAs to reward people in real-time. It’s a very smart approach to grow their communities and get familiar with ZIL. I can see this becoming very big on Telegram. This tool suggests, again, that the Zilliqa team has a deeper understanding of what the crypto space and community needs and is good at finding the right innovative tools to grow and scale.
 
To be honest, I haven’t covered everything (i’m also reaching the character limited haha). So many updates happening lately that it's hard to keep up, such as the International Monetary Fund mentioning Zilliqa in their report, custodial and non-custodial Staking, Binance Margin, Futures, Widget, entering the Indian market, and more. The Head of Marketing Colin Miles has also released this as an overview of what is coming next. And last but not least, Vitalik Buterin has been mentioning Zilliqa lately acknowledging Zilliqa and mentioning that both projects have a lot of room to grow. There is much more info of course and a good part of it has been served to you on a silver platter. I invite you to continue researching by yourself :-) And if you have any comments or questions please post here!
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ETHE & GBTC (Grayscale) Frequently Asked Questions

It is no doubt Grayscale’s booming popularity as a mainstream investment has caused a lot of community hullabaloo lately. As such, I felt it was worth making a FAQ regarding the topic. I’m looking to update this as needed and of course am open to suggestions / adding any questions.
The goal is simply to have a thread we can link to anyone with questions on Grayscale and its products. Instead of explaining the same thing 3 times a day, shoot those posters over to this thread. My hope is that these questions are answered in a fairly simple and easy to understand manner. I think as the sub grows it will be a nice reference point for newcomers.
Disclaimer: I do NOT work for Grayscale and as such am basing all these answers on information that can be found on their website / reports. (Grayscale’s official FAQ can be found here). I also do NOT have a finance degree, I do NOT have a Series 6 / 7 / 140-whatever, and I do NOT work with investment products for my day job. I have an accounting background and work within the finance world so I have the general ‘business’ knowledge to put it all together, but this is all info determined in my best faith effort as a layman. The point being is this --- it is possible I may explain something wrong or missed the technical terms, and if that occurs I am more than happy to update anything that can be proven incorrect
Everything below will be in reference to ETHE but will apply to GBTC as well. If those two segregate in any way, I will note that accordingly.
What is Grayscale? 
Grayscale is the company that created the ETHE product. Their website is https://grayscale.co/
What is ETHE? 
ETHE is essentially a stock that intends to loosely track the price of ETH. It does so by having each ETHE be backed by a specific amount of ETH that is held on chain. Initially, the newly minted ETHE can only be purchased by institutions and accredited investors directly from Grayscale. Once a year has passed (6 months for GBTC) it can then be listed on the OTCQX Best Market exchange for secondary trading. Once listed on OTCQX, anyone investor can purchase at this point. Additional information on ETHE can be found here.
So ETHE is an ETF? 
No. For technical reasons beyond my personal understandings it is not labeled an ETF. I know it all flows back to the “Securities Act Rule 144”, but due to my limited knowledge on SEC regulations I don’t want to misspeak past that. If anyone is more knowledgeable on the subject I am happy to input their answer here.
How long has ETHE existed? 
ETHE was formed 12/14/2017. GBTC was formed 9/25/2013.
How is ETHE created? 
The trust will issue shares to “Authorized Participants” in groups of 100 shares (called baskets). Authorized Participants are the only persons that may place orders to create these baskets and they do it on behalf of the investor.
Source: Creation and Redemption of Shares section on page 39 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
Note – The way their reports word this makes it sound like there is an army of authorizers doing the dirty work, but in reality there is only one Authorized Participant. At this moment the “Genesis” company is the sole Authorized Participant. Genesis is owned by the “Digital Currency Group, Inc.” which is the parent company of Grayscale as well. (And to really go down the rabbit hole it looks like DCG is the parent company of CoinDesk and is “backing 150+ companies across 30 countries, including Coinbase, Ripple, and Chainalysis.”)
Source: Digital Currency Group, Inc. informational section on page 77 of the “Grayscale Bitcoin Trust (BTC) Form 10-K (2019)” – Located Here
Source: Barry E. Silbert informational section on page 75 of the “Grayscale Bitcoin Trust (BTC) Form 10-K (2019)” – Located Here
How does Grayscale acquire the ETH to collateralize the ETHE product? 
An Investor may acquire ETHE by paying in cash or exchanging ETH already owned.
Source: Creation and Redemption of Shares section on page 40 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
Where does Grayscale store their ETH? Does it have a specific wallet address we can follow? 
ETH is stored with Coinbase Custody Trust Company, LLC. I am unaware of any specific address or set of addresses that can be used to verify the ETH is actually there.
As an aside - I would actually love to see if anyone knows more about this as it’s something that’s sort of peaked my interest after being asked about it… I find it doubtful we can find that however.
Source: Part C. Business Information, Item 8, subsection A. on page 16 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
Can ETHE be redeemed for ETH? 
No, currently there is no way to give your shares of ETHE back to Grayscale to receive ETH back. The only method of getting back into ETH would be to sell your ETHE to someone else and then use those proceeds to buy ETH yourself.
Source: Redemption Procedures on page 41 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
Why are they not redeeming shares? 
I think the report summarizes it best:
Redemptions of Shares are currently not permitted and the Trust is unable to redeem Shares. Subject to receipt of regulatory approval from the SEC and approval by the Sponsor in its sole discretion, the Trust may in the future operate a redemption program. Because the Trust does not believe that the SEC would, at this time, entertain an application for the waiver of rules needed in order to operate an ongoing redemption program, the Trust currently has no intention of seeking regulatory approval from the SEC to operate an ongoing redemption program.
Source: Redemption Procedures on page 41 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
What is the fee structure? 
ETHE has an annual fee of 2.5%. GBTC has an annual fee of 2.0%. Fees are paid by selling the underlying ETH / BTC collateralizing the asset.
Source: ETHE’s informational page on Grayscale’s website - Located Here
Source: Description of Trust on page 31 & 32 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
What is the ratio of ETH to ETHE? 
At the time of posting (6/19/2020) each ETHE share is backed by .09391605 ETH. Each share of GBTC is backed by .00096038 BTC.
ETHE & GBTC’s specific information page on Grayscale’s website updates the ratio daily – Located Here
For a full historical look at this ratio, it can be found on the Grayscale home page on the upper right side if you go to Tax Documents > 2019 Tax Documents > Grayscale Ethereum Trust 2019 Tax Letter.
Why is the ratio not 1:1? Why is it always decreasing? 
While I cannot say for certain why the initial distribution was not a 1:1 backing, it is more than likely to keep the price down and allow more investors a chance to purchase ETHE / GBTC.
As noted above, fees are paid by selling off the ETH collateralizing ETHE. So this number will always be trending downward as time goes on.
Source: Description of Trust on page 32 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
I keep hearing about how this is locked supply… explain? 
As noted above, there is currently no redemption program for converting your ETHE back into ETH. This means that once an ETHE is issued, it will remain in circulation until a redemption program is formed --- something that doesn’t seem to be too urgent for the SEC or Grayscale at the moment. Tiny amounts will naturally be removed due to fees, but the bulk of the asset is in there for good.
Knowing that ETHE cannot be taken back and destroyed at this time, the ETH collateralizing it will not be removed from the wallet for the foreseeable future. While it is not fully locked in the sense of say a totally lost key, it is not coming out any time soon.
Per their annual statement:
The Trust’s ETH will be transferred out of the ETH Account only in the following circumstances: (i) transferred to pay the Sponsor’s Fee or any Additional Trust Expenses, (ii) distributed in connection with the redemption of Baskets (subject to the Trust’s obtaining regulatory approval from the SEC to operate an ongoing redemption program and the consent of the Sponsor), (iii) sold on an as-needed basis to pay Additional Trust Expenses or (iv) sold on behalf of the Trust in the event the Trust terminates and liquidates its assets or as otherwise required by law or regulation.
Source: Description of Trust on page 31 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
Grayscale now owns a huge chunk of both ETH and BTC’s supply… should we be worried about manipulation, a sell off to crash the market crash, a staking cartel? 
First, it’s important to remember Grayscale is a lot more akin to an exchange then say an investment firm. Grayscale is working on behalf of its investors to create this product for investor control. Grayscale doesn’t ‘control’ the ETH it holds any more then Coinbase ‘controls’ the ETH in its hot wallet. (Note: There are likely some varying levels of control, but specific to this topic Grayscale cannot simply sell [legally, at least] the ETH by their own decision in the same manner Coinbase wouldn't be able to either.)
That said, there shouldn’t be any worry in the short to medium time-frame. As noted above, Grayscale can’t really remove ETH other than for fees or termination of the product. At 2.5% a year, fees are noise in terms of volume. Grayscale seems to be the fastest growing product in the crypto space at the moment and termination of the product seems unlikely.
IF redemptions were to happen tomorrow, it’s extremely unlikely we would see a mass exodus out of the product to redeem for ETH. And even if there was incentive to get back to ETH, the premium makes it so that it would be much more cost effective to just sell your ETHE on the secondary market and buy ETH yourself. Remember, any redemption is up to the investors and NOT something Grayscale has direct control over.
Yes, but what about [insert criminal act here]… 
Alright, yes. Technically nothing is stopping Grayscale from selling all the ETH / BTC and running off to the Bahamas (Hawaii?). BUT there is no real reason for them to do so. Barry is an extremely public figure and it won’t be easy for him to get away with that. Grayscale’s Bitcoin Trust creates SEC reports weekly / bi-weekly and I’m sure given the sentiment towards crypto is being watched carefully. Plus, Grayscale is making tons of consistent revenue and thus has little to no incentive to give that up for a quick buck.
That’s a lot of ‘happy little feels’ Bob, is there even an independent audit or is this Tether 2.0? 
Actually yes, an independent auditor report can be found in their annual reports. It is clearly aimed more towards the financial side and I doubt the auditors are crypto savants, but it is at least one extra set of eyes. Auditors are Friedman LLP – Auditor since 2015.
Source: Independent Auditor Report starting on page 116 (of the PDF itself) of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
As mentioned by user TheCrpytosAndBloods (In Comments Below), a fun fact:
The company’s auditors Friedman LLP were also coincidentally TetheBitfinex’s auditors until They controversially parted ways in 2018 when the Tether controversy was at its height. I am not suggesting for one moment that there is anything shady about DCG - I just find it interesting it’s the same auditor.
“Grayscale sounds kind of lame” / “Not your keys not your crypto!” / “Why is anyone buying this, it sounds like a scam?” 
Welp, for starters this honestly is not really a product aimed at the people likely to be reading this post. To each their own, but do remember just because something provides no value to you doesn’t mean it can’t provide value to someone else. That said some of the advertised benefits are as follows:
So for example, I can set up an IRA at a brokerage account that has $0 trading fees. Then I can trade GBTC and ETHE all day without having to worry about tracking my taxes. All with the relative safety something like E-Trade provides over Binance.
As for how it benefits the everyday ETH holder? I think the supply lock is a positive. I also think this product exposes the Ethereum ecosystem to people who otherwise wouldn’t know about it.
Why is there a premium? Why is ETHE’s premium so insanely high compared to GBTC’s premium? 
There are a handful of theories of why a premium exists at all, some even mentioned in the annual report. The short list is as follows:
Why is ETHE’s so much higher the GBTC’s? Again, a few thoughts:

Are there any other differences between ETHE and GBTC? 
I touched on a few of the smaller differences, but one of the more interesting changes is GBTC is now a “SEC reporting company” as of January 2020. Which again goes beyond my scope of knowledge so I won’t comment on it too much… but the net result is GBTC is now putting out weekly / bi-weekly 8-K’s and annual 10-K’s. This means you can track GBTC that much easier at the moment as well as there is an extra layer of validity to the product IMO.
I’m looking for some statistics on ETHE… such as who is buying, how much is bought, etc? 
There is a great Q1 2020 report I recommend you give a read that has a lot of cool graphs and data on the product. It’s a little GBTC centric, but there is some ETHE data as well. It can be found here hidden within the 8-K filings.Q1 2020 is the 4/16/2020 8-K filing.
For those more into a GAAP style report see the 2019 annual 10-K of the same location.
Is Grayscale only just for BTC and ETH? 
No, there are other products as well. In terms of a secondary market product, ETCG is the Ethereum Classic version of ETHE. Fun Fact – ETCG was actually put out to the secondary market first. It also has a 3% fee tied to it where 1% of it goes to some type of ETC development fund.
In terms of institutional and accredited investors, there are a few ‘fan favorites’ such as Bitcoin Cash, Litcoin, Stellar, XRP, and Zcash. Something called Horizion (Backed by ZEN I guess? Idk to be honest what that is…). And a diversified Mutual Fund type fund that has a little bit of all of those. None of these products are available on the secondary market.
Are there alternatives to Grayscale? 
I know they exist, but I don’t follow them. I’ll leave this as a “to be edited” section and will add as others comment on what they know.
Per user Over-analyser (in comments below):
Coinshares (Formerly XBT provider) are the only similar product I know of. BTC, ETH, XRP and LTC as Exchange Traded Notes (ETN).
It looks like they are fully backed with the underlying crypto (no premium).
https://coinshares.com/etps/xbt-provideinvestor-resources/daily-hedging-position
Denominated in SEK and EUR. Certainly available in some UK pensions (SIPP).
As asked by pegcity - Okay so I was under the impression you can just give them your own ETH and get ETHE, but do you get 11 ETHE per ETH or do you get the market value of ETH in USD worth of ETHE? 
I have always understood that the ETHE issued directly through Grayscale is issued without the premium. As in, if I were to trade 1 ETH for ETHE I would get 11, not say only 2 or 3 because the secondary market premium is so high. And if I were paying cash only I would be paying the price to buy 1 ETH to get my 11 ETHE. Per page 39 of their annual statement, it reads as follows:
The Trust will issue Shares to Authorized Participants from time to time, but only in one or more Baskets (with a Basket being a block of 100 Shares). The Trust will not issue fractions of a Basket. The creation (and, should the Trust commence a redemption program, redemption) of Baskets will be made only in exchange for the delivery to the Trust, or the distribution by the Trust, of the number of whole and fractional ETH represented by each Basket being created (or, should the Trust commence a redemption program, redeemed), which is determined by dividing (x) the number of ETH owned by the Trust at 4:00 p.m., New York time, on the trade date of a creation or redemption order, after deducting the number of ETH representing the U.S. dollar value of accrued but unpaid fees and expenses of the Trust (converted using the ETH Index Price at such time, and carried to the eighth decimal place), by (y) the number of Shares outstanding at such time (with the quotient so obtained calculated to one one-hundred-millionth of one ETH (i.e., carried to the eighth decimal place)), and multiplying such quotient by 100 (the “Basket ETH Amount”). All questions as to the calculation of the Basket ETH Amount will be conclusively determined by the Sponsor and will be final and binding on all persons interested in the Trust. The Basket ETH Amount multiplied by the number of Baskets being created or redeemed is the “Total Basket ETH Amount.” The number of ETH represented by a Share will gradually decrease over time as the Trust’s ETH are used to pay the Trust’s expenses. Each Share represented approximately 0.0950 ETH and 0.0974 ETH as of December 31, 2019 and 2018, respectively.

submitted by Bob-Rossi to ethfinance [link] [comments]

RESEARCH REPORT ABOUT KYBER NETWORK

RESEARCH REPORT ABOUT KYBER NETWORK
Author: Gamals Ahmed, CoinEx Business Ambassador

https://preview.redd.it/9k31yy1bdcg51.jpg?width=936&format=pjpg&auto=webp&s=99bcb7c3f50b272b7d97247b369848b5d8cc6053

ABSTRACT

In this research report, we present a study on Kyber Network. Kyber Network is a decentralized, on-chain liquidity protocol designed to make trading tokens simple, efficient, robust and secure.
Kyber design allows any party to contribute to an aggregated pool of liquidity within each blockchain while providing a single endpoint for takers to execute trades using the best rates available. We envision a connected liquidity network that facilitates seamless, decentralized cross-chain token swaps across Kyber based networks on different chains.
Kyber is a fully on-chain liquidity protocol that enables decentralized exchange of cryptocurrencies in any application. Liquidity providers (Reserves) are integrated into one single endpoint for takers and users. When a user requests a trade, the protocol will scan the entire network to find the reserve with the best price and take liquidity from that particular reserve.

1.INTRODUCTION

DeFi applications all need access to good liquidity sources, which is a critical component to provide good services. Currently, decentralized liquidity is comprised of various sources including DEXes (Uniswap, OasisDEX, Bancor), decentralized funds and other financial apps. The more scattered the sources, the harder it becomes for anyone to either find the best rate for their trade or to even find enough liquidity for their need.
Kyber is a blockchain-based liquidity protocol that aggregates liquidity from a wide range of reserves, powering instant and secure token exchange in any decentralized application.
The protocol allows for a wide range of implementation possibilities for liquidity providers, allowing a wide range of entities to contribute liquidity, including end users, decentralized exchanges and other decentralized protocols. On the taker side, end users, cryptocurrency wallets, and smart contracts are able to perform instant and trustless token trades at the best rates available amongst the sources.
The Kyber Network is project based on the Ethereum protocol that seeks to completely decentralize the exchange of crypto currencies and make exchange trustless by keeping everything on the blockchain.
Through the Kyber Network, users should be able to instantly convert or exchange any crypto currency.

1.1 OVERVIEW ABOUT KYBER NETWORK PROTOCOL

The Kyber Network is a decentralized way to exchange ETH and different ERC20 tokens instantly — no waiting and no registration needed.
Using this protocol, developers can build innovative payment flows and applications, including instant token swap services, ERC20 payments, and financial DApps — helping to build a world where any token is usable anywhere.
Kyber’s fully on-chain design allows for full transparency and verifiability in the matching engine, as well as seamless composability with DApps, not all of which are possible with off-chain or hybrid approaches. The integration of a large variety of liquidity providers also makes Kyber uniquely capable of supporting sophisticated schemes and catering to the needs of DeFi DApps and financial institutions. Hence, many developers leverage Kyber’s liquidity pool to build innovative financial applications, and not surprisingly, Kyber is the most used DeFi protocol in the world.
The Kyber Network is quite an established project that is trying to change the way we think of decentralised crypto currency exchange.
The Kyber Network has seen very rapid development. After being announced in May 2017 the testnet for the Kyber Network went live in August 2017. An ICO followed in September 2017, with the company raising 200,000 ETH valued at $60 million in just one day.
The live main net was released in February 2018 to whitelisted participants, and on March 19, 2018, the Kyber Network opened the main net as a public beta. Since then the network has seen increasing growth, with network volumes growing more than 500% in the first half of 2019.
Although there was a modest decrease in August 2019 that can be attributed to the price of ETH dropping by 50%, impacting the overall total volumes being traded and processed globally.
They are developing a decentralised exchange protocol that will allow developers to build payment flows and financial apps. This is indeed quite a competitive market as a number of other such protocols have been launched.
In Brief - Kyber Network is a tool that allows anyone to swap tokens instantly without having to use exchanges. - It allows vendors to accept different types of cryptocurrency while still being paid in their preferred crypto of choice. - It’s built primarily for Ethereum, but any smart-contract based blockchain can incorporate it.
At its core, Kyber is a decentralized way to exchange ETH and different ERC20 tokens instantly–no waiting and no registration needed. To do this Kyber uses a diverse set of liquidity pools, or pools of different crypto assets called “reserves” that any project can tap into or integrate with.
A typical use case would be if a vendor allowed customers to pay in whatever currency they wish, but receive the payment in their preferred token. Another example would be for Dapp users. At present, if you are not a token holder of a certain Dapp you can’t use it. With Kyber, you could use your existing tokens, instantly swap them for the Dapp specific token and away you go.
All this swapping happens directly on the Ethereum blockchain, meaning every transaction is completely transparent.

1.1.1 WHY BUILD THE KYBER NETWORK?

While crypto currencies were built to be decentralized, many of the exchanges for trading crypto currencies have become centralized affairs. This has led to security vulnerabilities, with many exchanges becoming the victims of hacking and theft.
It has also led to increased fees and costs, and the centralized exchanges often come with slow transfer times as well. In some cases, wallets have been locked and users are unable to withdraw their coins.
Decentralized exchanges have popped up recently to address the flaws in the centralized exchanges, but they have their own flaws, most notably a lack of liquidity, and often times high costs to modify trades in their on-chain order books.

Some of the Integrations with Kyber Protocol
The Kyber Network was formed to provide users with a decentralized exchange that keeps everything right on the blockchain, and uses a reserve system rather than an order book to provide high liquidity at all times. This will allow for the exchange and transfer of any cryptocurrency, even cross exchanges, and costs will be kept at a minimum as well.
The Kyber Network has three guiding design philosophies since the start:
  1. To be most useful the network needs to be platform-agnostic, which allows any protocol or application the ability to take advantage of the liquidity provided by the Kyber Network without any impact on innovation.
  2. The network was designed to make real-world commerce and decentralized financial products not only possible but also feasible. It does this by allowing for instant token exchange across a wide range of tokens, and without any settlement risk.
  3. The Kyber Network was created with ease of integration as a priority, which is why everything runs fully on-chain and fully transparent. Kyber is not only developer-friendly, but is also compatible with a wide variety of systems.

1.1.2 WHO INVENTED KYBER?

Kyber’s founders are Loi Luu, Victor Tran, Yaron Velner — CEO, CTO, and advisor to the Kyber Network.

1.1.3 WHAT DISTINGUISHES KYBER?

Kyber’s mission has always been to integrate with other protocols so they’ve focused on being developer-friendly by providing architecture to allow anyone to incorporate the technology onto any smart-contract powered blockchain. As a result, a variety of different dapps, vendors, and wallets use Kyber’s infrastructure including Set Protocol, bZx, InstaDApp, and Coinbase wallet.
Besides, dapps, vendors, and wallets, Kyber also integrates with other exchanges such as Uniswap — sharing liquidity pools between the two protocols.
A typical use case would be if a vendor allowed customers to pay in whatever currency they wish, but receive the payment in their preferred token. Another example would be for Dapp users. At present, if you are not a token holder of a certain Dapp you can’t use it. With Kyber, you could use your existing tokens, instantly swap them for the Dapp specific token and away you go.
Limit orders on Kyber allow users to set a specific price in which they would like to exchange a token instead of accepting whatever price currently exists at the time of trading. However, unlike with other exchanges, users never lose custody of their crypto assets during limit orders on Kyber.
The Kyber protocol works by using pools of crypto funds called “reserves”, which currently support over 70 different ERC20 tokens. Reserves are essentially smart contracts with a pool of funds. Different parties with different prices and levels of funding control all reserves. Instead of using order books to match buyers and sellers to return the best price, the Kyber protocol looks at all the reserves and returns the best price among the different reserves. Reserves make money on the “spread” or differences between the buying and selling prices. The Kyber wants any token holder to easily convert one token to another with a minimum of fuss.

1.2 KYBER PROTOCOL

The protocol smart contracts offer a single interface for the best available token exchange rates to be taken from an aggregated liquidity pool across diverse sources. ● Aggregated liquidity pool. The protocol aggregates various liquidity sources into one liquidity pool, making it easy for takers to find the best rates offered with one function call. ● Diverse sources of liquidity. The protocol allows different types of liquidity sources to be plugged into. Liquidity providers may employ different strategies and different implementations to contribute liquidity to the protocol. ● Permissionless. The protocol is designed to be permissionless where any developer can set up various types of reserves, and any end user can contribute liquidity. Implementations need to take into consideration various security vectors, such as reserve spamming, but can be mitigated through a staking mechanism. We can expect implementations to be permissioned initially until the maintainers are confident about these considerations.
The core feature that the Kyber protocol facilitates is the token swap between taker and liquidity sources. The protocol aims to provide the following properties for token trades: ● Instant Settlement. Takers do not have to wait for their orders to be fulfilled, since trade matching and settlement occurs in a single blockchain transaction. This enables trades to be part of a series of actions happening in a single smart contract function. ● Atomicity. When takers make a trade request, their trade either gets fully executed, or is reverted. This “all or nothing” aspect means that takers are not exposed to the risk of partial trade execution. ● Public rate verification. Anyone can verify the rates that are being offered by reserves and have their trades instantly settled just by querying from the smart contracts. ● Ease of integration. Trustless and atomic token trades can be directly and easily integrated into other smart contracts, thereby enabling multiple trades to be performed in a smart contract function.
How each actor works is specified in Section Network Actors. 1. Takers refer to anyone who can directly call the smart contract functions to trade tokens, such as end-users, DApps, and wallets. 2. Reserves refer to anyone who wishes to provide liquidity. They have to implement the smart contract functions defined in the reserve interface in order to be registered and have their token pairs listed. 3. Registered reserves refer to those that will be cycled through for matching taker requests. 4. Maintainers refer to anyone who has permission to access the functions for the adding/removing of reserves and token pairs, such as a DAO or the team behind the protocol implementation. 5. In all, they comprise of the network, which refers to all the actors involved in any given implementation of the protocol.
The protocol implementation needs to have the following: 1. Functions for takers to check rates and execute the trades 2. Functions for the maintainers to registeremove reserves and token pairs 3. Reserve interface that defines the functions reserves needs to implement
https://preview.redd.it/d2tcxc7wdcg51.png?width=700&format=png&auto=webp&s=b2afde388a77054e6731772b9115ee53f09b6a4a

1.3 KYBER CORE SMART CONTRACTS

Kyber Core smart contracts is an implementation of the protocol that has major protocol functions to allow actors to join and interact with the network. For example, the Kyber Core smart contracts provide functions for the listing and delisting of reserves and trading pairs by having clear interfaces for the reserves to comply to be able to register to the network and adding support for new trading pairs. In addition, the Kyber Core smart contracts also provide a function for takers to query the best rate among all the registered reserves, and perform the trades with the corresponding rate and reserve. A trading pair consists of a quote token and any other token that the reserve wishes to support. The quote token is the token that is either traded from or to for all trades. For example, the Ethereum implementation of the Kyber protocol uses Ether as the quote token.
In order to search for the best rate, all reserves supporting the requested token pair will be iterated through. Hence, the Kyber Core smart contracts need to have this search algorithm implemented.
The key functions implemented in the Kyber Core Smart Contracts are listed in Figure 2 below. We will visit and explain the implementation details and security considerations of each function in the Specification Section.

1.4 HOW KYBER’S ON-CHAIN PROTOCOL WORKS?

Kyber is the liquidity infrastructure for decentralized finance. Kyber aggregates liquidity from diverse sources into a pool, which provides the best rates for takers such as DApps, Wallets, DEXs, and End users.

1.4.1 PROVIDING LIQUIDITY AS A RESERVE

Anyone can operate a Kyber Reserve to market make for profit and make their tokens available for DApps in the ecosystem. Through an open reserve architecture, individuals, token teams and professional market makers can contribute token assets to Kyber’s liquidity pool and earn from the spread in every trade. These tokens become available at the best rates across DApps that tap into the network, making them instantly more liquid and useful.
MAIN RESERVE TYPES Kyber currently has over 45 reserves in its network providing liquidity. There are 3 main types of reserves that allow different liquidity contribution options to suit the unique needs of different providers. 1. Automated Price Reserves (APR) — Allows token teams and users with large token holdings to have an automated yet customized pricing system with low maintenance costs. Synthetix and Melon are examples of teams that run APRs. 2. Fed Price Reserves (FPR) — Operated by professional market makers that require custom and advanced pricing strategies tailored to their specific needs. Kyber alongside reserves such as OneBit, runs FPRs. 3. Bridge Reserves (BR) — These are specialized reserves meant to bring liquidity from other on-chain liquidity providers like Uniswap, Oasis, DutchX, and Bancor into the network.

1.5 KYBER NETWORK ROLES

There Kyber Network functions through coordination between several different roles and functions as explained below: - Users — This entity uses the Kyber Network to send and receive tokens. A user can be an individual, a merchant, and even a smart contract account. - Reserve Entities — This role is used to add liquidity to the platform through the dynamic reserve pool. Some reserve entities are internal to the Kyber Network, but others may be registered third parties. Reserve entities may be public if the public contributes to the reserves they hold, otherwise they are considered private. By allowing third parties as reserve entities the network adds diversity, which prevents monopolization and keeps exchange rates competitive. Allowing third party reserve entities also allows for the listing of less popular coins with lower volumes. - Reserve Contributors — Where reserve entities are classified as public, the reserve contributor is the entity providing reserve funds. Their incentive for doing so is a profit share from the reserve. - The Reserve Manager — Maintains the reserve, calculates exchange rates and enters them into the network. The reserve manager profits from exchange spreads set by them on their reserves. They can also benefit from increasing volume by accessing the entire Kyber Network. - The Kyber Network Operator — Currently the Kyber Network team is filling the role of the network operator, which has a function to adds/remove Reserve Entities as well as controlling the listing of tokens. Eventually, this role will revert to a proper decentralized governance.

1.6 BASIC TOKEN TRADE

A basic token trade is one that has the quote token as either the source or destination token of the trade request. The execution flow of a basic token trade is depicted in the diagram below, where a taker would like to exchange BAT tokens for ETH as an example. The trade happens in a single blockchain transaction. 1. Taker sends 1 ETH to the protocol contract, and would like to receive BAT in return. 2. Protocol contract queries the first reserve for its ETH to BAT exchange rate. 3. Reserve 1 offers an exchange rate of 1 ETH for 800 BAT. 4. Protocol contract queries the second reserve for its ETH to BAT exchange rate. 5. Reserve 2 offers an exchange rate of 1 ETH for 820 BAT. 6. This process goes on for the other reserves. After the iteration, reserve 2 is discovered to have offered the best ETH to BAT exchange rate. 7. Protocol contract sends 1 ETH to reserve 2. 8. The reserve sends 820 BAT to the taker.

1.7 TOKEN-TO-TOKEN TRADE

A token-to-token trade is one where the quote token is neither the source nor the destination token of the trade request. The exchange flow of a token to token trade is depicted in the diagram below, where a taker would like to exchange BAT tokens for DAI as an example. The trade happens in a single blockchain transaction. 1. Taker sends 50 BAT to the protocol contract, and would like to receive DAI in return. 2. Protocol contract sends 50 BAT to the reserve offering the best BAT to ETH rate. 3. Protocol contract receives 1 ETH in return. 4. Protocol contract sends 1 ETH to the reserve offering the best ETH to DAI rate. 5. Protocol contract receives 30 DAI in return. 6. Protocol contract sends 30 DAI to the user.

2.KYBER NETWORK CRYSTAL (KNC) TOKEN

Kyber Network Crystal (KNC) is an ERC-20 utility token and an integral part of Kyber Network.
KNC is the first deflationary staking token where staking rewards and token burns are generated from actual network usage and growth in DeFi.
The Kyber Network Crystal (KNC) is the backbone of the Kyber Network. It works to connect liquidity providers and those who need liquidity and serves three distinct purposes. The first of these is to collect transaction fees, and a portion of every fee collected is burned, which keeps KNC deflationary. Kyber Network Crystals (KNC), are named after the crystals in Star Wars used to power light sabers.
The KNC also ensures the smooth operation of the reserve system in the Kyber liquidity since entities must use third-party tokens to buy the KNC that pays for their operations in the network.
KNC allows token holders to play a critical role in determining the incentive system, building a wide base of stakeholders, and facilitating economic flow in the network. A small fee is charged each time a token exchange happens on the network, and KNC holders get to vote on this fee model and distribution, as well as other important decisions. Over time, as more trades are executed, additional fees will be generated for staking rewards and reserve rebates, while more KNC will be burned. - Participation rewards — KNC holders can stake KNC in the KyberDAO and vote on key parameters. Voters will earn staking rewards (in ETH) - Burning — Some of the network fees will be burned to reduce KNC supply permanently, providing long-term value accrual from decreasing supply. - Reserve incentives — KNC holders determine the portion of network fees that are used as rebates for selected liquidity providers (reserves) based on their volume performance.

Finally, the KNC token is the connection between the Kyber Network and the exchanges, wallets, and dApps that leverage the liquidity network. This is a virtuous system since entities are rewarded with referral fees for directing more users to the Kyber Network, which helps increase adoption for Kyber and for the entities using the Network.
And of course there will soon be a fourth and fifth uses for the KNC, which will be as a staking token used to generate passive income, as well as a governance token used to vote on key parameters of the network.
The Kyber Network Crystal (KNC) was released in a September 2017 ICO at a price around $1. There were 226,000,000 KNC minted for the ICO, with 61% sold to the public. The remaining 39% are controlled 50/50 by the company and the founders/advisors, with a 1 year lockup period and 2 year vesting period.
Currently, just over 180 million coins are in circulation, and the total supply has been reduced to 210.94 million after the company burned 1 millionth KNC token in May 2019 and then its second millionth KNC token just three months later.
That means that while it took 15 months to burn the first million KNC, it took just 10 weeks to burn the second million KNC. That shows how rapidly adoption has been growing recently for Kyber, with July 2019 USD trading volumes on the Kyber Network nearly reaching $60 million. This volume has continued growing, and on march 13, 2020 the network experienced its highest daily trading activity of $33.7 million in a 24-hour period.
Currently KNC is required by Reserve Managers to operate on the network, which ensures a minimum amount of demand for the token. Combined with future plans for burning coins, price is expected to maintain an upward bias, although it has suffered along with the broader market in 2018 and more recently during the summer of 2019.
It was unfortunate in 2020 that a beginning rally was cut short by the coronavirus pandemic, although the token has stabilized as of April 2020, and there are hopes the rally could resume in the summer of 2020.

2.1 HOW ARE KNC TOKENS PRODUCED?

The native token of Kyber is called Kyber Network Crystals (KNC). All reserves are required to pay fees in KNC for the right to manage reserves. The KNC collected as fees are either burned and taken out of the total supply or awarded to integrated dapps as an incentive to help them grow.

2.2 HOW DO YOU GET HOLD OF KNC TOKENS?

Kyber Swap can be used to buy ETH directly using a credit card, which can then be used to swap for KNC. Besides Kyber itself, exchanges such as Binance, Huobi, and OKex trade KNC.

2.3 WHAT CAN YOU DO WITH KYBER?

The most direct and basic function of Kyber is for instantly swapping tokens without registering an account, which anyone can do using an Etheruem wallet such as MetaMask. Users can also create their own reserves and contribute funds to a reserve, but that process is still fairly technical one–something Kyber is working on making easier for users in the future.

2.4 THE GOAL OF KYBER THE FUTURE

The goal of Kyber in the coming years is to solidify its position as a one-stop solution for powering liquidity and token swapping on Ethereum. Kyber plans on a major protocol upgrade called Katalyst, which will create new incentives and growth opportunities for all stakeholders in their ecosystem, especially KNC holders. The upgrade will mean more use cases for KNC including to use KNC to vote on governance decisions through a decentralized organization (DAO) called the KyberDAO.
With our upcoming Katalyst protocol upgrade and new KNC model, Kyber will provide even more benefits for stakeholders. For instance, reserves will no longer need to hold a KNC balance for fees, removing a major friction point, and there will be rebates for top performing reserves. KNC holders can also stake their KNC to participate in governance and receive rewards.

2.5 BUYING & STORING KNC

Those interested in buying KNC tokens can do so at a number of exchanges. Perhaps your best bet between the complete list is the likes of Coinbase Pro and Binance. The former is based in the USA whereas the latter is an offshore exchange.
The trading volume is well spread out at these exchanges, which means that the liquidity is not concentrated and dependent on any one exchange. You also have decent liquidity on each of the exchange books. For example, the Binance BTC / KNC books are wide and there is decent turnover. This means easier order execution.
KNC is an ERC20 token and can be stored in any wallet with ERC20 support, such as MyEtherWallet or MetaMask. One interesting alternative is the KyberSwap Android mobile app that was released in August 2019.
It allows for instant swapping of tokens and has support for over 70 different altcoins. It also allows users to set price alerts and limit orders and works as a full-featured Ethereum wallet.

2.6 KYBER KATALYST UPGRADE

Kyber has announced their intention to become the de facto liquidity layer for the Decentralized Finance space, aiming to have Kyber as the single on-chain endpoint used by the majority of liquidity providers and dApp developers. In order to achieve this goal the Kyber Network team is looking to create an open ecosystem that garners trust from the decentralized finance space. They believe this is the path that will lead the majority of projects, developers, and users to choose Kyber for liquidity needs. With that in mind they have recently announced the launch of a protocol upgrade to Kyber which is being called Katalyst.
The Katalyst upgrade will create a stronger ecosystem by creating strong alignments towards a common goal, while also strengthening the incentives for stakeholders to participate in the ecosystem.
The primary beneficiaries of the Katalyst upgrade will be the three major Kyber stakeholders: 1. Reserve managers who provide network liquidity; 2. dApps that connect takers to Kyber; 3. KNC holders.
These stakeholders can expect to see benefits as highlighted below: Reserve Managers will see two new benefits to providing liquidity for the network. The first of these benefits will be incentives for providing reserves. Once Katalyst is implemented part of the fees collected will go to the reserve managers as an incentive for providing liquidity.
This mechanism is similar to rebates in traditional finance, and is expected to drive the creation of additional reserves and market making, which in turn will lead to greater liquidity and platform reach.
Katalyst will also do away with the need for reserve managers to maintain a KNC balance for use as network fees. Instead fees will be automatically collected and used as incentives or burned as appropriate. This should remove a great deal of friction for reserves to connect with Kyber without affecting the competitive exchange rates that takers in the system enjoy. dApp Integrators will now be able to set their own spread, which will give them full control over their own business model. This means the current fee sharing program that shares 30% of the 0.25% fee with dApp developers will go away and developers will determine their own spread. It’s believed this will increase dApp development within Kyber as developers will now be in control of fees.
KNC Holders, often thought of as the core of the Kyber Network, will be able to take advantage of a new staking mechanism that will allow them to receive a portion of network fees by staking their KNC and participating in the KyberDAO.

2.7 COMING KYBERDAO

With the implementation of the Katalyst protocol the KNC holders will be put right at the heart of Kyber. Holders of KNC tokens will now have a critical role to play in determining the future economic flow of the network, including its incentive systems.
The primary way this will be achieved is through KyberDAO, a way in which on-chain and off-chain governance will align to streamline cooperation between the Kyber team, KNC holders, and market participants.
The Kyber Network team has identified 3 key areas of consideration for the KyberDAO: 1. Broad representation, transparent governance and network stability 2. Strong incentives for KNC holders to maintain their stake and be highly involved in governance 3. Maximizing participation with a wide range of options for voting delegation
Interaction between KNC Holders & Kyber
This means KNC holders have been empowered to determine the network fee and how to allocate the fees to ensure maximum network growth. KNC holders will now have three fee allocation options to vote on: - Voting Rewards: Immediate value creation. Holders who stake and participate in the KyberDAO get their share of the fees designated for rewards. - Burning: Long term value accrual. The decreasing supply of KNC will improve the token appreciation over time and benefit those who did not participate. - Reserve Incentives:Value creation via network growth. By rewarding Kyber reserve managers based on their performance, it helps to drive greater volume, value, and network fees.

2.8 TRANSPARENCY AND STABILITY

The design of the KyberDAO is meant to allow for the greatest network stability, as well as maximum transparency and the ability to quickly recover in emergency situations. Initally the Kyber team will remain as maintainers of the KyberDAO. The system is being developed to be as verifiable as possible, while still maintaining maximum transparency regarding the role of the maintainer in the DAO.
Part of this transparency means that all data and processes are stored on-chain if feasible. Voting regarding network fees and allocations will be done on-chain and will be immutable. In situations where on-chain storage or execution is not feasible there will be a set of off-chain governance processes developed to ensure all decisions are followed through on.

2.9 KNC STAKING AND DELEGATION

Staking will be a new addition and both staking and voting will be done in fixed periods of times called “epochs”. These epochs will be measured in Ethereum block times, and each KyberDAO epoch will last roughly 2 weeks.
This is a relatively rapid epoch and it is beneficial in that it gives more rapid DAO conclusion and decision-making, while also conferring faster reward distribution. On the downside it means there needs to be a new voting campaign every two weeks, which requires more frequent participation from KNC stakeholders, as well as more work from the Kyber team.
Delegation will be part of the protocol, allowing stakers to delegate their voting rights to third-party pools or other entities. The pools receiving the delegation rights will be free to determine their own fee structure and voting decisions. Because the pools will share in rewards, and because their voting decisions will be clearly visible on-chain, it is expected that they will continue to work to the benefit of the network.

3. TRADING

After the September 2017 ICO, KNC settled into a trading price that hovered around $1.00 (decreasing in BTC value) until December. The token has followed the trend of most other altcoins — rising in price through December and sharply declining toward the beginning of January 2018.
The KNC price fell throughout all of 2018 with one exception during April. From April 6th to April 28th, the price rose over 200 percent. This run-up coincided with a blog post outlining plans to bring Bitcoin to the Ethereum blockchain. Since then, however, the price has steadily fallen, currently resting on what looks like a $0.15 (~0.000045 BTC) floor.
With the number of partners using the Kyber Network, the price may rise as they begin to fully use the network. The development team has consistently hit the milestones they’ve set out to achieve, so make note of any release announcements on the horizon.

4. COMPETITION

The 0x project is the biggest competitor to Kyber Network. Both teams are attempting to enter the decentralized exchange market. The primary difference between the two is that Kyber performs the entire exchange process on-chain while 0x keeps the order book and matching off-chain.
As a crypto swap exchange, the platform also competes with ShapeShift and Changelly.

5.KYBER MILESTONES

• June 2020: Digifox, an all-in-one finance application by popular crypto trader and Youtuber Nicholas Merten a.k.a DataDash (340K subs), integrated Kyber to enable users to easily swap between cryptocurrencies without having to leave the application. • June 2020: Stake Capital partnered with Kyber to provide convenient KNC staking and delegation services, and also took a KNC position to participate in governance. • June 2020: Outlined the benefits of the Fed Price Reserve (FPR) for professional market makers and advanced developers. • May 2020: Kyber crossed US$1 Billion in total trading volume and 1 Million transactions, performed entirely on-chain on Ethereum. • May 2020: StakeWith.Us partnered Kyber Network as a KyberDAO Pool Master. • May 2020: 2Key, a popular blockchain referral solution using smart links, integrated Kyber’s on-chain liquidity protocol for seamless token swaps • May 2020: Blockchain game League of Kingdoms integrated Kyber to accept Token Payments for Land NFTs. • May 2020: Joined the Zcash Developer Alliance , an invite-only working group to advance Zcash development and interoperability. • May 2020: Joined the Chicago DeFi Alliance to help accelerate on-chain market making for professionals and developers. • March 2020: Set a new record of USD $33.7M in 24H fully on-chain trading volume, and $190M in 30 day on-chain trading volume. • March 2020: Integrated by Rarible, Bullionix, and Unstoppable Domains, with the KyberWidget deployed on IPFS, which allows anyone to swap tokens through Kyber without being blocked. • February 2020: Popular Ethereum blockchain game Axie Infinity integrated Kyber to accept ERC20 payments for NFT game items. • February 2020: Kyber’s protocol was integrated by Gelato Finance, Idle Finance, rTrees, Sablier, and 0x API for their liquidity needs. • January 2020: Kyber Network was found to be the most used protocol in the whole decentralized finance (DeFi) space in 2019, according to a DeFi research report by Binance. • December 2019: Switcheo integrated Kyber’s protocol for enhanced liquidity on their own DEX. • December 2019: DeFi Wallet Eidoo integrated Kyber for seamless in-wallet token swaps. • December 2019: Announced the development of the Katalyst Protocol Upgrade and new KNC token model. • July 2019: Developed the Waterloo Bridge , a Decentralized Practical Cross-chain Bridge between EOS and Ethereum, successfully demonstrating a token swap between Ethereum to EOS. • July 2019: Trust Wallet, the official Binance wallet, integrated Kyber as part of its decentralized token exchange service, allowing even more seamless in-wallet token swaps for thousands of users around the world. • May 2019: HTC, the large consumer electronics company with more than 20 years of innovation, integrated Kyber into its Zion Vault Wallet on EXODUS 1 , the first native web 3.0 blockchain phone, allowing users to easily swap between cryptocurrencies in a decentralized manner without leaving the wallet. • January 2019: Introduced the Automated Price Reserve (APR) , a capital efficient way for token teams and individuals to market make with low slippage. • January 2019: The popular Enjin Wallet, a default blockchain DApp on the Samsung S10 and S20 mobile phones, integrated Kyber to enable in-wallet token swaps. • October 2018: Kyber was a founding member of the WBTC (Wrapped Bitcoin) Initiative and DAO. • October 2018: Developed the KyberWidget for ERC20 token swaps on any website, with CoinGecko being the first major project to use it on their popular site.

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