On Ethereum, around 2,000 2,000 dapps and 300,000 tokens operate. The network is struggling under this load: apps clog the mempool and push fees higher. Thus, on 1 September, amid the DeFi boom, the average transaction fee on Ethereum stood at $10.
The creator of Ethereum, Vitalik Buterin considers high fees justified. But ordinary users are unlikely to agree to pay $10 for a move in a game or a message in a chat.
While Ethereum developers discuss upgrade proposals, the project Dapper Labs is building a blockchain ecosystem for fast dapps. It includes the Flow blockchain, the eponymous utility token and the crypto wallet Dapper Wallet.
We explain why different tasks are assigned to network nodes, how Flow’s pipeline architecture works, and what Dapper Labs expects from its partnership with the NBA.
Speed up the blockchain: give nodes different tasks
Nodes on blockchains differ by compute power: home computers work alongside servers. Most blockchain developers do not take this into account. As a result, servers sit idle awaiting consensus or discard results from slow nodes.
Dapper Labs split blockchain tasks into two types:
- Objective — with a single objective solution. These include mathematical computations: there is no need to rely on authority to compute 2+2=4 or to determine which node solved a task incorrectly.
- Subjective — with several possible solutions. The task of achieving consensus. Nodes cannot unambiguously determine the order of transactions in a block and therefore choose it by voting.
Solving objective tasks requires greater computing power, while subjective tasks can be handled by a home computer. In Flow, objective and subjective tasks are solved by different types of nodes:
- Execution Nodes compute transaction results and form blocks;
- Consensus Nodes determine the order of transactions in a block and reach consensus using a Proof-of-Stake algorithm.
Dapper Labs believes this approach could speed up the blockchain by 50x.
“We conducted an experiment and built three networks: a blockchain with task separation between fast and slow nodes, a blockchain without task separation, and a blockchain with slow nodes. The first blockchain processed 1555 transactions per second, the others — 27 transactions per second,” says Dapper Labs CTO Dieter Shirly.
In Flow, consensus nodes assemble a preliminary version of the block and pass it to the execution nodes. While the execution nodes compute transaction results, the consensus nodes gather a draft of the next block.
Consensus nodes pass the block draft to execution nodes and switch to preparing the next block.
Separation of mathematical computations and the task of achieving consensus allows Flow nodes to avoid idle time and quickly form blocks.
Speed up the blockchain further: process transactions on a pipeline
In theory, Ethereum processes 15 transactions per second; in practice, around 12 transactions per second.
Ethereum nodes perform the same work. This is like a car plant where every worker sharpens parts, tightens bolts and sews covers. At such a plant, 100 workers would assemble 100 cars in a year.
Real factories use conveyor belts: workers perform simple tasks and parts move between them automatically. On a conveyor, the same 100 workers would assemble 1000 cars in a year.
Flow works like a pipeline. Besides Consensus Nodes and Execution Nodes, the network also uses Collection Nodes and Verification Nodes in block construction. Each node performs only part of the work.
Collection Nodes pass the first group of transactions to the consensus nodes and immediately start collecting the second group. When the consensus nodes publish the first block, the collection nodes will start collecting transactions for the fourth block.
Conveyor architecture and task separation among nodes of different power ensure Flow’s high scalability.
“Flow is currently about 10x faster than Ethereum, but we have more to do. With a fully optimised architecture, Flow could process up to 100,000 transactions per second,” says Dapper Labs CTO Dieter Shirly.
Moreover, processing transactions makes it possible to add blockchain nodes without slowing the network down.
Strengthen decentralisation: run as many nodes as possible
Blockchains with throughput around 100 TPS, such as XRP and EOS, are largely centralised. Developers do not allow users to run nodes, creating conditions that make validators hard to attain. As a result, blockchains become vulnerable to theft, attacks and censorship.
The Dapper Labs team believes that user participation is essential to achieving genuine decentralisation and security. The project invites users to run Flow nodes and earn rewards for block production and transaction validation. According to Dapper Labs, annual earnings for node operators could reach 3.75% of FLOW’s market capitalisation.
Node operators will receive transaction fees and block rewards in the native token FLOW. They are needed to pay transaction fees, publish smart contracts, secure user tokens, govern the Flow blockchain and participate in staking.
To run a node you must buy and stake:
- 1,250,000 FLOW for the execution node;
- 500,000 FLOW for the consensus node;
- 250,000 FLOW for the collection node;
- 135,000 FLOW for the verification node.
That distribution reflects hardware requirements. The consensus node can be run on a personal computer, while the execution node requires a server.
“Execution nodes are the bottleneck of the blockchain. We introduced higher staking requirements to ensure that a miner has the funds to buy or rent server equipment in data centres,” explains Roham Garegozlou, CEO of Dapper Labs.
In the coming month the project will sell 100 million FLOW on the CoinList platform:
- From 22 September to 2 October 2020 — up to 10,000 FLOW per user at $0.10 per token. Total supply — 100 million FLOW;
- 6 October 2020 — Dutch auction with no limit per wallet. Starting price — $1 per token. Total offering — up to 25 million FLOW.
Nevertheless, token sales are not Dapper Labs’ primary aim. The team seeks to popularise Flow and cryptocurrencies overall.
Improve the perception of cryptocurrency: build high-quality blockchain games
Dapper Labs believes users choose quality games and apps over the blockchain. The team plans to create dapps inspired by sports games and popular literary properties.
The project has signed partnerships with the National Basketball Association (NBA), the UFC, Dr. Seuss Enterprises and Warner Music Group.
In the United States, sports games account for 11% of total game sales. Decentralised applications based on NBA and UFC franchises could attract thousands of players unfamiliar with blockchain.
“Most Ethereum games are casinos with simple gameplay. Developers cannot build quality dapps because of the limitations of blockchains. On Flow you can create games with fast gameplay and attractive graphics that ordinary users are used to,” notes Roham Garegozlou, CEO of Dapper Labs.
The first Flow blockchain game — NBA Top Shot — is in closed beta. The game resembles CryptoKitties, but instead of cats players collect NFT moments from NBA Moments.
NBA Moments contain two entries: a slam-dunk video and the data of the player who performed it. In NBA Top Shot players form teams of the league’s top players and compete for new Moments.
Players do not need a cryptocurrency wallet: NBA Moments can be paid for with a card in the built-in wallet Dapper Wallet.
Thanks to Dapper Wallet, users do not need to understand how the network operates. During the first purchase of NBA Moments the game automatically creates a wallet address and sends tokens to it.
Conclusion
More than a decade has passed since Bitcoin’s creation, but the principles of how blockchain networks operate have not changed: nodes of different power do the same work.
Developers are attempting to optimise existing blockchains: increasing block sizes, introducing sharding, and outsourcing validation to powerful trusted nodes. This can fracture communities, raise security risks and centralise networks. Throughput hardly changes because of ageing blockchain architectures.
Dapper Labs have built a blockchain with a new architecture: Flow assigns tasks to nodes of varying power and processes transactions on a pipeline.
Throughput up to 100,000 TPS and a focus on ordinary users could make Flow the next step toward mass adoption of cryptocurrencies.
Earlier, Dapper Labs described how to accelerate mass adoption of blockchain through games.
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