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Permanent Cloud StorageIn today's digital age, cloud storage has become an essential aspect of our daily lives. With the increasing amount of data that we generate and need to store, the traditional means of data storage, such as physical hard drives or flash drives, are becoming less practical. Cloud storage offers a more convenient and accessible solution, allowing users to store their data on remote servers that they can access from anywhere, at any time, as long as they have an inter...
AryaWaves: Layer-1? Layer-0? Both?
Many layer-1 platforms exist out there. A layer-1 platform, in the blockchain world, is a blockchain able to perform smart contracts and dApps, without any dependency on any other blockchains. Actually, Waves is and is not one of these. This may sound confusing to you. How can a blockchain be both a layer-1 platform and not? Well, the answer is complex, and to get to the answer, it is best first to know what layer-0 is.Layer-0Blockchains Layer-0 blockchain is a concept that Cosmos Network int...
AryaDiscrete Logarithm in Cryptography
Discrete logarithm is one of the most important parts of cryptography. This mathematical concept is one of the most important concepts one can find in public key cryptography. Let’s first determine a very basic algorithm to make public keys in cryptography and then describe how discrete logarithm can help us in this algorithm.Diffie-Hellman Key ExchangeIn this method, there are two people, Alice and Bob, who want to make a safe channel to exchange messages, which Eve is an untrusted person wh...
Researcher, Enthusiast, Blockchain and Crypto Lover, Cryptography Lover, Ethereum is the King.
AryaArweave: The Permanent Data Storage
Permanent Cloud StorageIn today's digital age, cloud storage has become an essential aspect of our daily lives. With the increasing amount of data that we generate and need to store, the traditional means of data storage, such as physical hard drives or flash drives, are becoming less practical. Cloud storage offers a more convenient and accessible solution, allowing users to store their data on remote servers that they can access from anywhere, at any time, as long as they have an inter...
AryaWaves: Layer-1? Layer-0? Both?
Many layer-1 platforms exist out there. A layer-1 platform, in the blockchain world, is a blockchain able to perform smart contracts and dApps, without any dependency on any other blockchains. Actually, Waves is and is not one of these. This may sound confusing to you. How can a blockchain be both a layer-1 platform and not? Well, the answer is complex, and to get to the answer, it is best first to know what layer-0 is.Layer-0Blockchains Layer-0 blockchain is a concept that Cosmos Network int...
AryaDiscrete Logarithm in Cryptography
Discrete logarithm is one of the most important parts of cryptography. This mathematical concept is one of the most important concepts one can find in public key cryptography. Let’s first determine a very basic algorithm to make public keys in cryptography and then describe how discrete logarithm can help us in this algorithm.Diffie-Hellman Key ExchangeIn this method, there are two people, Alice and Bob, who want to make a safe channel to exchange messages, which Eve is an untrusted person wh...
Researcher, Enthusiast, Blockchain and Crypto Lover, Cryptography Lover, Ethereum is the King.
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Let’s start with the concept of layer-0 blockchain before anything else.
Layer-0 (L0) blockchain is a concept that Cosmos Network introduced to the world. This concept brings the idea of interoperability to the blockchain and cryptocurrency world. As a very brief review, let me describe L0s.
A layer-0 blockchain is a blockchain that can connect many layer-1 (L1) blockchains and let them communicate. These blockchains, unlike L1s, don’t accept “smart contracts,” directly. They create an infrastructure, in which many L1s connect and those L1s accept and run many smart contracts. In this infrastructure, inter-blockchain communication is made possible, and miners and validators of these L1 blockchains can easily talk about what is happening in the L1 blockchains.
This brings many possibilities to the blockchain world: dApps won’t need to recreate for other L1 chains; the risk of fraud in between chains can reduce dramatically (if implemented correctly); the need for bridges (smart contracts to connect compatible blockchains) reduces, hence, less smart contract risk; and last but not least, scalability of the inner-join of those chains soars.
For these many reasons, and maybe much more, the invention of the L0 blockchain seems to be a great idea. I can talk a lot about this concept, how it is formed, and how it can benefit the world, but I leave you with this other article of mine, in which I talked about the concept of layer-0 in the introduction.
Now that we briefly understand L0 blockchains, it is time to go look at the Venom blockchain.
The Venom blockchain is an L0 blockchain, designed to have 100,000+ throughput. The Venom Foundation, the creator of the so-called blockchain, claims that this blockchain can have less than $0.0002 for the fee of the transactions. Well, both of these claims are big in this era of blockchain, and I am here to see if they are possible or not.
In their whitepaper, they made a very clear structure of how they are going to make these claims possible. If you are not a fan of long reads, I plan to summarize it here for you.
They started with the current problems that our decentralized world (the blockchain world) faces:
Scalability: the “limited ability to scale and process a high volume of transactions per second” [the Venom whitepaper];
Security: “a comprehensive risk management system for a blockchain network, using cybersecurity frameworks, assurance services and best practices to reduce risks against attacks and fraud” [IBM];
Regulation: “countries have taken different approaches to regulate blockchain and cryptocurrencies” [the Venom whitepaper];
Adoption: “despite the potential benefits of blockchain, there has been slow adoption in industries” [the Venom whitepaper];
Interoperability: “Interoperability refers to the ability of different blockchain networks to communicate with each other and exchange information” [the Venom whitepaper].
With these in mind, Venom introduced “Dynamic Sharding Protocol.” In this protocol, there can be many shards with two fascinating features. They can “split” and “merge”. When a shard gets crowded, it can split. In their actual definition, “If for 100 seconds (~50 blocks currently), the shardchain blocks are at least 90% full (note that these values are configurable and may be tuned in Masterchain),” the split event can be proposed by the validator that is responsible for the block production of that specific shard. After the proposal, the Masterchain validators will evaluate it and accept or reject it. In case of acceptance, the shards split into two shards with exactly half of the account addresses in the previous shard, and each will get its own set of validators, given by the Masterchain validators.
On the other hand, when two--sibling--shards are not crowded enough, they can be merged. Again, in their actual definition, “the sum of the sizes of the two blocks of sibling shardchains, and if, for 100 seconds (~50 blocks currently), this sum does not exceed 60% of the maximal block size, the validators will produce a block with a "want merge" flag (note that these values are configurable and may be tuned in Masterchain).” After this proposal, the Masterchain validators decide on the merge and its set of validators.
These features can make the blockchain able to get bigger if needed, and get smaller if not enough transactions occur on the chains. This can ensure the safety of shards and their scalability.
After this part, they introduced workchains. These chains are L1 blockchains living on shards that can accept and run many smart contracts. There are three types of workchains:
“Public: open to anyone to participate and build on;
Private: intended for specific groups or organizations to use;
Consotium: a collaboration between a group of entities.”
Masterchain is the last “chain” that is introduced. This chain is responsible for everything. It is the backbone of the whole system and the whole security lies in the hands of this layer. All workchains are connected to the Masterchain through shardchains. Everything is finalized and decided in the Masterchain.
In the next part, the consensus protocol is introduced. It uses a combination of Proof-of-Stake (PoS) and the Byzantine Fault Tolerance (BFT). Just like almost any other PoS blockchain, the stakes are to maintain security and get rewarded for good behavior and block production. As mentioned before, there are three types of validator sets:
“Overall validator set: The weight-sorted validator list of all validators chosen to participate in the validation process.
Masterchain validator set: The list of validators with the largest stake is chosen from the overall validator set.
Shardchain validator set: The group of validators chosen from the overall validator set maintains block processing for a specific shardchain.”
Of course, the protocol uses a round-robin system to transfer roles so that a single validator will not stay as the block producer for life, and turns.
It is worth noting that the Venom blockchain does not allow for forks. This means that each and every transaction that gets its way to the blockchain is finalized instantly, and there is no need to wait for a number of confirmation blocks. This is called “deterministic finality.”
After that, there are some specifications of how the components of the consensus protocol are connected and how the consensus is reached.
In the fifth section, a long and specific description of their virtual machine is given. Other than the part about the fee structure, there are no complex concepts that are related to how Venom can be fast and cheap. In the fee structure part, we can see that fee calculation is different for every type of message. But, each type has the simplest calculation possible. As an example, the gas fee is calculated as below:
gas-fee = (10 + b) * gas-price,
where b is the instruction length in bits, and gas-price determines the cost of each unit of gas in nanoVENOMs.
In the sixth section, they introduce the Threaded Solidity (T-Sol) programming language, which is the asynchronous dialect of solidity programming language. If you are planning to build on the Venom blockchain, I recommend you not to learn T-Sol from me :)). Instead, go to Venom Foundation Docs, and see their instructions for their blockchain.
The next section talks about the ecosystem and tokenomics of the Venom blockchain. They believe that this blockchain can become one of the most-used and greatest blockchains in the future. So they see the below components as their ecosystem, for now:
Venom Wallet,
Venom Scanner,
Venom Pools,
Venom Bridge,
Web3World, and
NFT marketplace.
In the next part, we see they are talking about the Venom token, VENOM. As mentioned before, VENOM’s utilities are:
Incentives for validators,
Protecting against Sybil attacks,
Delegated staking, and
Governance.
Unlike ETH, VENOM is subdivided into 10^9 smallest transferrable units, nanoVENOM. There is no total supply associated with VENOM, since it has an inflationary model for now. They announced that they are working to transition to a deflationary model. Even though there is no total supply, there is an initial supply of 7.2 billion VENOM tokens. This initial supply is distributed by the table below:
The next section talks about their target market, which mainly consists of financing. In their whitepaper, the word “CBDC” (Central Bank Digital Currency) is mentioned a lot. If you are not familiar with this concept and its advantages and demerits, I recommend this other article of mine.
After this section, we can see a governance section that mentions how the whole system will govern. The last section has some content about the launch of the program and its roadmap.
In stage 0 there will be a Proof-of-Authority (PoA) consensus mechanism. This mechanism gives a somewhat “centralized” control to the Venom Foundation, since they are the ones that “authorize” the validators. This can help the blockchain to stay secure in the first days when there are not enough validators to secure the network. On the other hand, it gives a lot of power to the Venom Foundation, both in the early and later stages.
When the network becomes stable, enough tokens are distributed to the community, and a sufficient amount of validators apply for the work, it is time for stage 1. In this stage, the security and maintenance of the network will lie on the shoulders of the staking validators.
After enough community validators, the time for the last stage arrives. In stage 2, finally, workchains and the ability of interoperability are introduced, and everything is functional.
OK. Now, we are familiar with the Venom blockchain. It’s time for my own opinion.
I can see the Venom blockchain in the first 200 big cryptocurrencies, in terms of market cap. But, for now, I don’t see it better. Why?
Because, even if the whitepaper looks good, implementing such a project can be a very difficult problem. If the team is capable enough and has some ideas for the problems that I will mention, there is a probability that they even become one of the first 10.
Here are some problems that I saw in the infrastructure and possible solutions for them:
In the whitepaper, I didn’t see anything about the turn of validators on shards. They talked about the block producer validator and a round-robin system. If a validator set is assigned to a shard and never changes, the risk of censorship and fraud can increase. The set can create an alliance and put some faulty transactions in the blocks and approve them. Even if this issue (fraud) is solved with the Masterchain validators, the censorship problem stays still.
Anyways, I introduce an epoch/slot model to solve these issues. In each epoch, with the round-robin system, the block producer changes in the same validator set. And in each slot, containing some number of epochs, a fair randomized selection with respect to the density of the shards happens and shardchain validator sets change in the process. The actual calculations can be a full article, which I can write if the Venom Foundation is interested in it.
I know that there is a problem with data storage and data access if all the validators turn in slots. In the third problem, I will discuss this matter.
The second problem, as mentioned in the whitepaper, is the token inflationary model. They proposed a way to solve it by burning a part of the fees collected. As they fully said in the whitepaper, it is a matter of wait and time to see how the community acts on these chains, and what can be the best possible way to reduce or remove inflation.
The third problem is the same problem that the Solana blockchain faced. Such a blockchain, with this high throughput, will need a lot of storage in no time. Even if a cent of that throughput happens on the network, the storage needed for the whole thing will be tens of terabytes. Solana gave us the best idea. Using Arweave as the archive storage, keeping the latest blocks (snapshots), and maintaining the whole network very light.
With Arweave, a full archive is always available and when the validators turn in between shards, they can have access to those data without even the need to keep them. Every slot can be a snapshot of the whole blockchain in that slot.
https://mirror.xyz/arianaraghi.eth/sh59zcFEjtqE4YSbVhCo1-BO7d7mqUTaWqyve5XpVd0
https://venom.foundation/Venom_Whitepaper.pdf
https://www.investopedia.com/terms/s/sharding.asp
https://docs.venom.foundation/
https://mirror.xyz/arianaraghi.eth/mC2EKISpDMc6jLSQ_DJ06BSg7OCf7TzW6SVtF4yjIOI
https://academy.binance.com/en/articles/proof-of-authority-explained
Let’s start with the concept of layer-0 blockchain before anything else.
Layer-0 (L0) blockchain is a concept that Cosmos Network introduced to the world. This concept brings the idea of interoperability to the blockchain and cryptocurrency world. As a very brief review, let me describe L0s.
A layer-0 blockchain is a blockchain that can connect many layer-1 (L1) blockchains and let them communicate. These blockchains, unlike L1s, don’t accept “smart contracts,” directly. They create an infrastructure, in which many L1s connect and those L1s accept and run many smart contracts. In this infrastructure, inter-blockchain communication is made possible, and miners and validators of these L1 blockchains can easily talk about what is happening in the L1 blockchains.
This brings many possibilities to the blockchain world: dApps won’t need to recreate for other L1 chains; the risk of fraud in between chains can reduce dramatically (if implemented correctly); the need for bridges (smart contracts to connect compatible blockchains) reduces, hence, less smart contract risk; and last but not least, scalability of the inner-join of those chains soars.
For these many reasons, and maybe much more, the invention of the L0 blockchain seems to be a great idea. I can talk a lot about this concept, how it is formed, and how it can benefit the world, but I leave you with this other article of mine, in which I talked about the concept of layer-0 in the introduction.
Now that we briefly understand L0 blockchains, it is time to go look at the Venom blockchain.
The Venom blockchain is an L0 blockchain, designed to have 100,000+ throughput. The Venom Foundation, the creator of the so-called blockchain, claims that this blockchain can have less than $0.0002 for the fee of the transactions. Well, both of these claims are big in this era of blockchain, and I am here to see if they are possible or not.
In their whitepaper, they made a very clear structure of how they are going to make these claims possible. If you are not a fan of long reads, I plan to summarize it here for you.
They started with the current problems that our decentralized world (the blockchain world) faces:
Scalability: the “limited ability to scale and process a high volume of transactions per second” [the Venom whitepaper];
Security: “a comprehensive risk management system for a blockchain network, using cybersecurity frameworks, assurance services and best practices to reduce risks against attacks and fraud” [IBM];
Regulation: “countries have taken different approaches to regulate blockchain and cryptocurrencies” [the Venom whitepaper];
Adoption: “despite the potential benefits of blockchain, there has been slow adoption in industries” [the Venom whitepaper];
Interoperability: “Interoperability refers to the ability of different blockchain networks to communicate with each other and exchange information” [the Venom whitepaper].
With these in mind, Venom introduced “Dynamic Sharding Protocol.” In this protocol, there can be many shards with two fascinating features. They can “split” and “merge”. When a shard gets crowded, it can split. In their actual definition, “If for 100 seconds (~50 blocks currently), the shardchain blocks are at least 90% full (note that these values are configurable and may be tuned in Masterchain),” the split event can be proposed by the validator that is responsible for the block production of that specific shard. After the proposal, the Masterchain validators will evaluate it and accept or reject it. In case of acceptance, the shards split into two shards with exactly half of the account addresses in the previous shard, and each will get its own set of validators, given by the Masterchain validators.
On the other hand, when two--sibling--shards are not crowded enough, they can be merged. Again, in their actual definition, “the sum of the sizes of the two blocks of sibling shardchains, and if, for 100 seconds (~50 blocks currently), this sum does not exceed 60% of the maximal block size, the validators will produce a block with a "want merge" flag (note that these values are configurable and may be tuned in Masterchain).” After this proposal, the Masterchain validators decide on the merge and its set of validators.
These features can make the blockchain able to get bigger if needed, and get smaller if not enough transactions occur on the chains. This can ensure the safety of shards and their scalability.
After this part, they introduced workchains. These chains are L1 blockchains living on shards that can accept and run many smart contracts. There are three types of workchains:
“Public: open to anyone to participate and build on;
Private: intended for specific groups or organizations to use;
Consotium: a collaboration between a group of entities.”
Masterchain is the last “chain” that is introduced. This chain is responsible for everything. It is the backbone of the whole system and the whole security lies in the hands of this layer. All workchains are connected to the Masterchain through shardchains. Everything is finalized and decided in the Masterchain.
In the next part, the consensus protocol is introduced. It uses a combination of Proof-of-Stake (PoS) and the Byzantine Fault Tolerance (BFT). Just like almost any other PoS blockchain, the stakes are to maintain security and get rewarded for good behavior and block production. As mentioned before, there are three types of validator sets:
“Overall validator set: The weight-sorted validator list of all validators chosen to participate in the validation process.
Masterchain validator set: The list of validators with the largest stake is chosen from the overall validator set.
Shardchain validator set: The group of validators chosen from the overall validator set maintains block processing for a specific shardchain.”
Of course, the protocol uses a round-robin system to transfer roles so that a single validator will not stay as the block producer for life, and turns.
It is worth noting that the Venom blockchain does not allow for forks. This means that each and every transaction that gets its way to the blockchain is finalized instantly, and there is no need to wait for a number of confirmation blocks. This is called “deterministic finality.”
After that, there are some specifications of how the components of the consensus protocol are connected and how the consensus is reached.
In the fifth section, a long and specific description of their virtual machine is given. Other than the part about the fee structure, there are no complex concepts that are related to how Venom can be fast and cheap. In the fee structure part, we can see that fee calculation is different for every type of message. But, each type has the simplest calculation possible. As an example, the gas fee is calculated as below:
gas-fee = (10 + b) * gas-price,
where b is the instruction length in bits, and gas-price determines the cost of each unit of gas in nanoVENOMs.
In the sixth section, they introduce the Threaded Solidity (T-Sol) programming language, which is the asynchronous dialect of solidity programming language. If you are planning to build on the Venom blockchain, I recommend you not to learn T-Sol from me :)). Instead, go to Venom Foundation Docs, and see their instructions for their blockchain.
The next section talks about the ecosystem and tokenomics of the Venom blockchain. They believe that this blockchain can become one of the most-used and greatest blockchains in the future. So they see the below components as their ecosystem, for now:
Venom Wallet,
Venom Scanner,
Venom Pools,
Venom Bridge,
Web3World, and
NFT marketplace.
In the next part, we see they are talking about the Venom token, VENOM. As mentioned before, VENOM’s utilities are:
Incentives for validators,
Protecting against Sybil attacks,
Delegated staking, and
Governance.
Unlike ETH, VENOM is subdivided into 10^9 smallest transferrable units, nanoVENOM. There is no total supply associated with VENOM, since it has an inflationary model for now. They announced that they are working to transition to a deflationary model. Even though there is no total supply, there is an initial supply of 7.2 billion VENOM tokens. This initial supply is distributed by the table below:
The next section talks about their target market, which mainly consists of financing. In their whitepaper, the word “CBDC” (Central Bank Digital Currency) is mentioned a lot. If you are not familiar with this concept and its advantages and demerits, I recommend this other article of mine.
After this section, we can see a governance section that mentions how the whole system will govern. The last section has some content about the launch of the program and its roadmap.
In stage 0 there will be a Proof-of-Authority (PoA) consensus mechanism. This mechanism gives a somewhat “centralized” control to the Venom Foundation, since they are the ones that “authorize” the validators. This can help the blockchain to stay secure in the first days when there are not enough validators to secure the network. On the other hand, it gives a lot of power to the Venom Foundation, both in the early and later stages.
When the network becomes stable, enough tokens are distributed to the community, and a sufficient amount of validators apply for the work, it is time for stage 1. In this stage, the security and maintenance of the network will lie on the shoulders of the staking validators.
After enough community validators, the time for the last stage arrives. In stage 2, finally, workchains and the ability of interoperability are introduced, and everything is functional.
OK. Now, we are familiar with the Venom blockchain. It’s time for my own opinion.
I can see the Venom blockchain in the first 200 big cryptocurrencies, in terms of market cap. But, for now, I don’t see it better. Why?
Because, even if the whitepaper looks good, implementing such a project can be a very difficult problem. If the team is capable enough and has some ideas for the problems that I will mention, there is a probability that they even become one of the first 10.
Here are some problems that I saw in the infrastructure and possible solutions for them:
In the whitepaper, I didn’t see anything about the turn of validators on shards. They talked about the block producer validator and a round-robin system. If a validator set is assigned to a shard and never changes, the risk of censorship and fraud can increase. The set can create an alliance and put some faulty transactions in the blocks and approve them. Even if this issue (fraud) is solved with the Masterchain validators, the censorship problem stays still.
Anyways, I introduce an epoch/slot model to solve these issues. In each epoch, with the round-robin system, the block producer changes in the same validator set. And in each slot, containing some number of epochs, a fair randomized selection with respect to the density of the shards happens and shardchain validator sets change in the process. The actual calculations can be a full article, which I can write if the Venom Foundation is interested in it.
I know that there is a problem with data storage and data access if all the validators turn in slots. In the third problem, I will discuss this matter.
The second problem, as mentioned in the whitepaper, is the token inflationary model. They proposed a way to solve it by burning a part of the fees collected. As they fully said in the whitepaper, it is a matter of wait and time to see how the community acts on these chains, and what can be the best possible way to reduce or remove inflation.
The third problem is the same problem that the Solana blockchain faced. Such a blockchain, with this high throughput, will need a lot of storage in no time. Even if a cent of that throughput happens on the network, the storage needed for the whole thing will be tens of terabytes. Solana gave us the best idea. Using Arweave as the archive storage, keeping the latest blocks (snapshots), and maintaining the whole network very light.
With Arweave, a full archive is always available and when the validators turn in between shards, they can have access to those data without even the need to keep them. Every slot can be a snapshot of the whole blockchain in that slot.
https://mirror.xyz/arianaraghi.eth/sh59zcFEjtqE4YSbVhCo1-BO7d7mqUTaWqyve5XpVd0
https://venom.foundation/Venom_Whitepaper.pdf
https://www.investopedia.com/terms/s/sharding.asp
https://docs.venom.foundation/
https://mirror.xyz/arianaraghi.eth/mC2EKISpDMc6jLSQ_DJ06BSg7OCf7TzW6SVtF4yjIOI
https://academy.binance.com/en/articles/proof-of-authority-explained
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