All about SKALE Network!
Introduction
Like all technological innovations, Blockchain Technology has been evolving through pioneering breakthroughs that continue to make its use and application better. SKALE is one such technology leader intent on addressing the limitations concerning configurability, latency, and performance in the traditional blockchain development. SKALE Network is an Elastic Blockchain Network protocol that makes it easy for developers to provide highly configurable blockchains to leverage decentralization benefits.
What is Blockchain Technology?
In simple terms, Blockchain, as the name suggests, is a chain of blocks that contains information. This technology was invented way back in 1991 with the intention of date mstamping digital documents so that it is not possible to backdate or tamper them. However, it got its due credit only in 2009 when Satoshi Nakamoto used it to create the digital cryptocurrency, Bitcoin. Blockchain can enable the execution of complex contracts, be it legal, commercial, or cultural, without any third-party intervention. It is difficult to tamper with the stored data in a blockchain, making it highly secure.
What is SKALE Network?
The SKALE Network is like an add-on to the existing Ethereum blockchain in the form of elastic sidechains. This is achieved through a high-throughput, low-latency, configurable Byzantium fault tolerant, elastic blockchain network. Thus, it can also be called as an ‘Elastic Sidechain Network.’
The virtualized subnodes selected from a subset of nodes in the network operate the sidechains. With each sidechain being highly configurable, consumers can choose many features like chain’s size, consensus protocol, virtual machine, parent blockchain, etc.
SKALE Manager
SKALE Manager exists on the Ethereum mainnet and serves as an entry point to all other smart contract on the SKALE ecosystem.
The SKALE Manager will randomly select a group of nodes with enough space on them to support the desired subnode size and then have it assigned to the Elastic Sidechain.
Elastic Sidechains
Can be created by the users after specifying the desired configurations and the payment to rent the network resources for running the chain. Users can select to run their Elastic Sidechains with a minimum of 16 virtualized subnodes, where each subnode is using either 1/128(small), 1/16(medium) or 1/1(large) resources of each node.
As the network grows, users will be able to decide about their virtualized subnode numbers, size and signers.
SKALE virtualized subnodes
A collection of virtualized subnodes that comprises an Elastic Sidechain is used to run SKALE Daemon and SKALE consensus. The nodes are deployed within a containerized virtualized subnode architecture, because of this each node can run many Elastic Sidechains at the same time.
Attacks and faults
To counter network downtime, below are some of the contingency strategies that are integrated by SKALE:
a. During a Reboot/Crash: In case of a reboot, the node that is being rebooted will be temporarily unavailable for peer nodes. After the reboot is completed the incoming messages to the node will be delivered.
In the case of a crash, due to a hardware failure or a software bug all the messages older than an hour will be dropped to keep the message queues from overflowing with undelivered messages.
b. Catchup Agent: A catchup agent running on each node makes sure that node’s blockchain and block proposal database are synced with the network. Any node that founds out that it’s TIP_ID is smaller than their peer will download the missing blocks, verify supermajority threshold signatures on the received blocks and will commit them to the chain.
c. Security Incident Response: Typical response will be like:
1. If a security compromise is detected, Elastic Sidechain owners will request Ethereum SKALE Manager contract to suspend the chain temporarily.
2. The Elastic Sidechain will be marked as suspended by the SKALE Manager.
3. SKALE Manager will send a notification to uncompromised virtualized subnodes to freeze their operations.
4. All the requests made to the Elastic Sidechain will be rejected and the clients of the Sidechain will be informed of the suspension.
5. The Elastic Sidechain creator will consult with N.O.D.E Foundation Security Incident Report Team (SIRT) to resolve the issue.
SKALE Protocol
a. Next Gen PoS-Based Network: It follows a Proof-of-Stake system where each node stakes a particular (previously decided upon) amount of SKALE tokens. A 24 peers are appointed to each node to monitor and log their participation, uptime and latency.
b. Delegation: Holders of the SKALE can delegate their tokens to any node in the network that have a minimum number of tokens staked. Due to SKALE’s consensus being leaderless, the effect of virtualized subnode weighting will have null effect on the rewards gained by each node.
c. Consensus: Keeping in mind that the malicious actors within network like botntes, DDOS, malicious firewalls, can interfere with the network messaging and that a large-scale network should be able to support high-throughput of messages, SKALE uses a variant of Moustefaoi et. al consensus.
This consensus also provides necessary properties for a truly decentralized, high-throughput network.
d. Leaderless: Instead of electing a leader for proposing some data so that the network can run consensus and reach agreement on, SKALE consensus implements a protocol where all virtualized subnodes are able to propose blocks. Out of these, only those which receive a supermajority of signatures are eligible to be accepted for potential commitment to the Blockchain.
e. Asynchronous: There are no expectations for a message to be delivered within the network in a set time. Virtualized subnodes send messages in the network with no expectation of a response and implement back-off procedure where a reattempt is made to deliver the messages that have not been responded to yet.
f. Byzantine Fault Tolerant: It is the standard for for the security in the distributed systems. BFT systems can guarantee that nodes in a network can always agree on a same consensus if <1/2 malicious nodes are present.
Out of various implementations of BFT, Asynchronous BFT is the strongest.
g. Threshold Signatures: y For supermajority voting SKALE protocol uses Threshold Signatures. Once a Sidechain is created, Boneh Lyn Shacham(BLS) private key shares PKS[I] are created using joint-Feldman Distributed Key Generation(DKG) and issued to each virtualized subnode.
Extension
Think of extensions as add-ons to existing network for better functionality and utility of the network. Two main ones are:
a. Storage: Increasing the block sizes(more data in each block) as well as direct access to each node’s file system allows for a much larger file storing capabilities.
Files on the network can be split in 1MB “chunks” and can be submitted to the fileStorage smart contract. Network files can also be deleted in a rent-style fashion so that the resources can be relocated by the network.
b. Interchain Communication: There is an inbox and an outbox in Elastic Sidechains. Messages are stored in outbox until they are picked up by a randomly-appointed agent who will then send the message to the appropriate recipient mailbox.
Along with this message, any additional metadata which is required to validate that the transaction was included in the sending chain’s blockchain. The transaction is forwarded after being proved on the recipient’s blockchain.
Governance
The N.O.D.E Foundation will have the access to IP, money, assets, and power, passed by the SKALE labs. The network launch control will be then handed over to a decentralized governance model for network governance. Elected Network Representatives and a Foundation Council will support the On-chain voting.
It follows a Delegated Stake Model where a stakeholder can either participate in governance by directly voting with its stake or can delegate the voting power to other stakeholders.
SKALE uses a simple majority vote of stakes that participate in the vote as its default voting model. A single proposal may consist of 14-day voting period.
SKALE Token
It is a hybrid token representing right to work in the network as a validator, stake as a delegator or can be used to access a share of its resources by deploying and renting an Elastic Sidechain.
Resources like computations, storage, bandwidth can be rented by the users, by using SKALE tokens as an Elastic Sidechain.
Validators can earn both fees and tokens by staking SKALE into the network. Delegators may delegate their tokens to validators and earn rewards.
Token Distribution
- Number of tokens The Total supply of SKL tokens at Network launch is 4,140,000,000. The Network has a max supply of 7,000,000,000 tokens.
- Distribution
a. 34.3% allocated to the Validator Community and Ecosystem.
33% of which is designed to be paid to validators via inflation at rates listed below.
~1.3% will go towards ecosystem community growth via grants and awards, and payment for validator required ecosystem essentials for liquidity of the network tokens.
b. ~25–28%% allocated to Network Supporters who purchase tokens prior to Network Launch with the intent of running Validator Nodes, delegating, or using Elastic Sidechains for their dApps. All are locked for periods of 6–36 months following network launch.
c. ~7.7% are dedicated to support Protocol Development for future financing and grant efforts to support operations and contracts that will improve, enhance, and support the Network.
d. 20% allocated to Network Creators and Builders with a 3–4 year vesting period and 12 month lock both of which commence at Network launch date, putting total vest period at 5–6 years based on Q3 2019 Launch date.
~16% to broader foundational team and ~4% for Employee Token Option Pool to ensure further development on the network.
e. 10% allocated to N.O.D.E. Foundation. 150 Million are minted at Genesis and 550 Million are minted at Month 6 with an unlocking schedule that commences at 24 months based on milestone achievements which include having an active running network and a decentralized validator community running nodes.
f. 2.5% to the public token event
3. Vesting Schedule and Lock-ups
a. Pre-purchased tokens in prior SAFT rounds are locked from a period of 9 to 36 months based on SAFT agreements. Lock period commences at network launch.
b. The team will be locked for one year and will have a 3–4 year vest. Lock and vest time period commences at network launch.
c. The Foundation will vest over a 7 year period.
4. Inflation
a. Validator Rewards Mechanism: Validator rewards will mint in the first year at 9.3% of the max supply of tokens. The validator rewards rate will ladder down for the first 6 years then halve every 3 years to perpetuity until the max supply of tokens is reached in the network.These numbers are subject to changes leading up to Mainnet launch based on economic analysis and community feedback.
Token Distribution Chart
Token Unlock Schedule
Summing up the unique features of SKALE
Decentralized systems used in blockchain technology have revolutionized the way businesses are run by bringing the much-needed security into the foray. However, they do come with a few limitations when we consider scalability, speed, cost-effectiveness, and ease of use. SKALE network intends to overcome these inadequacies, and the seven highly advanced technical features detailed below enable achieving this objective:
1. Building Powerful dApps is made super simple!
SKALE Network enables developers to effortlessly build powerful dApps on decentralized networks like Ethereum and deploy with minimal and simple coding. Even beginners can effortlessly build dApps by using the step-by-step guide provided by SKALE.
2. Elastic Sidechain Network
SKALE Network uses the concept of Elastic Sidechains to enhance the performance of the network. Sidechains are nothing but separate blockchains attached to a parent blockchain that help secure the exchange of digital assets from one blockchain to another and vice versa. These Ethereum-compatible elastic sidechains offer enhanced security as they are highly decentralized, configurable, and interoperable. An improved user experience, greater storage capacity, increased processing control on transactions, and cost-effectiveness are significant benefits that Sidechains and hence SKALE offer to the users.
It is mind boggling to note how the use of Elastic Sidechains can bring in dramatic efficiency and effectiveness in businesses. Business domains such as Decentralized Finance, Media Streaming, Online Gaming, predictive markets, and many more can achieve significant efficiency by leveraging elastic side chains’ advantages. For example, let us consider the use of this technology in the Decentralized Finance segment — the day is not far when someone can do 40 transactions in an hour, instead of in a month. Still, we will also see many types of new
transactions that would seem strange to us today*r, instead of in a month. Still, we will also see many types of new transactions that would seem strange to us today*
3. Byzantine Fault Tolerant (BFT)
As we all know, blockchains as decentralized systems are akin to distributed computing systems.
Byzantine Fault Tolerance is the Security Standard for distributed systems. As a BFT system, the SKALE network guarantees operation continuation even when up to one-third of its components or nodes fail/are malicious. It is very similar to the Business Continuity Plan that organizations develop in the eventuality of a force majeure or emergencies.
4. Asynchronous Protocol
The asynchronous protocol employed in the SKALE network overcomes the latency limitations for delivering messages within the network. It means the SKALE network allows the delivery of messages indefinitely without setting any time limits.
5. Threshold Signatures
Threshold signatures are digital signatures authorized by the signers by establishing groups such that only the chosen subsets of the group can produce signatures on the group’s behalf.
Threshold signatures enable efficient communication between elastic chains and allow random allocation of nodes.
6. Leaderless Consensus
Generally, most of the existing distributed or decentralized consensus protocols elect a network leader to secure a consensus and reach an agreement. The SKALE network deploys a leaderless consensus protocol allowing each participant fair & equal opportunity to propose a new block. The leaderless protocol eliminates the chances of conflict between the participants/sub nodes on the network by allowing all sub-nodes to propose. Only those with a majority of signatures will be accepted.
7. SKALE Network Validators
Traditional side chains run the risk of a security breach as they use a smaller number of validator nodes. SKALE Network uses a pooled validation model wherein it uses a large number of validator nodes. A large number of nodes combined with random allocation of nodes and frequent rotation of nodes within the validator sets enable a high-security level to the network.
By mandating each validator to stake a value into the network via SKALE Tokens, the security is made more robust.
Scaling Traditional Blockchain Barriers
The inherent inadequacies of blockchain technology have led to the slow adoption of Ethereum-based applications. SKALE’s mission is to help increase the adoption of these applications by provisioning a decentralized solution that provides a smart answer to the existing problems. SKALE provides an eco-system that enhances not just the user experience, but also developer experience.
Be a Developer or a Customer, experience SKALE — Enhance your User Experience without fail.
SKALE FAQ
Where can I read more about SKALE Network Tokenomics.
Token and Network economics can be found here: https://skale.network/tokenomics
What is SKALE Labs?
The core team behind the SKALE Network protocol is SKALE labs. SKALE Labs offices are in San Francisco, CA and Kharkiv, Ukraine.
Who are some of the investors of SKALE Labs?
Some of the investors include Blockchange, ConsenSys Labs, Hashed, HashKey, Floodgate, and many more.
Who is(are) the founder(s) of SKALE Labs?
Jack O’Holleran(CEO) and Stan Kladko(CTO.)
What is N.O.D.E Foundation?
N.O.D.E also known as Network of Decentralized Economics Foundation is a non-profit entity based out of Liechtenstein created to carry out the mission of supporting the SKALE network open source project.
Are there any dApps using SKALE?
Currently over 60 dApps are in SKALE’s Innovator program.
Are there any Validators running on SKALE?
As of now, there are over 46 validator orgs running SKALE.
When is the launch of Mainnet?
Mainnet I was launched on June 30, 2020.
Mainnet II was launched on October 1, 2020.
Mainnet III was launched on December 1, 2020.
Where can I buy SKALE tokens?
You can buy SKALE tokens from Binance, Huobi, Crypto.com, Uniswap and many more!
For more information about SKALE please head to their website, blog, Telegram, Discord, Github or Twitter. Alternatively, you can also refer their Whitepaper for detailed information.
