Decentralization in Proof-of-Stake is a multifaceted topic. Many theories and designs have been suggested in the wider ecosystem on how a PoS system may decentralize power over multiple entities. The Cosmos Hub is one of few of these experiments that has been live for a couple of months. The following analysis covers stake distribution and diversification on the Cosmos Hub and aims to shine some light on how token holders have actually engaged with this early PoS network.
In a PoS network, the way token holders decide to participate in staking influences power distribution in the network. Do holders stake tokens themselves, do they pick one validator and stick with it, or do they diversify across validators? Diversifying stake should come with benefits: it lowers the impact a slashing would have on the token holder and helps to support different entities, thus strengthening decentralization and the ecosystem in general.
To find out how Atom token holders are participating in staking, I took a snapshot of data from the 5th September using the Stargazer API (thanks to Certus One for providing this API). The data takes into account all active delegations, as well as their size and the corresponding delegator and validator addresses. It should be noted that addresses don’t equal entities, there could be holders that hold their funds in different addresses, or holders that share addresses (exchanges/custodians), which will not be reflected in the following analysis.
Let’s start with a summary of the snapshot data. In total, at the time of the snapshot, 177,771,881 Atoms were being staked. The snapshot contains 11,387 active delegations from 6,459 addresses on the Cosmos Hub, which means the average address has 1.76 active delegations. From that we can already see that a large number of holders don’t seem to diversify.
Before we go more in-depth regarding stake diversification, let’s first consider the stake distribution. The following graph shows Atoms at stake with validators ordered by stake and colored according to the commission rate bracket that the validator belongs to (5% or lower, between 5–10%, and greater than 10%).
Looking at this we can see that the largest validators either charge a low commission rate below 5%, while others charge above 10%. These often signify funds that validate their own stake, or providers that focus on larger holders. Looking at the validator set ranked by stake visualizing the amount of addresses that delegate stake to them, we can see that low fee validators are popular especially among smaller holders. The top 3 validators by number of delegations charge no or a low fee:
This graph also contains some interesting outliers: e.g. Huobi Wallet on rank 43 has delegation from 636 addresses. Similarly, Coinone Node on rank 15 has 745 delegators. Both of these are exchange run validators. Another interesting mention is Cosmostation at rank 7, who managed to attract 678 delegators to their validator with a 12% fee, potentially a result of their successful wallet.
Now that we got an overview of stake distribution among validators, let’s take a closer look at delegations and the addresses they are coming from:
This data contains some interesting insights. For one, only about a quarter of addresses actually diversify their stake, but together these addresses account for about 64% of the total stake. What this means is that addresses that diversify on average hold about 5 times as many Atoms as those that don’t, providing us with insights that diversification is more popular with larger holders.
Taking a closer and counting the number of addresses given how many active delegations they have (n), we see a swiftly declining curve. While there are still 786 addresses with 2 delegations and 347 with 3; addresses with more than 5 delegations become very rare. There are a few interesting outliers that were cut off this graph. Specifically, an address maintained by B-Harvest sports 119 delegations with low Atom amounts that were carried for tracking purposes. 6 other addresses with seemingly similar patterns (<500 Atoms across 67 to 83 validators) exist.
Finally, if we visualize the Atom amount staked by addresses sorted by the number of validators they diversify amongst, we are presented with some more data points that stand out:
The peak of holdings with 36 delegations is from the Tendermint team address, which stakes ~21 million Atoms. Another peak with 46 delegations and ~7 million Atoms at stake is due to the ICF address. The most diversified address with significant holdings delegates to 51 validators. The two peaks with 16 and 18 delegations also signify well-diversified large holders.
In conclusion the data presented clearly indicates that Atom holders largely don’t diversify across multiple validators. In addition, we also saw a preference for low fees among smaller holders.
Our team at Chorus One believes that stake diversification is important to create a thriving validator set that engages with the network and contributes to ecosystem growth. It might be that currently token holders don’t care about diversification, are unaware of benefits, or that it is simply too hard, or not worth the effort to diversify (low slashing risks, diversifying requires increased research on validators, bad UX of having to carry out multiple transactions to delegate and to withdraw rewards,…).
We are researching ways to make participating in staking and diversifying easier. Join our Telegram to discuss and let me (@FelixLts) know what else you’d be interested in for future analysis. Interesting extensions could be to expand on differences between whales and small holders or to take a look at other Proof-of-Stake networks (e.g. Tezos). If you have a dataset for other PoS networks or want to help obtaining the relevant data please reach out.
Originally published at https://blog.chorus.one on September 10, 2019.
This article is an overview of staking on the Terra network. It covers risks to consider and rewards to expect, as well as how to participate.
First, let’s start with a basic description of what the Terra network is. Terra centers around an economy of price-stable cryptocurrencies that are integrated into various applications and processed on the network, e.g. via their mobile payment application CHAI. The network’s token Luna ($LUNA) mainly fulfills three purposes:
Luna is used…
The Terra protocol includes an automated market maker, a mechanism designed to algorithmically guarantee that Terra stablecoins stay at their desired peg. This is achieved as follows: the protocol enables arbitrageurs to exchange stablecoins and Luna at a fixed peg rate, which allows them to profit from deviations in the market. The protocol automatically mints or burns Luna tokens (expanding or contracting the supply) depending on how external parties interact with the protocol. Terra relies on arbitrageurs exchanging tokens with the automated market maker and trading on the open market to dynamically return Terra stablecoins to their peg. There are multiple resources that cover this mechanism in-depth, e.g. our whitepaper walkthrough or the official documentation. A key insight is that Luna is used as the lender of last resort should a stablecoin lose its peg downward. Luna holders are diluted to absorb this type of volatility.
The Terra design counters this in multiple ways. For one, rewards earned from transactions processed in the network are distributed to those staking Luna tokens. A larger portion of Luna tokens staked results in a larger share of the tx fees received. Transactions on the network charge a 0.1–1% fee per tx (capped at 1 TerraSDR). The percentage dynamically adjusts based on the demand for transactions on the network to smoothen economic cycles. Rewards are largely received in stablecoins, as most transactions on the network happen denominated in stablecoins.
Additionally, the protocol charges a small spread for atomic swaps between Terra stablecoins. These fees are distributed to validators that correctly vote on Terra price oracles (more below). Atomic swaps are capped to limit the volatility in Luna supply. Currently, the spread taken increases linearly from 2% up to 10% when the daily cap is reached.
Furthermore, the protocol also burns a portion of Luna (currently 5%) sent to the protocol when issuing Terra stablecoins. Burned Luna indirectly rewards Luna holders by contracting the overall supply. The official Terra documentation expands on these topics.
Finally, a recent change introduced an equivalent of block rewards to support the staking ecosystem while the network is in its growth phase. A community initiative that pays out a part of the Luna treasury to those staking was implemented. In the first year 21.7mn Luna have been committed to this effort. This corresponds to a ~10% staking yield at the current staking ratio (at the time of writing there are ~225mn Luna at stake, see e.g. here). In total 100mn Luna have been committed to keep staking yields competitive in the short to medium term. You can learn more about Project Santa here.
The Terra protocol includes a sophisticated oracle design to maintain the exchange rate between stablecoins and Luna. This design is still in flux. Core to it is that validators cast votes on price feeds and receive rewards from swap fees based on the correctness of their votes (measured by considering deviations from the median of all votes).
Finally, Terra uses the remaining seigniorage (Luna sent to the protocol for minting stablecoins) to stimulate growth of the Terra economy. This is out of scope for this article (more on this can be found here or in the whitepaper).
The following will focus on summarizing the factors that have an influence on the staking lifecycle, as well as provide details on the currently implemented values that need to be considered.
As Terra is using a design similar to that of the Cosmos Hub, refer to our more comprehensive Cosmos Staking Primer in case you are new to staking or unclear about what is meant with some of the following terms.
Automatic Unbonding. There are scenarios in which delegators unbond from their validators and stop earning rewards from staking as a result. In all of these cases, delegators need to manually stake their tokens again. Scenarios are:
To stake Luna, you need to first obtain $LUNA tokens. CoinGecko e.g. lists available exchanges. The easiest tool to stake your Luna currently is through the official Terra Station wallet. The Terra team released this guide that walks you through the wallet. Terra Station will soon also have Ledger support, meaning you can store and stake your Terra tokens on a Ledger.
Chorus One is operating a highly available and secure validator on the Terra network. Stake today to start earning while supporting our work. Visit our website to learn more about our Terra validator!
To re-iterate, returns from staking Luna depend on a variety of factors. Some of which are dependant on the performance of the validator you choose to delegate to, others depend on network activity and various parameters in the protocol. Do due diligence on the project and validator(s) you aim to delegate to. Take into consideration the various implications described in this article before obtaining and staking Luna.
Many of the variables described in this post are subject to change and will be governed by Luna holders to optimize for the success of the Terra economy. At Chorus One, we are excited to contribute to the success and health of the Terra network. By staking with our validator, you are supporting our contributions and the effort we put into helping Terra succeed. Follow us on Twitter or join our Telegram to stay informed and in case you have questions!
Terra Website
Official Terra Documentation (best to understand the actual protocol)
Terra Agora Forum
Chorus One Terra Whitepaper Walkthrough
Chorus One Interview with Terra Co-Founder Do Kwon
Originally published at https://blog.chorus.one on August 28, 2019.
Human economic relationships have been based on the same basic principles for thousands of years.
An over 4,000 year-old tablet discovered in Mesopotamia, present-day Iraq, depicts an arrangement about the payment of corn, the currency of that era. This is the first recorded history of what we call a surety bond today.
Portrayed on the tablet are three parties: the first party is the obligee, who is expecting a payment of corn at some later point in time. The second party is the principal, who is supposed to fulfill this obligation. The obligee requires a guarantee from a third party, the surety, should the principal fail to meet their obligation. This guarantee is called a surety bond. Surety bonds are commonly requested to ensure contractual promises are met. They are usually obtained in exchange for annual premiums to account for the risk of the principal failing to meet their obligations.
But what does all of this have to do with Proof-of-Stake (PoS)?
In some sense, stake in a PoS network is a type of surety bond:
By staking tokens with a validator, a token holder is providing a surety bond to the protocol that this validator will meet his obligation to stay online and to faithfully validate transactions. The token holder provides this surety bond in expectation of future premiums; the staking rewards. In PoS networks with slashings, the protocol can claim a part of the surety bond should the principal (the validator) fail to meet his obligations, e.g. by going offline or double-signing. The difference between common forms of a surety bond and a PoS protocol is that premiums aren’t paid by the principal, but by the obligee (the protocol) itself.
Let’s fast forward a few thousand years and find out how these fundamental economic principles made it into the world of distributed systems and digital assets.
Pro tip: from here on developments in PoS can be followed along in the Staking Economy newsletter ;)
I hope this article helped you to understand the key milestones in the history of Proof-of-Stake!
Even though there is already a rich history of work around Proof-of-Stake, we are still at the very beginning. The pace of innovation is rapidly accelerating and many interesting experiments are and will be conducted. Some examples include: Polkadot’s Nominated Proof-of-Stake algorithm, anti-correlation penalties, exchange staking, as well as designs that will allow staking positions to unlock their full economic potential (e.g. delegation vouchers).
The next few months and years will show which PoS design will help enable a secure, decentralized, and performant blockchain network.
We will see the staking and decentralized finance space merging and hopefully will be able to avoid some of the outcomes that made so many fall out of love with the legacy financial ecosystem. I remain hopeful that the crypto community can solve this puzzle and create more sustainable systems for human collaboration.
Follow Chorus One on Twitter and give our podcast a listen (there’s an episode dedicated to this article)!
Originally published at https://blog.chorus.one on August 9, 2019.
This week we witnessed the first slashing on the Cosmos Hub. A misconfiguration of one of the validators led them to double-sign a block, which the Cosmos Hub punishes with a 5% slashing of staked Atom deposits:
While in this case, the slashing was neither the consequence of an attack on the network nor the result of a compromised validator key, it demonstrates that slashing is real and that validators should carefully design their infrastructure to mitigate the risk of losing their own and their delegators’ funds.
We have already published a high-level overview of our architecture earlier, as well as carried out an audit to test if our architecture is at risk to be compromised by outside attackers. Today, we are following the practices of some of our fellow validators (notably Iqlusion, Certus One, and Figment) and release a comprehensive (19-page) overview of our complete validation estate:
We hope that this document will prove helpful to those eager to learn more about building and running validator infrastructure. Our architecture was designed following common security best practices without compromising the ability to scale and onboard new networks and upgrade node software swiftly, even as a distributed organization. In case you are left with questions or suggestions after reading this document, don’t hesitate to contact us on Twitter or through our Telegram community channel!
PS: Some of you that have checked out the document may have wondered why there’s no blurry pictures of our server racks; sadly, our vendor doesn’t allow mobile phones on the datafloor, so have a picture of Roosevelt, our platform engineer’s cat instead:
Originally published at https://blog.chorus.one on July 4, 2019.
Cosmos Bonded Proof-of-Stake is the first major implementation of a permission-less BFT protocol. The well thought out protocol features many nuances ensuring that the Cosmos Hub blockchain is performant and that the security of the system is economically guaranteed even in the presence of malicious actors. Yet, in our view, the design space of Bonded Proof-of-Stake has barely been scratched. It’s important to explore alternative designs that can improve the user experience and the economic potential of Proof-of-Stake.
During the Cosmos Hackathon (Hack4Atom) in Berlin, the Chorus One team in cooperation with Sikka implemented changes to the staking logic in the Cosmos SDK that would allow stakers to increase utilization of their staking positions and additionally allow for a more user-friendly delegation process. These changes will open up a wide range of use cases that, in the current implementation, can only be achieved through custodial counterparties (e.g. exchanges).
We achieve this by creating a representation of staking positions we call “Delegation Vouchers”; validator-specific fungible tokens that can be traded and used in decentralized finance (DeFi) products. The following post aims to lay out the details of our implementation, its advantages, and potential use cases. You can find our implemented hackathon code on Github and a recording from the hackathon presentation itself on YouTube.
We implement a delegation pool for each validator on a Cosmos SDK chain. Instead of directly delegating to a validator, delegators transfer their Atoms to their desired validator’s pool. The pool automatically delegates to the respective validator and accrues rewards on behalf of the collective of delegators. Delegators receive delegation vouchers representing their share of the pool in return. These vouchers are fungible tokens that can be redeemed with the pool to receive their share of the pool’s updated holdings (a fraction of the delegated Atoms + accrued rewards — slashings). This is achieved by tracking a conversion ratio (Atoms/vouchers) between delegation vouchers and bonded Atoms for each validator pool. Accruing rewards increase the conversion ratio, while slashings decrease the conversion ratio.
All staking operations can be modeled using delegation vouchers. The user experience of staking on such a Cosmos SDK chain improves because rewards don’t need to be manually claimed by delegators anymore. Instead, rewards accrue for each validator pool on a per block basis. Unbonding is modeled as the burning of vouchers and receipt of underlying Atoms (calculated as vouchers times conversion ratio) after the unbonding period. Redelegation is modeled as the burning of vouchers combined with the issuance of new vouchers corresponding to the validator that received the redelegation. Newly issued vouchers resulting from a redelegation are non-transferable (frozen) for one unbonding period to make sure delegators remain accountable for infractions that were committed by the validator they redelegated away from.
Delegation vouchers could be traded at a discount bringing liquidity to staked Atoms, e.g. allowing delegators to sell vouchers on a decentralized exchange instead of unbonding. Additionally, delegation vouchers can be used in decentralized finance applications, e.g. as collateral in a DAI-style stablecoin system or in a Compound-like money market protocol. In addition, we believe delegation vouchers could allow for a market-based mechanism of ranking validator quality because delegation vouchers will need to be priced based upon their liquidity and the slashing risk associated with validators. Pools of delegation vouchers can be implemented allowing the creation of diversified tokenized delegation indices such as a Decentralization Index (pictured below). An example would be a Decentralization Index voucher tracking the delegation pattern of the Interchain Foundation. Holders of the Decentralization Index voucher will be able to foster geographic and voting power decentralization without requiring them to pay the mental cost of researching and evaluating validators. These are just a few of the possible use cases. Since one will be able to easily transfer delegation vouchers to other chains via IBC, they will enable permission-less and unbounded innovation.
While delegation vouchers may increase the security of a PoS system because there is less need for unbonding or holding liquid staking tokens, there may also be emergent types of attacks, e.g. a validator shorting his own delegation voucher and double-signing. Implications of this model need to be researched in detail. The model also raises concerns about systemic risk that could potentially arise from multiple usage of collateral. It remains too early to definitely comment on the second and third order effects of such a design.
We will do a more detailed write-up and explore extending functionalities to enable products like staking indices. In the medium term, we would like to explore a proposal to change the staking model of the Cosmos Hub to increase the utilization of staked assets. If you have feedback on our design, please let us know! Reach out to us on Telegram with your comments or if you are interested in collaborating.
Originally published at https://blog.chorus.one on June 20, 2019.
This is Part 3 of a series of posts on the Chorus One blog. Part 1 and Part 2 can be found here and here.
In Part 2 we discussed network effects in the context of the Cosmos Hub. In this post, we will focus on a key innovation in Proof of Stake networks: a mechanism that creates incentives for communities to build network effects.
The NFX venture fund estimates that 70% of the value created by technology startups since 1994 was driven by network effects! So it (a) pays to understand how they work and (b) pays for all stakeholders to go to every effort to nurture them. But network effects are notoriously hard to build. That is why successful startups are known as unicorns: the failure rate is extremely high. For every Uber, there are tens of thousands of “Uber for X” startups that never achieve critical mass, where they can match supply and demand across geographies, offerings etc. When a network effect scales to its full potential, hundreds of billions of dollars of value can be created. But the probability of this happening is very low. The good news is that the expected value across a well-chosen portfolio of networks can deliver great returns (just ask Union Square Ventures).
So what is the connection between Proof of Stake (PoS) networks and network effects?
Last week when I explained the staking economics of a Proof of Stake (PoS) network to a banker friend of mine, he was a little bemused. His intuition of money comes from the “time value of money”. It is the basis for almost everything they do. For bankers, money is created as debt. The person who borrows pays interest. The person who lends gets interest. Money today is better than money tomorrow. So to find out what a future income stream is worth today, you “discount it” by a factor based on the risk involved i.e. by how likely are you to actually get the money. This is at the heart of trillions of dollars of trades every day: bonds, treasuries, repos, CDs, etc. Even stocks are priced based on future income discounted back to today.
The banker’s intuition told him to find out where the interest payment is being made (or more specifically what interest rate — the price of money — was being paid), as this would explain the nature of the transaction and shine some light on the risks being exchanged. But this worldview doesn’t work for a Proof of Stake network and the intuition of the “time value of money” is fundamental to this misunderstanding.
To see why let’s shift back to the tech investor mindset above. Here money is earned based on a principle that we might call “the network effects value of money”. In this worldview, money is not created as debt, nor is the value captured as interest. Wealth is instead created by building a network that provides value to its users and capturing some of that value. As network effects grow according to the square of the user base (or maybe n log n at scale, see Metcalfe’s Law) the best way to build wealth is to scale a network globally. This effect is most mostly clearly visible with centralized networks, e.g. Google Adwords connecting publishers to advertisers, Uber connecting commuters to drivers, and so on.
The reason why crypto is getting so much attention in technology circles right now is that it has the potential to meaningfully reduce the high failure rate of these networks. As we have seen, scaling networks is hard. Anything that reduces this failure rate will increase the expected returns of investing in this space. If it turns out that crypto-powered networks are easier to scale than a typical (non-crypto) two-sided markets like Uber or Airbnb, then crypto networks will out-compete (and eventually take over from) non-crypto networks.
Proof of Stake networks utilize rewards to build network effects. Recognizing that network effects are hard to build, they reward community members that contribute to the network. They ask token holders (aka delegators) to make decisions about who runs the network nodes, via the validator marketplace we discussed in Part 2. By engaging token holders in this way, they incentivize attention through the mix of rewards and slashing. This is interesting from a psychological perspective: ongoing dopamine hits as gains accrue, loss aversion associated slashing risk, an IKEA effect as they are now actively contributing to the running the network. Together these things create a deeply engaged community, who then wants to spend more time on governance, evangelizing the network and contributing to the codebase. Validators, aware that they are being measured by these highly engaged delegators, now compete on the value they can add. So they write blogs and research reports, record podcasts, organize events, and get involved in governance. They build Dapps and tools like block explorers and wallets and contribute to the codebase and protocol specifications.
That is why trying to map crypto rewards in a PoS network to banking terms like interest is doomed to failure. It misses where the value is created and how it is captured. Inflation of PoS token supply is not about interest or yield. Instead, it creates a mechanism to fund public goods and community building on a massive scale. As the value of a network grows faster than the number of participants, this can have a very significant impact on the probability of success. It allows decentralized networks to grow faster with much lower failure rates than any other business model we have seen before.
This is the reason why smart investors have stayed in crypto. With 70% of the value created in the last quarter of a century being attributed to network effects, there are many reasons to believe that crypto-powered network effects will drive much of the growth in the next 25 years.
Stay tuned for more insights into the Internet of Blockchains in Part IV.
We have curated a list of the current top wallets to store and delegate your Cosmos Atoms from. Before diving into the options, I would like to remark that the safest way to store larger amounts of Atoms is on a hardware wallet. There are multiple wallets and tools that allow you to send, delegate, and participate in governance using a Ledger device. But let’s start with our list:
Lunie is the official wallet that was first developed by part of the Cosmos team (then called Voyager). The Lunie team has now spun off as a separate company.
Lunie is available as a web and mobile wallet (in development). There’s also a Lunie browser extension that allows you to securely generate keys. Lunie enables you to safely perform every operation from sending to participating in governance through your Ledger device without having to download additional software.
Find out more at: https://lunie.io/
Evaluation
+ Security audit
+ Web wallet usable with Ledger devices and browser extension
- Mobile wallet can’t store keys yet (in development)
The popular multi-asset mobile wallet with support for ETH, BTC, EOS also has a Cosmos wallet. imToken supports a lot of functions like exchanging tokens, using DApps and now also storing and staking your Cosmos Atoms!
+ Multiple Assets (BTC, EOS, as well as Ethereum and Cosmos assets)
+ Many functionalities (token exchange inside the wallet, DApp support,…)
+ Available on both iOS and Android
+ Security audit
Trust Wallet, the open-source multi-currency mobile wallet, has its own staking platform that also includes Cosmos. The platform allows you to stake from the mobile Trust Wallet application (iOS and Android), as well as from Ledger devices or other wallets that support WalletConnect.
Evaluation
+ Multiple ways to access (Ledger, Trust Wallet, WalletConnect)
+ Support for multiple currencies and applications
- Only supporting a subset of validators and features
This slick mobile wallet is developed by the Korean team at Cosmostation, who also run their own validator and block explorer. The wallet is available as a web wallet, as well as on the Apple App Store and Google Play.
+ Great design and UX
+ Amount of information and features
+ Available on desktop as well as mobile (iOS and Android)
- No security audit
Another mobile wallet from the Chinese team at WeTez, who are already experienced in staking on Tezos. They also operate a validator on the Cosmos network and educate the Chinese community around the staking ecosystem.
+ Support for Cosmos, IRISnet and Tezos
+ Available on both iOS and Android
- No security audit
- No governance features and little information in the interface
There are a variety of tools build by validators to allow for easy staking and governance participation using a Ledger device. These include delegating through the Hubble and Stargazer block explorer and the delegation tool from our colleagues at Staking Facilities, as well as our own tool. The Chorus One tool additionally allows delegators to participate in governance themselves.
+ Easy to use
- Limited features and only Ledger devices supported
There are a variety of wallet options available already today. We recommend storing large Atom amounts on a Ledger device. To do so you will need to have the Cosmos application installed on your Ledger device using Ledger Live. There are also some other wallets in development (e.g. IOV and Lunagram). We are looking forward to trying these out and seeing the wallets and tools mentioned in this article evolve.
Originally published at https://blog.chorus.one on April 26, 2019.
In a post on the Loom blog, I recently wrote about the disruptive potential of crypto in gaming. Loom is not alone in making the realization that gaming is the perfect match for crypto. There are many other teams that aim to achieve what Loom does in different ways. Additionally, Loom faces competition from general purpose blockchains and specialized marketplace platforms for NFT assets.
On the other hand, Loom has already delivered a lot of value and many developers have started to build their decentralized gaming and other applications using the Loom framework. In many ways there are also synergies between “competing” projects.
In this post, I will shortly introduce a few of the main adjacent projects and games that are building on Loom. The whole list of companies in our crypto gaming ecosystem map (pictured below) can be found in our full thesis document on the Loom Network.
The main competitors to Loom are other projects that aim to cater to the same use case as Loom: enabling scalable blockchain gaming. One of the main competitors here is the team at Fuel Games, the creators of games like Gods Unchained that is also building a platform to integrate decentralized assets in games at scale, leveraging state channel technology to ensure high throughput while maintaining low transaction costs.
Another area where Loom is competing in is the area of marketplaces for collectibles and in-game assets (NFTs). E.g. Enjin, who is also starting to compete with Loom on the platform level with their SDK and sidechain network Efinity, is known for their marketplace of in-game assets. Enjin already managed to foster a large community through their wallet and token.
Other competitors of Loom’s marketplace notably include OpenSea and RareBits, both of which provide an interface to browse and trade digital items.
More broadly, the Loom Network as a scaling solution competes with any other project that aims to bring scale to decentralized applications. These include other Ethereum layer-2 solutions that take similar approaches, e.g. Plasma-based efforts like those by SKALE, Matic, or LeapDAO. Any general purpose blockchain implicitly competes with Loom in a way, including Ethereum itself.
Additionally, well-funded general purpose blockchains are also involved in the gaming ecosystem. Examples include EOS and Mythical Games and TRON Arcade, a $100 million commitment by the TRON Foundation to fund blockchain gaming.
Loom is trying to establish as a hub in the emerging network of blockchains by enabling interoperability between their and other major blockchain ecosystems, such as EOS, TRON, and Cosmos. In our interview with Matthew Campbell, this topic was discussed at length. I recommend giving it a listen if you’re interested in hearing about Loom’s strategy from the CEO himself.
Overall the blockchain gaming field is highly contested, and many of the first decentralized applications that saw some adoption have been games ( CryptoKitties). In the face of the alternatives mentioned above, the Loom Network has managed to attract many interesting projects to their platform. Part of this can be traced back to their commitment to build educational resources and tools that they themselves use to develop their own blockchain games. This strategy of the Loom team and their technologies will be covered in detail in another post, in the following I will introduce four games that are currently being built on the Loom Network:
This trading card game is developed by Loom’s in-house game studio utilizing the tools and running on the technologies built by the team itself. As the name suggests, the game plays in a setting where undead creatures battle each other.
The game features Hearthstone-like mechanics with players using decks consisting of (NFT) game cards to defeat their opponents in short, round-based battles. The game is available on iOS, Android, and Steam.
One of the most well-known games being developed on Loom. The game allows you to breed, level up, and equip fantasy creatures (Axies). Axies can also battle other players in the Arena, or go on an adventure together in the story mode.
The world in which Axies live (Lunacia) is controlled by the players. There’s a land sale going on currently in which 25% of the land in Lunacia and various items will be distributed to players.
This strategy game is developed by Experimental and lets players build an empire and an army to try and conquer other players’ empires. The game is completely browser-based with little animated graphics. Players earn resources by building mines and other structures, which can then be used to recruit soldiers to fight.
They are frequently hosting competitions where the best players receive a price, check here for more info.
Neon District is a cypherpunk RPG developed by Blockade Games in which players collect and craft items to fight against evil in a dystopian setting.
Learn more about the game and the “Founder’s Sale” here.
Chorus One is operating a validator on the Loom Network. You can support us by staking your Loom tokens with us and be rewarded for helping to maintain the network. If you’re interested in staying informed about our content around staking and the networks we validate on, follow us on Twitter or join our mailing list below.
Originally published at https://blog.chorus.one on April 16, 2019.
