Avalanche is an open-source platform for deploying decentralised applications in a highly scalable environment. Avalanche takes a ‘network of networks’ approach to scaling and contains from the get-go a smart contracts platform designed for global finance, with near-instant finality. The network infrastructure allows applications to maintain sovereignty on their own “subnet”, while tapping into the Avalanche mainnet for interoperability with other subnets. Ethereum developers can easily build atop Avalanche via the EVM-compatible C-Chain. Through its novel Avalanche Consensus Protocol, Avalanche is able to scale capabilities to a processing capacity of 1,500 TPS (transactions per second) in the C-chain and upwards of 4500 TPS in the X-chain. In summary, Avalanche presents a revolutionary technology both in consensus and horizontal scaling design via subnets.
The main novelty of Avalanche is its approach to scaling, which involves the concept of subnets. A subnet is a set of Avalanche validators and the assignment of one or more blockchains for these validators to validate. There is a mainnet, or Primary Network, which consists of all Avalanche validators and that are assigned the P-chain, X-chain and C-chain to validate. As mentioned before, the C-chain is the smart contracts chain that is EVM-equivalent. The X-chain is an UTXO DAG-based chain specially tailored for high-speed asset transfers. The P-chain is perhaps arguably the most important one as its job is to maintain the coordination of validators and delegators on all subnets.
Other subnets are therefore subsets of the mainet validators that are assigned additional blockchains to validate. The reasoning behind this design decision is brilliant: Instead of having one chain accomplish everything in the Avalanche ecosystem, each “sub” blockchain can specialize for a certain use case.
In the meantime, the platform is expanding and enabling developers to launch their own customizable blockchains. Distributing activity over several chains keeps the Avalanche platform dynamic and flexible, enabling it to meet the blockchain’s trinity of decentralisation, security, and scalability.
Avalanche delivers even more in terms of technology by regularly releasing open-source code in the form of VMs ready to be picked up by projects looking to jump in in the subnet movement. @DeFiKingdoms is an example of a live subnet.
Other projects in Avalanche may soon start to shift to the subnet environment. For instance, liquid staking via BenQi (sAVAX) with three more solutions coming up: Lido on Avalanche, LAVA, and Eden Network + YieldYak. There is also a competitive DeFi landscape which may do the same, with TraderJoe (DEX), Platypus (stable swap), Aave (lending) and many others.
Becoming a validator in Avalanche requires expertise and a bonded stake. It would be troublesome if being a validator on the Avalanche network was free since a bad actor might start a large number of nodes that would be queried often. A node must bond (stake) something valuable in order to become a validator (AVAX). The more AVAX bonds a node has, the more often that node is requested by other nodes. A node’s sampling of the network is not uniformly random. It is rather weighted by stake quantity. Nodes are encouraged to be validators because they get a reward if they are sufficiently accurate and responsive when validating. Chorus One behaves in this way, helping to secure Avalanche. Users can delegate to Chorus One to and share the rewards.
Validating Rights: The weight of validators is determined by the amount of staking tokens bonded as collateral.
Token distribution and inflation of 9.2%.
Reward Rate: Rewards are paid out at expiracy of the validation contract provided the validator uptime as seen by the network is above 80%.
Chorus One Commission: 2%
Staking Limits: The maximum weight of a validator (their own stake + stake delegated to them) is the maximum of 3 million AVAX and 5 times the amount the validator staked. For example, if you staked 2,000 AVAX to become a validator, only 8000 AVAX can be delegated to your node total (not per delegator)
Slashing: No slashing. A validator will receive a staking reward if they are online and respond for more than 80% of their validation period, as measured by a majority of validators, weighted by stake. You should aim for your validator be online and responsive 100% of the time.
Re-Staking: You need to withdraw rewards and re-stake them with some frequency if you want to make use of compounding returns hence, additional delegation is needed for compounding.
Staking Guide: To read a step-by-step guide on how to stake AVAX, click here
Covalent is a protocol that collects data from various blockchain networks. Covalent attempts to gather granular information stored inside smart contracts that isn’t available with current technologies by completely indexing whole blockchains and accessing their data via a single API. In this way, Covalent wants to help developers have a better grasp of the whole blockchain ecosystem. Users will even be able to incorporate private business data after all blockchain data is indexed.
Covalent is gradually decentralizing and that will allow the Covalent Network to be owned and controlled by its users with the use of the CQT token:
Covalent is already demonstrating a wide range of applications. From taxation, where a trader can immediately obtain a CSV file of their transaction data, to NFTs, where NFT applications like ChainGuardians and Ethermon are now employing the Covalent API to not only enable innovative features unique to each project but also to enhance user experience.
To provide broader access to blockchain data, multiple roles such as validators, block-specimen producers, indexers, storage request responders, and others are required for data retrieval, storage, and query procedures. Learn more about them here. Covalent brings a great value to web3 developers and users and we’re excited to contribute as Block Specimen Producers, ensuring the accuracy of the distributed data.
About Staking on Covalent:
Validating Rights: The weight of validators is determined by the amount of staking tokens bonded as collateral.
Inflation and Distribution ($1Bn CQT):
- Seed: 10 %
- Ecosystem: 20%
- Private sale: 20.4%
- Private sale II: 2.9%
- Public sale: 3.4%
- Team: 14.4%
- Advisors: 2%
- Reserve: 18.9%
- Staking: 8%
- There will be a 2% inflation per year for 4 years.
Reward Rate: The amount of CQT that is rewarded per epoch (24 h). Learn more about staking CQT here.
Chorus Commission: 7.5%
Withdrawal Delay: 28 days for delegators and 6 months for operators.
Staking Limits: There is a ratio (currently 6:1, it will be upgraded to 10:1 in the short term, then up to governance) determining how much delegation an operator can receive on their own stake, ensuring operators have skin in the game. In addition, there are max. stake limitations in place to avoid centralization and to ensure the network grows in conjunction with its maturity.
Slashing: Currently, there is no slashing on the Covalent Network. Until slashing is live, network operators who produce Block Specimens with invalid proofs won’t receive rewards.
Re-Staking: Delegating is non-custodial. While CQT is held in the staking contract, it is only the owner of the respective staked CQT that can interact with it.
Evmos is aligning developer and user incentives to bring Ethereum-based apps and assets to the interoperable networks of the Cosmos ecosystem.
Evmos is an EVM-compatible Cosmos SDK blockchain allowing developers to have all of Ethereum’s desired features while also benefiting from Tendermint fast finality and other benefits that a custom Cosmos SDK blockchain brings. Evmos is connecting the Ethereum and Cosmos ecosystems via a bridge to Ethereum and by utilizing the Inter Blockchain Communication Protocol (IBC).
Evmos is built on Tendermint Core, which depends on validators like Chorus One to commit blockchain blocks. These validators participate in the consensus mechanism by broadcasting cryptographically signed votes. Validator candidates can stake their own tokens and have others “delegate” them. The EVMOS is Evmos’ native token. You can stake with us to share our rewards. Evmos launches with 150 validators. The top 150 applicants with the largest stake become Evmos validators.
Executing the Tendermint consensus protocol will yield validators and delegators Evmos as block provisions and tokens as transaction fees. Initially, transaction fees will be paid in EVMOS, however, in the future, any Cosmos token can be used if whitelisted by governance. Validators establish a commission on delegate fees as an incentive. Token holders are responsible for steering and governing the network, including e.g. determining applications that should be incentivized with EVMOS tokens.
As previously stated, the dApps that will be available on Evmos can include everything currently on Ethereum and beyond. For example, AAVE is expected to be launched on Evmos. The introduction of Aave on Evmos will allow for an increase in user activity while also filling the demand for a dependable lending protocol on Cosmos. The core team also stated that they are currently working with Chainlink to implement Aave V3 functionality before the mainnet launch later this month. Other examples of applications on Evmos include NFTs and decentralized exchanges — such as Diffusion or Exswap.
Validating Rights: The weight of validators is determined by the amount of staking tokens bonded as collateral.
Inflation and Distribution: Over the first four years the newly minted tokens will be distributed, at each block, in the following way:
There will be no limit on token minting. Over 300M EVMOS will be coined in the first year and 1 billion in the first four meaning inflation after network launch is high.
Reward Rate: 7 seconds block production distributes the rewards. Variable APY (at the time of writing above 500%, check the official dashboard for current values)
Chorus One Commission: 5%
Target staking rate: 50%
Withdrawal Delay: 2 weeks, no rewards are earned during this time
Slashing: A validator missing more than 95% of the preceding 10,000 blocks will result in a slashing of 0.01%
Re-Staking: Manual, must be withdrawn from accrual pool
Additional details: Coinbase guide
Background
At Chorus One, we see blockchains and decentralised networks as paths to create a more free and prosperous world. At the end of 2017, the co-founders Brian Crain and Meher Roy recognized that Proof-of-Stake allowed a future of many different, interoperable blockchains. They felt that running infrastructure for those networks was an important role at the core of network operations, performance, and governance.
We were there at the genesis of the staking industry during the first of its kind incentivized testnet for the Cosmos Hub, Game of Stakes, a little over 3 years ago. In the meantime, staking has become our core business securing billions of crypto-assets across 28 decentralised networks. The market capitalization of all PoS assets has grown to $320bn, of which around ~68% has been staked. 9 of the top 20 assets use an underlying PoS network for consensus and 63 interoperability protocols have been built to bridge assets across PoS networks.
The Changing PoS Landscape
The PoS ecosystem has changed dramatically since 2018. We have seen new innovations like liquid staking, the singular world computer model turn into one with many modular and application-specific blockchains, and Maximal Extractable Value (MEV) become an increasingly relevant topic. At Chorus One, we are aiming to play a key part in innovation in staking. We recognized the importance of the financialization of staking and published an extensive report on the topic in 2020. After helping launch Lido for Ethereum, we took it one step further and built Lido for Solana to build one of the leading liquid staking applications on Solana, where we are also one of the largest validators. We have witnessed a rise in popularity of application-specific blockchains, to the point that there are now an ever-increasing number of networks that have established a connection to Inter-blockchain Communication (IBC) in 1 year. It could be expected that hundreds to thousands of application-specific blockchains could connect to IBC in the next years. MEV has evolved drastically since Phil Daian first released his research and coined the term in 2019. Value extraction is currently dominated by miners on Ethereum (MEV searchers currently pay miners on average >90% of their reward to include their bundles in a block) as most TVL and DeFi activity exist on the Proof-of-Work network controlled by miners. However, with the transition of Ethereum to PoS and alternative PoS networks increasing their DeFi activity, the value captured from DeFi activity will shift from miners to validators and their delegators.
Announcing Chorus One Ventures
Over the past 3 and a half years, we have developed unparalleled expertise in decentralised networks through launching and operating some of the most used protocols in the space. We have experienced what has worked for networks and what has not. We have provided input on token economics, mechanism design, node operation and key management solutions, validator relations, governance structures and GTM strategies. We value projects that we work with and always make sure to contribute in an impactful way. For this reason, we are announcing Chorus Ventures, which will be a $30m fund that is investing in outstanding decentralised networks, protocols and related products. Chorus Ventures will be managed by Xavier Meegan (Research & Ventures Lead), with oversight from Felix Lutsch and Brian Crain. To date, Chorus One has made 26 investments in this space.
Our Thesis
Chorus Ventures is investing in Proof-of-Stake networks, interoperability and middleware protocols and products. We believe at least 10% of humanity’s economic activity will run through PoS in 10 years' time bringing freedom and prosperity through open and transparent decentralised networks. We leverage our multidimensional relationships with network ecosystem participants and expertise in node infrastructure operations to connect and secure our portfolio of networks.
Chorus One secures PoS networks via operating reliable node infrastructure. Since 2018, we have participated in the launch of many Proof-of-Stake networks. We expect the growth of the PoS ecosystem to continue for many years. The Ethereum Proof-of-Stake merge is imminent, other Layer 1s see rapid increases in activities, and many teams choose to build their own application-specific Proof-of-Stake blockchain instead of a smart contract application. We back the strongest teams building PoS networks. We have already backed teams such as Osmosis, Celestia, Sommelier, Nym and Stargaze.
As a part of our investment focus in PoS, we aim to back teams that are innovating to onboard the next bn+ users into the ecosystem. We see liquid staking and staking tooling (e.g. UX improvements, wallets,…) as two key accelerators to PoS adoption. We have previously backed innovative products and protocols improving staking such as Lido, Obol, Anchor, and Steakwallet. We are in the early stages of innovation in PoS and we expect teams will continue to discover new optimisations, UX improvements and ways to combine staking with DeFi to improve capital efficiency and security for networks for years to come.
As the number of PoS networks continues to expand, interoperability tools must be developed to connect them to ensure a truly efficient peer-to-peer economy. Node operators that validate on many networks are best positioned to support and foster the growth of interoperability because they can use existing infrastructure to enable communication between PoS networks of any kind. For this reason, interoperability has been a key focus for Chorus One. Over the past 3 years, we have built components for trustless bridges into the IBC ecosystem, as well as operated nodes for and invested in multiple interoperability projects including Axelar, Connext, and Biconomy. We believe that we are entering into the very early stages of a modular, multi-chain future and interoperability will be necessary to connect all ecosystems together.
Middleware protocols provide common services and capabilities to applications outside of what’s offered by the underlying PoS network. Essentially, middleware is anything that can be utilised by developers to build their decentralised applications (dApps) more efficiently by using services such as indexing, oracles, cloud, analytics, storage, RPC node infrastructure, and more. A lot of middleware is focused on data and how dApps access it. If it weren’t for middleware, dApps would be limited to only using data that is readable on the network it was built on in an inefficient, computation-heavy way. Middleware is the crucial layer of the stack that improves the performance of dApps by connecting them to the network layer in a smoother way. Node operators in the middleware layer play a crucial role in transferring and transforming data between the network and application layers. We have previously backed middleware networks such as Covalent and have operated middleware networks including Chainlink and The Graph for years.
Why Partner with Chorus One?
As a node operator, we are there on the ground with you from the beginning until the end. We strive to continuously contribute to a network at all stages of its lifecycle. Whether that be from our platform team about node operation best practices or researchers about token economics and mechanism design — we have resources who can advise across all levels of the stack. We actively participate in governance on 30 decentralised networks and care deeply about fostering productivity when committing to a network (or protocol). We uphold values of radical transparency, continuous improvement and kindness. We aspire to partner with projects that share our values.
Reach out
If you are seeking funding for your project and want to work with Chorus One, we would be delighted to hear from you.
Reach out to ventures@chorus.one to begin your next venture journey with us.
