Objective: Deliver Network of Momentum Phase 1
Our current objective is to transition to NoM Phase 1. We have a basic list of things we need to do in order to successfully deliver Phase 1. I’m here to expand this list and provide some missing pieces of the puzzle.
- Network incentives
- Peer-to-peer layer
- PoW links
- Dynamic Plasma
I’ve started this list with the network incentives point because it is the backbone of a decentralized network. This is the reason why Bitcoin still exists today and will exist in the future as well. I’ll be quoting the original whitepaper to support my views. I’ll use the whitepaper as a reference point and adapt it to our current realities.
“In order for the network to function properly, a cryptoeconomic layer will be put in place for all network participants.”
Bitcoin is a peer-to-peer cash system that runs on a decentralized network of (full) nodes that are maintained and operated by volunteers. During the Block Size Wars, there was an ongoing debate to sacrifice decentralization for better scalability. The wars ended with irrelevant forks appearing and disappearing and Bitcoin surviving and thriving ever since. It survived because it chose the path of small blocks to safeguard the peer to peer network.
Small blocks represent the trade-off made to preserve the status-quo of the current peer-to-peer network that relies on volunteers around to world to operate and maintain it. If the size of the blocks were to be raised back in 2017, the volunteer based p2p network would have crumbled and killed one of the most important properties of Bitcoin: decentralization.
Why? Because running a node in Bitcoin is purely based a voluntary decision. Miners are engaged in the hashing competition, not running decentralized infrastructure. Many blockchains made the fatal mistake to scale too early, putting immense pressure on their underlying, volunteer based peer to peer networks. This totally compromised decentralization in favor of scaling. How many of you can run a Solana or a BNB Chain full node?
“… a novel anti-sybil and anti-spam mechanism called proof of work links that will enhance connectivity within the network and limit certain attacks by sharing their commitment and contributing resources for routing and efficient data delivery.”
Luckily, this mistake was avoided by Zenon by imposing a hard cap for transaction throughput. We still have a chance to get it right. That’s why we need to create strong incentives for a thriving peer-to-peer network layer.
Now let’s see how and why a hybrid system will prevail, where feeless transactions will coexist with fee based transactions.
“The sentinel nodes will benefit from the fees by consuming them in order to compute the PoW links.”
In a healthy peer to peer network that aims for decentralization, participants are incentivized to run full nodes. That is exactly the reason why Syrius wallet features an embedded full node. Every one of you running a full node is great for decentralization and self-sovereignty, but without enough public nodes, we saw how the p2p network struggled to serve new users entering into the ecosystem. If there are no incentives to run full nodes, free riding issues will arise and the peer to peer network will eventually collapse. Bitcoin avoided this by hard capping the block size, but NoM is designed to scale Bitcoin, so we can’t afford this cap indefinitely.
Therefore, fee based incentives are mandatory for the provisioning of the peer to peer layer. Moreover, users should have all the options to transact the way they want to. Even the whitepaper embraces fees in order to deter denial of service attacks and incur a cost for the attacker:
“… adding a transaction fee, which means that the attacker will make the sentinels unavailable at the cost of investing resources in the system, which is a positive aspect for the network and a negative one for the attacker, taking into account that the consensus is unaffected.”
In my opinion, the following hybrid system will emerge for NoM Phase 1:
- Feeless transactions
- Supply PoW
- Fuse QSR
- Fee based transactions
- Supply ZNN
- Burn ZNN
To be continued …