Mission: to allow all Elastos coin holders to enjoy the benefits of the Elastos ecosystem
Elastos’ main chain officially launched in December, 2017. By 2018, Elastos will start testing its independent main chain side chain. In June, 2018, the Elastos ecosystem’s large-scale DApp will be expected to go live.
The Elastos community consensus mechanism will play a big role in the Elastos ecological process. In the next two to three years, the construction of the Elastos ecosystem will transition from a pure PoW mechanism to the use of a consensus mechanism of AUXPoW (40%) + DPoS (40%) + Foundation & Ecology (20%).
The adoption of a new hybrid consensus program will also continue to contribute to the construction of new areas in the Elastos ecosystem.
The following will explain the strengths and weaknesses of PoW and PoS, and the reasons for which the Elastos ecosystem will use the hybrid consensus mechanism:
PoW (Proof of Work) Pros
Bitcoin is the most typical example of a currency using the PoW program. Miners complete the PoW by solving mathematical problems during the mining process, adding a series of transfers to the blockchain. Because this work requires computing-intensive resources, successful miners will get Bitcoin as a reward.
With Elastos coin and Bitcoin joint-mining, the mined digital currency will be distributed according to the miners’ workloads. The better the performance and the higher the number of mining machines leads to a higher workload capacity. The more workload capacity means more digital currency availability.
In order to control the monetary base, mining was setup as a complex model. Because the possibility of solving a problem depends on a miner’s computing power, the difficulty of mining is determined by the sum of all of the computing power in the system. In the PoW mechanism, miners confirm and fix transfers by completing difficult math problems, which controls the monetary base.
The PoW mechanism enables digital currency participants to have an open channel to access the project community. Mining hard costs act as a guarantee to the coin price. Miners will almost never sell digital currency below their hard cost price. Because the need for greater computing power leads to rising mining costs, the price of the currency continues along a stable upward trend. This also stems the problem of a digital currency in a single PoS mechanism from becoming too concentrated.
PoW Mechanism Cons
Coin holders do not participate in decision-making. In fact, the right to speech is concentrated in the hands of big miners. This runs counter to the concept of decentralization, since the decision-making power is concentrated in the hands of a few miners.
Mine participants are not incentivized to manage the ecosystem, since most users and coin holders can not participate in the decision-making. This leads to a high concentration of power in the miners.
A single PoW mechanism also faces security issues, such as 51% computational attacks. Elastos uses the AUXPoW mechanism for mining in conjunction with Bitcoin.
The PoS mechanism relies on the amount of currency held, and the length of time it is held. The longer one holds digital currency, the more digital currency dividends and equity votes one gets. PoS allows small and medium-sized investors to focus on the project’s long-term development. It tends to make the Elastos coin a long position hold, rather than a short-term tradeable commodity. This makes the Elastos coin ecology healthier, which means people will pay more attention to the currency’s technology and landing applications, rather than just focus on short-term price fluctuations.
In the PoS mechanism, it is possible for coin holders to participate extensively in mining; however, PoS also faces the problem of overly concentrated returns. The big miners have the greatest supply of coins, so they get the highest dividends. Because small miners can only acquire a small amount of coins, non-organizational individuals tend not to participate in mining. As a result, big players accrue more and more coins, and the PoS mechanism eventually leads to over-centralized digital currencies.
In order to balance the interests of all Elastos community members and restrict over-centralization, Elastos uses the AUXPoW + DPoS + Foundation mixed consensus mechanism.
Elastos innovates by using the AUXPoW + DPoS + Foundation and ecology consensus mechanism. Coin holders and miners can participate in voting, and together take part in major decisions for the Elastos community. Both the coin holder and the miner can influence pre-programmed updates, such as SegWit, blockchain growth, and more. If these updates are widely accepted, the developer does not need to intervene, as the chain will automatically fork to match the update. The Elastos coin’s PoS also provides a checks and balance mechanism against unqualified miners. If the consensus rules do not match the network, most coin holders will vote against.
Community autonomy can be achieved by equitably allocating voting weights by AUXPoS + DPoW in terms of the number of coin holdings and workload. In the community, developers and members can propose improvements or add to existing functionality. Empowering a community to vote on implementation leads to good decision-making and implementation. This allows the coin holder and miner to vote and agree on specific Elastos coin blockchain proposals / agendas. The agenda may include decisions to achieve certain functions for Elastos, establish standards for the Elastos ecosystem, implement major additions to the Elastos ecology, such as Dapp, or address other major issues, such as the establishment of community incentives and the distribution of benefits to foundations.
In addition, Elastos is adopting a hybrid mechanism to allow holders of digital currency to directly participate in major project decisions, and to use hybrid mechanisms to achieve the DAO (decentralized autonomous organization) in an efficient manner.
Detailing the implementation of Elastos’ new innovative consensus mechanism
- Establish a community committee to form a self-governing Council. Those who lock a minimum amount of Elastos coin will receive votes based on the amount of coin held. Initially, we will set one thousand Elastos coin as that minimum locked amount. (Those who lock more than ten thousand Elastos coin will become members of the Council and have the right to vote and to be elected).
- The introduction of Elastos strategic cooperation projects (Elastos Foundation is supported through investment, PR promotion, resource pooling, etc.), such as DApp, will be decided by vote by the community coordination committee.
- Anything that becomes an Elastos ecosystem strategic cooperation project should be locked in at no less than 2% of the total circulation of the project tokens in Elastos coin. In order to enter the community co-governing committee, the exchange price can not be higher than the project’s initial private investment price, and after converting to Elastos coin, must be locked for three years. (After three years, the lock-up ratio will be voted on by the project community or foundation). For the Elastos exchanged project tokens, 20% will go to the development and operation of the Foundation, and 80% will be divided among all coin holders as sweets.