Built With Individuals, Developers and the Enterprise in Mind
The interoperability and IBC Transfer function of the Cosmos Hub ecosystem (the Interchain) allows for sovereign layer 1 chains like SOURCE to communicate and transfer tokens in an efficient and secure manner without requiring a bridge. While bridging is a great tool for chains to transfer value, many bridges are plagued with hacks, security exploits and vulnerabilities. The IBC transfer capability of the Interchain simplifies value transfer and provides a more secure and scalable environment for users to participate in.
The Cosmos HUB has a horizontal scaling advantage for blockchains built within its ecosystem (known as the Interchain) due to the capability of IBC Transfers. A simple metaphor to understand this would be to look at Ethereum as a two lane highway where transactions are like vehicles that are limited from being able to change lanes. There is only one path which is very limiting. This causes network congestion, higher fees, and slower transaction finality. In contrast, the IBC capability of SOURCE and all other Cosmos Hub built blockchains.
Not only is IBC functionality a massive advantage for SOURCE, it also provides additional security for many token holders that participate in the Interchain ecosystem as it eliminates the need for bridging. With all the attacks and hacks on bridges in 2022, the IBC model is proving itself to be a much more future proof and scalable solution.
This model will be secured even further with the Interchain Security upgrade scheduled for the Cosmos HUB in 2022. This upgrade allows validator node operators to provide security to multiple chains simultaneously and receive additional incentives for doing so. For example, once this upgrade is live ATOM delegators will be able to receive ATOM, OSMO, EVMOS, JUNO and SOURCE all from staking their ATOM to validator nodes that should choose to participate. This promotes further decentralization and makes it easier to further secure newly built blockchains in the Interchain.
SOURCE enables Rust smart contract capability with CosmWasm and features a minting system that mints and releases new tokens over a predetermined inflation schedule. Rust is widely-used outside of blockchain technology and is a highly scalable language for smart contracts, making SOURCE an attractive blockchain for developers and enterprises looking to utilize the power of Web 3.0 technology. On top of that, CosmWasm allows IBC-capable smart contracts between chains, creating an extremely effective mechanism for cross-chain collaboration, value and data sharing. This is considerably important, as the need for information to be shared in an effective and secure way across networks is vital in order for decentralized applications to garner mass adoption.
SOURCE has a throughput starting at 2,500 transactions per second (TPS), scalable up to 10,000 TPS, and an average block confirmation time of 7 seconds. Combined, these are significant increases from Bitcoin’s TPS of 7 and average confirmation time of 30+ minutes, and Ethereum’s TPS of 25 and average confirmation time of 6+ minutes. For further perspective, VISA handles about 1,700 to 4,000 transactions per second.
Transaction fees (otherwise known as ‘gas’) on SOURCE are extremely affordable at approximately $0.01 to $0.07 per transaction. This is significant for developers that wish to deploy various apps, marketplaces, metaverses, etc., as they do not want to be bottlenecked by high network congestion, downtime or high fees that slow user adoption and limit product scalability. Affordable transaction fees are imperative for enterprises, many of whom wish to utilize blockchain solutions for more efficient on-chain data storage via micro transactions.
Security for any blockchain is top priority. Without it, the network can be quickly halted or rendered useless, affecting all users, applications and services. SOURCE has a unique approach towards decentralization with an emphasis on security first.
Fully decentralized governance models have evident limitations in security. For just one example, a malicious on-chain governance proposal could be submitted under the guise of a well-designed narrative that appeals to the community, but in reality would be harmful to the network and its participants if passed. Unfortunately, governance hacks like this are common, and have happened as recently as July 23rd, 2022, when hackers stole $6 million worth of AUD tokens from Audius, a Web 3.0 music platform. Governance systems without a failsafe create high levels of unnecessary risk. A system which considers short and long term risk, ramifications of changes, malicious intent, etc., is necessary to secure a blockchain ecosystem properly.
13 Guardian Nodes will be deployed at the SOURCE genesis event, managed by the SOURCE Guardian DAO. Their purpose is to protect the sovereignty, ethos and constitution of the chain, as well as to provide sustainable funding for the community pool and SOURCE Swap incentives. These nodes hold authority by being delegated a combined minimum of 33.4% of SOURCE from the strategic reserve and SOURCE partners. This delegation ensures a successful “No with Veto” by the SOURCE Guardian DAO to shut down any threatening or manipulative governance proposals. The SOURCE Guardian DAO will consist of blockchain experts that share a common vision and purpose for the SOURCE blockchain. As a comparison to these 13 nodes, the top 7 validator nodes on ATOM are delegated 34.77% of circulating supply by ATOM delegators. The more distributed a chain’s supply is to various validators the more secure it is. Governance Proposals can be used to add additional Guardian Nodes in the future that will further secure the network.
In order to avoid top-heavy centralization, Guardian Nodes will be set to 100% commission. This removes any incentive for additional delegators to delegate to Guardian Nodes and encourages delegation to community validators. Guardian nodes will also avoid being involved in most governance proposals and will, by default, vote “Abstain” to prevent centralized influence over community governance. “No with Veto” will only be used by Guardian Nodes to protect the chain from malicious proposals.
Nefarious narratives are not always perceived as immediate threats by individuals with limited technical expertise, and the Guardian Nodes are to be viewed as a “fail-safe” mechanism that provides enhanced security to the chain. Subversive, threatening and spammy proposals will be immediately shut down and prevented by Guardian Nodes as they exist as a deterrent for any malicious behavior whatsoever.
Guardian Nodes use SOURCE delegated to them from strategic enterprise partners. These partners will have signed private contracts to commit their delegated tokens to assigned Guardian Nodes as well as trusted community validators.
Source Protocol’s founding team encourages the education and active participation of the community to distribute their delegations to several validator nodes. This increases chain security and makes the network more decentralized. Everyone in the community will have a different level of commitment to actively participate in governance. It is recommended to always research your SOURCE community validator.
To summarize, the benefits provided by SOURCE Guardian Nodes are:
- Designed to protect governance and secure the future of SOURCE
- Managed by SOURCE Guardian DAO’s expertise
- 13 Guardian Nodes deployed at genesis to spread network distribution
- Non-competing with SOURCE community validators
- Provides additional funding for community pool
- Abstains from voting unless the chain is threatened
- Provides opportunity for strategic enterprise partners
Not only do Guardian Nodes protect and secure the chain, they also provide the chain with a revenue stream. Guardian Nodes will provide additional revenue to the Community Pool, Liquidity Mining Rewards and Strategic Reserve. This allows for a steady flow of value to expand and improve the development, adoption and progress of the SOURCE ecosystem.
3.5% of the Genesis Distribution is allocated to the Community Pool. The pool is used to fund beneficial proposals passed by the community to improve the SOURCE ecosystem. There is a 5% tax on all block rewards that also contributes toward replenishing the Community Pool. A percentage of stake rewards from Guardian Validators will also contribute toward replenishing the community pool.
Approximately 33.6% of the SOURCE genesis distribution will be allocated to the Strategic Reserve. This is used for Guardian Nodes and the funding of SOURCE development efforts. These funds will be delegated into the 13 Guardian Nodes from the SOURCE Guardian DAO controlled multi-sig wallet. As strategic partnerships are formed, these funds will be transferred and the partners will sign private contract agreements that maintain their delegated SOURCE within the Guardian Nodes. SOURCE in the Strategic Reserve will not be market-sold, as it is needed to make Guardian Nodes possible. SOURCE purchased from the strategic reserve to raise development capital will also be released on a vesting schedule.
Staking rewards from the strategic reserve will be moderately compounded to uphold the 33.4% minimum delegation of total supply needed for Guardian Nodes. Additional SOURCE accrued from staking will be used to further fund the community pool, or will be delegated to top performing community validator nodes that provide exceptional services to the SOURCE ecosystem.