An Introduction to SKALE Testnet

Jun 9, 2020 5 min read
An Introduction to SKALE Testnet

A Quick Guide & Overview of the Elastic Blockchain Network, SKALE

Hi Readers👩‍💻,

As some of you might know, the SKALE Mainnet is expected to launch soon. We at Stakin, therefore, thought it was time to give you an introduction to this Elastic Blockchain Network. In this article, we’ll take you through everything you need to know about SKALE.

◽️ Part 1 — What is SKALE?

In a nutshell, the SKALE Network is an “elastic” blockchain network that is designed to be interoperable with Ethereum. The network aims to resolve the technical scalability, user experience, and cost issues associated with decentralized networks. Additionally, SKALE is designed to bring an application-specific architecture to developers, which will improve configurability and modularity.

Now, what does that mean? The network aims towards solving the limitations blockchain technology currently has in relation to speed and capacity. It also works towards improving the user experience, making the platform and its applications easy to use for the mainstream public. Using SKALE, developers can easily provision highly configurable sidechains that are compatible with Ethereum, can process smart contracts, and support up to 2,000 TPS per chain. On SKALE, decentralized applications can serve up to hundreds of millions of users, seamlessly and securely. Current blockchains are relatively slow because of the need for every single node to validate and store the same information. So, increasing the number of nodes improves security within those blockchains, but it doesn’t improve processing speed.

SKALE has used horizontal scaling to run thousands of nodes. An increase in the number of nodes contributes to an increase in capacity, speed, and security. In the network, DApps are using subsets of thousands of nodes. Thousands of these subsets can serve thousands of DApps in parallel. Nodes within each subset are randomly selected and are interchangeable. This model is also referred to as Randomness Rotation Incentives (RRI), see the image below.

Image first published by SKALE

An Elastic Blockchain refers to a network on which nodes can be partitioned into different subnodes. Each can then participate in numerous Elastic Blockchains or Sidechains. The nodes core or the “original” node, makes sure node computation and storage resources are in order so it can allocate and deallocate virtualized subnodes. Moreover, the node core also monitors uptime and latency of the randomly assigned nodes and reports these metrics to the SKALE manager — which we will address in the following paragraph.

The selected subnodes are dynamically sized, they participate in SKALE Consensus, run storage and Ethereum Virtual Machine (EVM), and make interchain communication possible. The image below illustrates the different roles of the validator nodes within the network.

Image first published by SKALE

The SKALE Manager is located on the Ethereum Mainnet. Its purpose is to serve as an entry point to all other smart contracts within the SKALE Ecosystem. This smart contract manages the orchestration of all entities in the network, including the creation and destruction of Elastic Sidechains and nodes, as well as withdrawals and rewards.

🕵️‍♂️ Part 2 — Consensus and Governance

The SKALE Network is based on the Proof-of-Stake Consensus, which entails that each node must stake a predetermined amount of SKALE tokens to be slashed at the citation of any activity that is not allowed by the network. And just as in the case of traditional PoS, holders of SKALE have the option to delegate their tokens to any node in the network — that doesn’t already own the maximum number of tokens — to stake/delegate.

SKALE is currently using a PoS variant of Moustefaoi et. al consensus, we won’t go into detail as to what this consensus entails. All you need to know for SKALE consensus is that this protocol allows for a leaderless, asynchronous, and byzantine fault-tolerant (BFT) network.

  • BFT — is the standard for security in distributed systems. BFT helps to guarantee that the network can always reach consensus, even when a third-party is malicious.
  • Asynchronous Protocol — this protocol recognizes latencies of nodes and the network, which allows messages to take an indefinite period of time to be delivered.
  • Leaderless Consensus — leaderlessness mitigates the possibility of collusion amongst network participants by ensuring that all have an equal chance to propose and commit new blocks.

🧐 Governance

SKALE Network is a project from the N.O.D.E. Foundation, and they will deliver a collection of IP, money, assets, and power to the Foundation. The Foundation partners with SKALE Labs Inc. and other entities around the world to develop the Skale Network. The N.O.D.E. Foundation will release control upon network Mainnet launch, to a decentralized governance model for Network Governance.

  • SKALE Labs, Inc. is the core team supporting the SKALE Network. Their mission is to make it quick and easy to set-up a cost-effective, high-performance sidechain that runs full-state smart contracts that are compatible with Ethereum.
  • The Network of Decentralized Economics (N.O.D.E.) Foundation is a non-profit with the mission of supporting the SKALE Network open source project.

The N.O.D.E. Foundation will further support the network by electing Network Representatives, who are selected among DApp developers who run SKALE Chains, validators who run SKALE Nodes, and independent parties such as investors that helped to kickstart the network and developers that actively build and maintain the codebase. The representatives will support the community by facilitating on-chain voting, grants, and budget/treasury decisions. For now, the representatives are selected by the Foundation, however, in the future, on-chain elections will be held at which token holders can select their preferred representative through voting.

SKALE governance follows a Delegated Stake Model. This means that a stakeholder can participate in governance by voting with its stake or delegating voting power to validators. The standard voting model that will be used is a simple majority vote of stakes that participate in the voting.

  • A Proposal will include a 14-day voting period.
  • SKALE tokens committed to a 90-day “Committed and Formalized Stake” are eligible for voting on key issues.

💰 Part 3 — The Token

The native digital asset of SKALE is simply called the SKALE Token (SKL). The digital asset lets you stake as a delegator, work as a validator, and access a share of resources by deploying and renting an Elastic Sidechain for a period of time as a developer. If you’re interested in buying SKL you can do so by signing-up for the auction here.

The initial supply of SKL digital assets is 4,550,000,000. The total limit is currently set at 7 billion tokens. Moreover, the SKALE Foundation will be running nodes but won’t be taking any rewards. Rewards will be shared with the Validator Community. Rewards will be calculated end of every month based on the validator node performance.

  • There is no un-bonding period.
  • Keep in mind that 35% allocated to Network Supporters who purchase tokens prior to Network Launch with the intent of running Validator Nodes or using Elastic Sidechains for their dApps. All are locked for periods of 6–36 months following network launch.
  • Nodes can be slashed, however, they won’t be slashed for poor performance.

More Information & Sources

DISCLAIMER: This is not financial advice. Staking, delegation, and cryptocurrencies involve a high degree of risk, and there is always the possibility of loss, including the loss of all staked digital assets. Additionally, delegators are at risk of slashing in case of security or liveness faults on some protocols. We advise you to do your due diligence before choosing a validator.

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