What is Skale network and SKL token? | Easy explanation
Introduction
In the current scenario, Decentralized applications are becoming popular and driving lot of new users, but as the user base grows there can be lot of scalability issues with these applications. Skale network wants to solve these issues by using Elastic side-chains on top of Ethereum Network.
Sidechain is a like a child to the main blockchain that uses a two-way peg i.e. one coin on the main chain is equal to one coin on side chain and vice-versa. Users can send funds to sidechains and use the Dapps, removing the pressure from the main chain and allowing it to process the transactions faster. Sidechain also allow users to use their coins in different blockchains.
For example: If a user is having some Bitcoins and wants to use it in another coin’s blockchain, say litecoin as the transactions are faster and cheaper there, Sidechains make this possible.
Skale also wants improve the user experience of the decentralized applications. It has built high-quality user experience libraries for mobile/web browser and tools such as truffle which enable developers to create real-world end-user applications at large scale.
The Skale Network exists both on the Ethereum Mainnet and on Skale Network nodes, and is designed specifically to improve the user experience of dApps, while significantly increasing transaction speeds, dramatically lowering costs, and creating seamless workflows for end users and devs.
What is Skale Network ?
Skale Network is a web of elastic blockchains built to optimize scalability and improve user experience for decentralized applications.
Skale Network uses the Sidechains for off-chain computation while not compromising on security using the Pooled security system and decentralized network of Proof-of-Stake validators.
Problems encountered while using current decentralized applications are:
Slow Transactions
High Transaction Fees
Low Transaction Throughput
Scalability
Poor Usability
Skale Network solves the above problems with the help of a decentralized platform that uses Elastic side-chains. While Ethereum is slow to verify transactions, Skale claims it can execute sub-second block times and run up to 2,000 transactions per second per chain.
The Skale Network is an open source project with many contributors, including Skale Labs. More than 40 dApps are being built on Skale, ranging from games to streaming audio apps.
Skale Network supporters include Blockchange, ConsenSys Labs, Galaxy Digital, Hashed, HashKey, Floodgate, Multicoin Capital, Recruit Holdings, Signia Venture Partners, and Winklevoss Capital.
Why scalability is important in DApps? How Skale ensures it?
Scalability is one of the most important features that every decentralized application should have in order to compete with the current centralized applications.
For example: In centralized applications like Instagram, Twitter, etc, There are a lot of powerful servers involved that receive and process millions and billions of messages every minute. Meanwhile, decentralized applications like Augur, Decentraland, etc can only process very few transactions per minute which also are very expensive.
If it remains this way we cannot even imagine blockchain technology competing with current centralized applications.
This where Skale sidechain comes to the rescue. Skale is developing a side chain that will help in scaling the number of transactions in a distributed blockchain. SKALE brings modern architectural database design to Web3. This mechanism is superior to that being attempted by Ethereum 2.0 through sharding, Skale believes that they have a better and more tailored approach.
Have you checked Eth Gas Station lately? Gas fees to send transactions across the Ethereum network are quite high, which is a positive indicator about the demand of ETH and improving the security of the network. But it’s not so great if you are trying to use your favorite dApps without breaking the bank.
Now more than ever, Ethereum needs more flexible Layer 2 technology. The SKALE Network is specifically designed to solve these problems. SKALE pricing supports Ethereum by giving dApps their own blockchain that charges based on the amount of server space over a period of time, rather than by transaction. SKALE will be orders of magnitude less expensive to run transactions, while not losing sync with the Ethereum mainnet.
And since SKALE is Ethereum Virtual Machine compatible, dApp developers can easily integrate their existing Ethereum smart contracts with SKALE. Many dApps in SKALE’s innovator program are already running their smart contracts on SKALE’s elastic sidechains.
Key features of the SKALE Network include:
- Zero to Near-Zero Gas Fees
Gas fees within the SKALE Network are zero, regardless of the size of the SKALE chain, as long as the chain is below a specific resource threshold. This zero to near-zero gas fee structure is a significant benefit in terms of building and operating decentralized applications. A large gating factor in user adoption and building out profitable use cases is the friction imposed by blockchain gas fees. Removing these costs from the equation translates into much easier go-to-market opportunities, higher adoption rates, and more successful decentralized solutions.
2. Random Node Selection/Frequent Node Rotation
Validator nodes are assigned to elastic sidechains via a random process that is arbitrated by a mainnet contract. Security of chain consensus is further protected via frequent node rotation. Nodes will be removed from one or more chains on a non-deterministic schedule and new nodes added. This rotation takes place via
the node cores continually checking in with the mainnet, exiting current chains and connecting with and working on new chains as so determined by the mainnet contracts and its random assignment algorithms.
3. Virtualized Subnodes
Each elastic sidechain is comprised of a collective of randomly appointed virtualized subnodes which run the SKALE daemon and the SKALE consensus. Nodes in the SKALE Network are not restricted to a single chain but rather can work across multiple sidechains via the use of virtualized subnodes. This multiplex capability is made possible via a containerized subnode architecture deployed on each node in the Network. Each node is virtualized and is able to participate as a validator via this subnode architecture for an independent number of
sidechains.
4. Containerized Validator Nodes
Virtualized subnodes are enabled via an innovative containerized architecture that provides industrial-grade performance and optionality for decentralized application developers, performance and flexibility that is similar to traditional centralized cloud and microservice systems. Containers are divided into several main components encapsulated via a dockerized Linux OS, allowing for each node to be hosted in an OS-agnostic manner.
5. Consensus via Asynchronous Binary Byzantine Agreement (ABBA)
The consensus model used for block creation and commitment for each elastic sidechain is a variant of the Asynchronous Binary Byzantine Agreement (ABBA) protocol. (Derived from Mostefaoui et al. although other consensus protocols can be used, as long as it satisfies certain properties). The benefits of the ABBA protocol is that it is designed to exhibit robustness in the case of subnode downtime where each latent and/or down subnode is regarded as a slow link.
6. BLS Rollups
Each sidechain also supports BLS Rollups which provides an efficient and secure way to use the SKALE Network to improve throughput and lower gas costs on the Ethereum mainnet. A rollup can generally be
defined as a solution where transactions are published on chain, but computation and storage of transaction results is done differently to save gas. BLS Rollups works by using a crypto algorithm called aggregated BLS signatures to shrink ETH transaction sizes.
7. Node Monitoring
A Node Monitoring Service (NMS) runs on each SKALE Node and facilitates the performance tracking of a certain number of other nodes in the network. Performance tracking measures both uptime and latency through a regular process which pings each peer node and logs these measurements to a local database. At the
end of each epoch, these metrics are averaged and submitted to smart contracts on the mainnet that use them to determine the payout distribution to nodes as well as flag suspect nodes for review and potential penalties.
8. Ethereum Interoperability
The SKALE Network is designed as a security and execution layer that ties in closely with the Ethereum network in service of its security and operational model. The smart contracts that maintain node operation all execute on the Ethereum mainnet. In addition, the validator stakes and user subscriptions not to mention the token inflation, are also maintained or controlled by smart contracts running within the Ethereum mainnet.
(a) Solidity Support
The SKALE Network uses Solidity as its contract language sparing developers
from having to learn a new language. Solidity is an object-oriented, high-level
language for implementing smart contracts. It was influenced by C++, Python, and
JavaScript and is designed to target the Ethereum Virtual Machine (EVM).
(b) Ethereum EVM Compatibility
The SKALE execution model is fully compatible with the Ethereum Virtual Machine (EVM) making it so that smart contracts that run on the Ethereum mainnet can also
run on the SKALE Network. There is no need to rewrite or port smart contracts.
Anything written for the EVM will execute on SKALE. Developers are therefore able
to migrate to SKALE elastic sidechains in a phased manner – moving smart contracts
to SKALE on an individual basis as the needs and benefits dictate.
(c) Developer Tool Support
Support for Solidity and the Ethereum VM also extends to commonality with Ethereum developer tools. Developers are able to use the same tools they use when working on the Ethereum mainnet. These include connecting to the
network via web3.js and web3.py as well as using tools such as Truffle and Remix.
(d) Token Support
The SKALE Network supports all major Ethereum token standards including ETH,
ERC20, ERC721, ERC777, and Dai. Interchain messaging, as well as deposit boxes and token clones, ensures the integrity and fidelity of token operations with the
SKALE Network.
(e) Common Wallet Support
The SKALE Network supports a number of major crypto wallets and browser
plugins and bridges. These include Bitski, Fortmatic, Metamask, Portis, Torus. These
interface components are well-regarded in the community and used by thousands
of developers.
Skale Network has been audited by various reputable Security Audit Teams, which include:
ConsenSys Diligence
ConsenSys Diligence conducted an audit on SKALE's manager token, delegation, validator registration, and distribution features. The results of and SKALE's response to the audit are as follows:
•Total Issues 30 (26 Addressed)
•Critical Issues 2 (2 Addressed)
•Major Issues 12 (12 Addressed)
•Medium Issues 12 (10 Addressed)
•Minor Issues 4 (2 Addressed)
Quantstamp
Quanstamp conducted an audit on SKALE's manager token, delegation, validator registration, and distribution features in July 2020. The results of and SKALE's response to the audit are as follows:
•Total Issues 26 (21 Resolved)
•High Risk Issues 3 (3 Resolved)
•Medium Risk Issues 1 (1 Resolved)
•Low Risk Issues 11 (8 Resolved)
•Informational Risk Issues 7 (5 Resolved)
•Undetermined Risk Issues 4 (4 Resolved)
The full audit report is available here.
Quanstamp also conducted an audit on SKALE’s allocator feature in September 2020. The results of and SKALE’s response to the audit are as follows:
•Total Issues 9 (7 Resolved)
•High Risk Issues 0 (0 Resolved)
•Medium Risk Issues 2 (2 Resolved)
•Low Risk Issues 3 (3 Resolved)
•Informational Risk Issues 3 (1 Resolved)
•Undetermined Risk Issues 1 (1 Resolved)
$SKL Token
SKL is a utility token, a piece of software that helps the network function. Everyone who holds a token is a co-owner of the network. With this token you can participate in and govern the network.
$SKL is the native token of the Skale Network and it has the following use cases:
1. Staking/Delegation
Delegators may delegate their tokens to validators and earn rewards. Validators stake SKL into the network and then gain the right to run nodes and earn both fees and tokens via inflation.
2. Governance Voting
The SKL token will also be used for on-chain voting, which will control all economic parameters of the SKALE Network. The governing body for the network is the N.O.D.E. Foundation.
3. SKALE Chain Subscription Fees
Users pay SKL in a subscription-based model to rent these resources (computation, storage, bandwidth) for a predetermined amount of time in the form of an Elastic Sidechain
Token Type
ERC777
Usage
Payments, Work
Usage Details
SKL token is a utility token used to support application deployment and the security of the network. Developers purchase independent blockchains, or SKALE S-Chains, with SKL tokens to run their dApps. SKL tokens are also used for delegating and staking to secure the network. Stakers and delegators earn rewards in exchange for locking their holdings on the network.
ERC777 is an Ethereum-based token standard that is backward compatible with the more popular ERC20 standard, meaning that all Ethereum apps with ERC20 support can also support ERC777 tokens. This newer standard aims to improve upon some of the shortcomings of ERC20, particularly its inability to use a token as a trigger for a function of another smart contract. One disadvantage of ERC777standards is that creating a new ERC777 token contract can be relatively expensive in terms of gas costs.
The SKALE Network is able to use SKL for both staking and delegation due to functions support by the ERC777 standard. Unlike with ERC-20, a delegator using SKL does not need to send tokens to a separate delegation smart contract. Instead, they can share their secure delegation key with a staking provider while storing the tokens in a cold or hot wallet.
SKL Token Public Launch Details
Launch Style
Private Sale
Distribution Date
October 01, 2020
Launch Details
Early venture round
The project raised a total of $16.9 million from private investors to fund its pre-production development. The funding includes a $9 million contribution from SKALE Labs, which used the capital it raised in previous SAFT sales to support the SKALE Network. These sales combined to purchase 25.5% of the max SKL supply and were subject to investor lockup periods ranging from 6-36 months based on the individual SAFT agreements.
Activate's Proof of Use
The SKALE token (SKL) was the first to launch on Activate, which provided a platform for public distribution of tokens and participation in SKALE's network. ConsenSys has pioneered a new feature, Proof-of-Use.
•Proof of Use requires users who claim or purchase tokens during the launch to actively “prove use” before they’re allowed to transfer or redeem them for alternative purposes
•For example, a participant may be required to delegate their purchased tokens for 60 days before being able to transfer them outside the network
•Distributing tokens amongst stakeholders with aligned incentives is critical to minimize passive speculation while ensuring networks are effectively bootstrapped at launch
3,736 people from 90 different countries purchased 168,553,209 SKL at $0.03 USD/SKL, all of whom helped secure the network ahead of SKALE’s Phase 2 mainnet launch on Oct. 1, 2020.
Remaining allocations
SKALE has also allocated 10% of the max supply to the N.O.D.E. Foundation, the non-profit entity created to support the future development of the network. These tokens will vest over a seven-year period following SKALE's mainnet launch.
The team dedicated the remaining tokens 20% of the max to SKALE Labs, with the majority going to the founding team. The team's tokens will remain locked for the first year and will then vest over the following three years.
All vesting periods will commence at launch.
Funding Rounds
Seed Round
Start Date
09/01/2018
End Date
09/01/2018
Tokens Allocated
700,147,329.00 SKL
Price
$0.00340 per SKL
Total Collected
$2,261,667
This Seed Sale represents the cumulative investment into SKALE Labs Inc. prior to the creation of the SKALE Foundation asset transfer and SAFT conversion. SKALE Labs raised this seed round about a month before it completed the following SAFT round.
Details:
Skale Labs raises $9.65 million for better blockchain infrastructure by VentureBeat
SAFT 1
Start Date
10/04/2018
End Date
10/04/2018
Tokens Allocated
703,956,880.00 SKL
Price
$0.0125 per SKL
Total Collected
$8,860,000
SKALE Labs raised ~$8.9 million in its first SAFT (Simple Agreement for Future Tokens) round led by Multicoin Capital. Additional participants included Aspect Ventures, Blockchange Ventures, Boost.VC, Canaan Venture Partners, Galaxy Digital, Floodgate Fund, Hack.VC, Neo Global Capital, and Signia Venture Partners.
Details:
Skale Labs raises $9.65 million for better blockchain infrastructure by VentureBeat
SAFT 2
Start Date
10/01/2019
End Date
10/01/2019
Tokens Allocated
380,161,192.00 SKL
Price
$0.0152 per SKL
Total Collected
$5,778,450
Proof-of-Use Sale
Start Date
10/01/2020
End Date
10/01/2020
Tokens Allocated
168,553,209.00 SKL
Price
$0.0300 per SKL
Total Collected
$5,056,596
The SKALE token (SKL) was the first to launch on Activate, which provided a platform for public distribution of tokens and participation in SKALE's network. ConsenSys has pioneered a new feature, Proof-of-Use.
3,736 people from 90 different countries purchased 168,553,209 SKL at $0.03 USD/SKL, all of whom helped secure the network ahead of SKALE's Phase 2 mainnet launch on Oct. 1, 2020.
Details:
SKALE Token (SKL) details
KYC Required?
Yes
Initial Supply
Outstanding Supply
4,140,000,000.00
Founders & Project
37.4%
Investors
47.2%
AirDrops & Rewards
15.4%
Highlights of SKALE 2020 Achievements
What has SKALE been up to? SKALE 2020 Year-in-Review
Conclusion:
Skale network founded by Jack O’Holleran and Stan Kladko, veteran startup software executives with multiple successful exits. Skale is a blockchain project that solves the two main problems associated with decentralized applications in Ethereum platform i.e. scalability and usability.
But many other crypto projects are working on the same problem.
If Skale can come out with the better and faster solution than the others it sure can be one of the best crypto assets that a user will love to hold in their portfolio.
Skale Token has been performing great since its listing on Binance, Huobi, Uniswap and recently got listed on Crypto.com with a great community backing it. You can monitor its price movements on Coingecko and CoinMarketCap.
Wanna know more about SKALE Network? Watch these Explainer Guides 1 & 2
Also kindly visit SKALE Website, SKALE Blog, SKALE YouTube, SKALE Podcast.
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