Network Utility Update
Introduction
From its inception, Blockswap DAO and its core contributors have been focused on developing protocols that provide network utility for the DAO. Network utility is a nuanced and ever-expanding value brought to DAOs that has not been present prior to web3. Therefore, Blockswap DAO aims to find novel yet effective methods to accrue intrinsic utility to the BSN token through its protocol’s ossification. Blockswap’s core contributors have provided ample areas to create network utility through the decentralized deployment of the network stack with permissionless participation. That said, it is up to the DAO to utilize and execute the actions needed to put this utility in motion because the protocol infrastructure exists to serve the DAO and token utility. A few of the areas where network utility could be injected will be explored here. Although, it would be greatly beneficial to hear some ideas from the community.
Blockswap Protocols
It has been said before that Blockswap DAO is a network DAO. This is advantageous for token utility as there is an ever-growing number of protocols that are interconnected. Some of them have been explained in detail such as Stakehouse, while others are still emerging. The following will be an exploratory look at how the DAO can find network utility for the BSN token using the current protocol structure.
The DAO and its protocols shall go through multiple iterations to achieve optimal stakeholder participation; It will continuously support and promote its protocols’ adoption by onboarding new users. Velocity is a key element that helps to achieve this value alignment ensuring sustenance while addressing the cold start bootstrapping problems of decentralized networks.
dCommon MPC as a Service
Status: Actively supporting Stakehouse
The first implementation of dCommon can be seen in Common Interest Protocol (CIP) for Ethereum validator signing key recovery. dCommon solvers determine a zero-knowledge proof which allows users to securely communicate information privately. It is a generalized MPC as a service for use by DAOs or protocols for off-chain computation driven by smart contracts.
Those who wish to join dCommon as a solver must stake BSN tokens to participate. As demand grows for a quality MPC as a service the number of solvers participating is anticipated to rise.
Gateway
Status: Under multiple audits
To align with the ideal of Ethereum as the global settlement layer, Blockswap core contributors have created a protocol that will allow users to upgrade their ERC20 to be available on any blockchain without a bridge. This brings the credibility of Ethereum assets to the entire web3 ecosystem. Users retain full custody of their assets throughout the entire process while keeping the security of their assets on Ethereum regardless of the blockchain they are currently being used on.
Gateway is a bespoke protocol construction to enable State Replication for a smart contract’s business logic. It starts with extending EIP across Rollups and EVMs. The current focus is ERC20, but in the future could include ERC721 and arbitrary state clusters. Gateway is a modular architecture that has a decoupled transportation layer and an operator addition to its core kernel. Both non-core layers have optionality for BSN staking for on-chain decentralized operations and running lightweight zk provers for cross-chain messaging.
Proof of Neutrality (PoN) Relay
Status: Under audit & testnet coming soon
As Blockswap core contributors work towards the decentralization of Ethereum through fractionalized validator ownership, it is imperative for the health of the ecosystem to keep censorship at bay. The Proof of Neutrality Relay is designed to align directly with the Ethereum roadmap via a block proposer and builder separation mechanism which is inherently uncensorable.
PoN relay is a Relay that exists on-chain as a PBS protocol and Payout Pool. It is a bespoke construction using a commitment-based Proposer Builder Separation design. Currently, it is the only relay in the industry that serves PBS functionality and a smoothing pool for a proposer to collect MEV payouts every 9.2 days in liquid ETH.
PoN Relay is a Relay that serves on-chain in protocol PBS smart contract referred to as the Payout pool, This is a unique construction of commitment-based proposer builder separation design and the only one in the industry. It serves PBS functionality and smoothening pool for the proposer to collect MEV payouts on every 9.2 days in liquid ETH regardless of whether a block proposal has been made.
Blockswap DAO can host a PoN instance and allow relayers to serve the PBS. The DAO native tokens can be used for hosted PBS governance and operations serving a decentralized, permissionless, and credibly neutral Ethereum MEV marketplace.
The protocol is open to all existing and future Ethereum validators. Unlike MEVBoost, all relayers earn revenue by providing service. Builders are rational market actors and proposers make a consistent ETH revenue every cycle regardless if they have made a block or not.
There are more innovations possible within the system. Existing DeFi and DAO protocols can have pre-block coordination arranged and pay directly to the proposers and builders for their transactions. They could also deploy exotic instruments such as futures/perpetuals/options for trading MEV block spaces.
The relay is fully compatible with current MEV strategies, pooling, and RPCs.
Woodpecker
Woodpecker is a super lightweight zero-knowledge utility package for Blockswap network protocols. It allows hiring a decentralized worker for tamper-proof messaging and communication with data integrity. This is a protocol that utilizes the blinding security primitive in conjunction with zero-knowledge to attain various levels of application utilities.
Woodpecker is used in the PoN Relay to ensure all PoN transactions are provably neutral with zero-knowledge tech; It is also utilized in Gateway for the state extensions transportation layer option sharing smart contract. Woodpecker transports the data payload between blockchains without a bridge.
Woodpecker is currently used in Gateways and the PoN Relay. It will require participants to stake BSN tokens to join the network of decentralized witness endorsers.
Token Distribution
From its genesis, the DAO has always focused on a fair distribution of member representation. Distribution of tokens from the DAO has only occurred to support activities that provide direct benefit to the DAO and the adoption of its protocols.
Blockswap DAO still retains the majority of BSN tokens under its treasury to support and facilitate the adoption of Blockswap Network protocols. There is a need for ample tokens in circulation to accomplish two main objectives of the DAO.
- Creating decentralized permissionless liquidity for BSN tokens to accommodate wider participation in Blockswap protocols.
- The DAO requires meaningful decentralization for resilient governance.
To achieve the above and get enough tokens into circulation, the DAO must get tokens to quality DAO members. In the past, tokens have been distributed to those who contributed to Blockswap protocols. This includes Communitynet and Devnet participants.
It is in the best interest of the DAO to incentivize both testers and early adopters of its protocols. That said, this might not be sufficient for those who wish to participate in Woodpecker, dCommon, PoN PBS, or Gateway without participating in another protocol first. The DAO members are welcome to come up with any ideas or feedback on how to increase BSN tokens availability.
The DAO tokenomics can be found here. By the end of February 2023, the DAO will have roughly 800,000,000 BSN tokens in its treasury. The total supply of BSN tokens is 5,000,000,000.
Conclusion
The DAO needs to distribute additional tokens in preparation for future protocols and onboarding more users and network infrastructure participants. It is looking to current DAO members for ideas on how this distribution might take place. The idea of a fair distribution must remain intact. It is also necessary to only distribute tokens to those most likely to provide a positive value to the DAO or its protocols.
Feedback is welcome to deliberate the best course of distribution of tokens.