Decentralization. Why should I care?
It was long assumed that banking and currency policies had to be defined by central banks, governments and authorities. Those powerful entities take critical decisions with an often-criticized lack of transparency, and are subject to corruption, and are costly, and usually take less than optimal decisions because they cannot aggregate/process enough information to operate.
Through clever use of the blockchain technology, Bitcoin proved that anyone could safely store and transfer value without relying on the existing banking infrastructure. Subsequent blockchain technologies further expanded the scope of this revolution by introducing decentralized voting, ownership and finance. By following the principles of “Code is Law”, open-source blockchain technologies bring unmatched transparency to their users. Anyone can understand and verify the rules of the game, and even act upon them through decentralized voting systems.
Decentralization sets a trust-free environment without central authorities, in which censorship is avoided, and costly middlemen are not needed. Users of decentralized platforms play an actual role in their function and governance, instead of following rules they have no say about. However, Blockchain comes in multiple flavors, each with its own twist.
Not all blockchains are made equal
In late 2017, after another large crypto rush, it became crystal clear that Bitcoin and Ethereum had scaling issues. All-time high congestion and fees gave birth to a trend focused on creating new crypto-currencies capable of processing more transactions per second. Very quickly, it was found that protocols sustaining thousands of transactions per second somehow had to sacrifice either security or decentralization. This phenomenon was coined the scalability trilemma — which is not a theorem, and as Vitalik Butterin said, “the trilemma was never an impossibility result, it was claiming that getting 3 of 3 is *hard*”.
Recently a series of events highlighted the consequence of such sacrifice:
- In February 2020, IOTA was shut down by the team when a vulnerability was exploited in the IOTA wallet. This is a clear example that their system is not decentralized and is controlled by the developers.
- On Thursday, February 25 2021, the Fantom Network stopped producing blocks for 7 hours. As stated by the Fantom Foundation, “One of the biggest validators slowed down the block emission, which caused a second big validator to slow down as well. The other validators kept producing blocks, but the two lagging ones were not able to catch up. These two validators are big enough to represent more than one third of stake, and they caused a domino effect that halted new block confirmations”. This issue showcases the need to increase decentralization through both more nodes and a better distribution of coins.
- Solana, one of the supposedly fastest blockchains, recently suffered from a series of attacks. Those attacks exploited flaws in the system introduced as a result of sacrificing decentralization and security for speed.
Issues with current chains
All these events highlight the importance of decentralization. Overall, decentralization can be compromised at several levels:
- Coin centralization: In Proof-of-Stake systems, the coin distribution is particularly important as it allows people to earn rewards but also to vote on the evolution of the protocol (as in Tezos). In many systems a small number of entities is sufficient to control the whole network.
- Centralization of power:Since rewards are extremely infrequent for small miners in Proof-of-Work systems, people tend to pool together in order to smooth the rewards over time. This leads to indirect centralization. As of now, the 4 largest mining pools of Bitcoin and the first two of Ethereum are enough to reach 51% and jeopardize the whole system. Proof-of-Work systems also favor hardware manufacturers that are able to create more efficient hardware. Proof-of-Stake can also suffer from a form of centralization of power through delegation or custodian staking. For instance, the three largest bakers in Tezos are exchange platforms, and delegators can have as much as 10 times the amount they own delegated to them. Those actors get a disproportionate amount of power over the network.
- Entry price: As Vitalik rightly points out, it is crucial that anyone can run a node. Many current protocols require a large initial investment from node runners, in hardware and coins. For example, running a node on the Fantom network currently requires 500,000 FTM, more than $175,000 and 2,000 AVAX on Avalanche, around $48,000.
Massa vision and innovation
At Massa, we believe that decentralization is non-negotiable. That’s why we spent several years of research on a new consensus protocol. Our multithreaded technology allows thousands of transactions per second in a network with thousands of nodes.
Moreover, we ensure that our network will be fully decentralized from the start at several levels:
- Coin distribution: First, one of the most important things in a Proof-of-Stake system is coin distribution. At Massa we ensure that our system is decentralized from the start by doing a fair initial distribution. No entity, including ourselves, will own more than a small fraction of the coins. This is exemplified by our private sale, which is, to our knowledge, one of the most decentralized private sale, with a large number of entities and no whale. Our public sale will follow the same design, with a limited amount available per person. Our goal is to have a Nakamoto coefficient above 1000.
- Entry price: In Massa we target low hardware (standard desktop computer) and staking requirements in order to lower the barrier for entry. This is a necessary condition to ensure that people can run a node on their home computer and to have a healthy and resilient network. Our low hardware requirements already allows more than 6 500+ nodes to run on our testnet.
Smart contract innovations
Building a blockchain from scratch is an opportunity to incorporate the lessons learned after the experimentations of previous blockchains. This is one of the reasons Massa team was able to bring — and showcase — innovations in the field of Web3 and Smart Contracts, in particular Blockchain-hosted websites, games and dApps, as well as Autonomous Smart Contracts.
One innovation brought by Massa is the ability to register “.massa” domains and store websites’ logic directly on the Massa blockchain. Those websites will be accessible directly from a browser through the Massa extension or any compatible extension, without any intermediaries. We believe that innovation will increase the security of critical applications such as DeFi platforms.
Another innovation of Massa is the asynchronicity and self-wakeup capabilities of smart contracts, allowing them to function on the blockchain without being explicitly called by off-chain humans or bots. Massa smart contracts can register actions to be executed later and emit signal events, which other contracts can listen to. Once an event is triggered the corresponding handler functions will be automatically executed. Autonomous smart contracts reduce the need for bots and human interaction and push the limits of decentralization. We believe that autonomous smart contracts have a wide range of applications from autonomous trading bots in DeFi to autonomous agents in decentralized games.
What’s Next?
In Episode 6 of our testnet we released a preliminary version of our smart contract engine, and a first version of autonomous smart contracts and decentralized web hosting in Episode 9. At the time of publication of this article, Episode 12 is live, and developers have already been able to try to host their own websites and dApps on the blockchain. We are constantly improving our testnet and in the coming episodes we will showcase Proof-of-Concepts of autonomous decentralized dApps.
Those innovations are still a work in progress and we’ll give more details in future blog posts.
About Massa:
Massa is a high-performance blockchain designed to be truly decentralized from the start. The Massa testnet was released in July 2021, providing an easy way for anyone to test our protocol, and has been constantly improving since then. The Massa testnet has now more than 6,500 nodes running.
- Website: massa.net
- Testnet explorer: test.massa.net
- Documentation: https://massa.readthedocs.io/
- Source code and tutorials: github.com/massalabs/massa
- Telegram: t.me/massanetwork
- Discord: discord.gg/massa
- Twitter: https://twitter.com/MassaLabs
- Reddit: reddit.com/r/massa/
- Youtube: youtube.com/channel/UChVfdvYpn0eFk4B-T7TGmOg
