Marvin：
Our team joined Polkadot at a relatively early stage, and started using Substrate after the introduction of Boss Jiang last May, so we are also good friends with Polkadot projects such as Acala and Darwin, all of which are in the ala series.
What makes Phala special is Phala's landing products and how to distribute tokens. After the idea of Satoshi Nakamoto was carried forward, it came to 2018. At that time, I was still working part-time. Yin Hang had just completed the launch and research and development of BitcoinGold, and we discovered the problem of the blockchain.
Everyone knows that Bitcoin is the first and most well-known trustless token, which mainly uses the blockchain to solve the double-spend problem. Ethereum extends transaction scripts, executes arbitrary logic, and trusts smart contracts. But as long as the blockchain is used, the data must be made public, which makes many applications that require data confidentiality unable to be connected to the chain.
Because it is fully open and transparent, many application scenarios are limited, and sensitive information cannot be uploaded to the chain. For example, the following types cannot be used: developing an online game played by one person on Ethereum, making a defi contract with a policy of confidentiality, and wanting to Users are authenticated on the blockchain. So until now, 99.9% of blockchain projects have been difficult to implement. In order to solve this problem, we began to look for solutions. Now there are a variety of privacy protection technologies that can achieve different levels of protection. We often divide privacy protection technologies into three generations.
Zcash and Monero are the typical representatives of the first-generation technology. They realize the privacy protection of transactions through technologies such as zero-knowledge proof, ring signature, and confidential transfer. Their technology can protect the transaction privacy of native coins.
A typical representative of the second-generation technology is Aztec, a privacy protocol on Ethereum, which uses a technology similar to Zcash to achieve transaction privacy for any ERC20 token. The second-generation technology is an extension of the first generation, but they can only achieve transaction privacy, and there is nothing they can do when it comes to Turing-complete smart contracts.
To sum up: based on zero-knowledge proof, privacy protection for anonymous transactions and somewhat logical transfers can be achieved, but this is far from enough.
In the third generation of technology, we hope to expand the concept of "privacy protection" into "confidentiality protection". Privacy not only refers to the transaction privacy of users, but also protects any confidential data in smart contracts from being leaked. In the current smart contract technology, all data must be fully disclosed, and we hope that the "Confidential Smart Contract" (Confidential Smart Contract) can perform general-purpose calculations like Ethereum's Turing-complete smart contract, but does not need to expose confidential data.
At present, confidential smart contract technology can be realized through multi-party computation (MPC) and trusted execution environment (TEE). The former is based on pure cryptography technologies such as homomorphic encryption and zero-knowledge proof. It does not depend on hardware and can be efficiently applied in some specific fields, such as verifiable random numbers and distributed key generation. A million times performance loss. The latter is based on trusted computing hardware (mainly Intel's CPUs), but already enables very efficient general-purpose computing.
Phala.Network has chosen the trusted computing solution and is committed to implementing universal Turing-complete smart contracts that protect confidential data.
What are TEEs?
In fact, it is to use hardware design to realize a trusted third party (TTP) of hardware, which can receive private data input from multiple parties, honestly execute the established logic, and then feedback the result. This hardware solution has been owned by thousands of devices, which is the TEE (Trusted Execution Environment) of the CPU.
Sound tall? In fact, everyone may have such trusted hardware in their hands.
For example, the fingerprint function of the iPhone. The iPhone has a chip dedicated to fingerprint authentication and storage. It is completely impossible to interfere with the entire verification process from the outside, or to read any verification data. The chip will only tell the app developer a "yes" or "no". As long as developers can prove that the verification environment is complete, they can trust the results of fingerprint verification.
What does this set of things have to do with blockchain?
Phala is equivalent to using the TEE environment in these devices as a privacy infrastructure, and calling it through the blockchain, so that it can provide privacy computing power for the blockchain and realize the function of confidential smart contracts.
In addition to data confidentiality capabilities, we have two other advantages. The first is contract-level parallelism. Because it is non-Byzantine, we don’t need to go through each node’s consensus once to achieve trustless, which can achieve extremely high performance. The second is that it naturally supports cross-chains. Phala’s contracts are executed in parallel and need to cooperate with the interoperability protocol between smart contracts to realize mutual calls. This interoperability protocol can not only be used between contracts, but also compatible with various cross-chain methods (transfer bridge on Phala, ICMP protocol on Polkadot, etc.).
To sum up, Phala includes a main chain and a network of trusted hardware miners, and will strive to become a parallel chain of Polkadot in the future. Contracts are executed in parallel on trusted nodes, and developers deploy bridges and Dapps on the network in the form of contracts. Among them, the main chain provides cross-contract and cross-chain calls, miners provide computing power, and the transfer bridge realizes communication with external blockchains.
Polkadot has several tags:
Whether to use substrate development
Will it become a parallel chain
Whether to get Polkadot Ambassador
Inducted into Parity's Substrate Builder Program
Whether to be selected in the Polkadot Light White Paper
Whether to obtain the Web3 Foundation Grant
Are you selected for the Web3 training camp?
Phala all meet the above screening criteria. It can be said that it is tightly bound to the Polkadot ecosystem. We hope to provide other Polkadot parachains with mosaic services for the blockchain.
Of course, many, many blockchains now only have protocols, only coins, and only chains, so we have implemented a product based on Phala to help ordinary websites and apps, and help ordinary users protect and manage their private data, called W3A (Web3 Analytics).
Data is the cornerstone of all business activities today. The improvement of efficiency, technological progress, and product experience improvement all come from the alchemy of data. Today, however, data deals are still hard to come by.
1. Data is generated by users, and the collection and utilization of data has long been monopolized by Internet companies, and they usually refuse or sell data at high prices.
2. Data can be copied, so it is very difficult to deliver the original data. On the one hand, the original data contains sensitive information, and on the other hand, the data is easy to be re-trafficked.
To fill the gap between supply and demand, not only do users need to take back ownership of their data, but there also needs to be a trustless channel through which data can be traded securely. In Internet companies, the data is reported to the background by the SDK in the product for business analysis. So Phala launched a data collection solution under Web3.0, Web3 Analytics.
We can see that in the field of data collection and analysis, Google has an absolute right to speak, so is it safe to entrust Google to analyze the data of its own app and let Google hold its own data?
Therefore, through W3A, we want to change this situation and realize a decentralized data collection, analysis and trading platform, which can be used as a decentralized upgrade of Google Analytics, helping Web2.0 and Web3.0 applications to access Phala at a very low cost Network data trading market.
We have researched many blockchain projects, and all of them use Google Analytics. This is forced by the environment, because there is no such product now.
W3A's capabilities include:
– W3A-SDK: It implements event tracking (buried points) under the premise of end-to-end encryption, and the access cost is extremely low. It only needs to paste a script to realize web and mobile access.
– User data console: Users can manage, download, delete personal data, and manage access authorization through the console.
– Developer data panel: Built-in a large number of common data analysis contracts, provide a visual panel, and display it to developers.
– Data Plaza: Market-oriented data trading, providing data joint analysis function, allowing the use of built-in analysis templates or custom analysis contracts, and completing analysis and payment settlement after obtaining user authorization.
This product has already launched a trial version, but the decentralized version needs to be launched on the Phala mainnet before it can really work.
Some people may ask, is it costly to transform the backend of Web2 products into Web3? Does anyone use it?
Answer: no! With only a few lines of code, you can experience the data analysis of Web3.0, and the access cost is about 1 minute.
Now that the product is available, what is the use of Phala’s token?
Data transaction is the core capability of Phala Network, and Phala will capture the value of data and resources on the chain.
As shown in the figure, the behavior that needs to be purchased by the business in this process:
– Data transaction settlement: Phala realizes the management, analysis and transaction of private data through smart contracts, and data analysts must pay for transactions.
– Trusted computing resources: resources such as trusted computing power, on-chain status, and off-chain storage used in transactions need to be settled on the Phala network.
PHA will capture these business values. Of course, POS governance and community governance also need PHA to achieve.
What does the economic design of a PHA look like?
Phala's token, the initial distribution of PHA adopts a radical distribution strategy, by allocating 80% of PHA to target users, to achieve enhanced product/market fit (Product-Market Fit), encourage early community participants and ensure basic development steady progress.
First of all, 70% of PHA is mined, so who will dig it? It is the TEE miners, data owners (all of you here), and data developers (Phala developers) who provide privacy computing power. The release of mining rewards is very similar to Bitcoin, which is the highest at the beginning and gradually decays. In addition, we will also realize dynamic calculation power adjustment through the contract according to the mining output, as shown in the following figure:
In addition to mining, we still have 9% of the PHA issued in the form of locked StakeDrop, because Phala is committed to becoming the privacy layer infrastructure in the Web3 era. In order to allow more people to participate in this "awakening", we give people who want to participate Every spectator of this social experiment, PHA, serves as an admission ticket. Phala is a Polkadot ecology, of course, Polkadot takes priority.
For this awakening, Phala designed a total of 3 rounds of StakeDrop: the first round is for KSM users, the second round is for DOT users, and the third round is for FIL (tentative) users, and a total of 90 million PHAs have been prepared for this.
After referring to Edgeware's LockDrop, NuCypher's WorkLock, and Rocco's WarLock mechanisms, we think that LockDrop is very good; and since the Kusama network cannot use smart contracts to lock positions, we have created a new form: StakeDrop. Participants nominate to the verification nodes in the whitelist by mortgaging KSM in their hands to obtain StakeDrop points, which will eventually be exchanged for PHA based on StakeDrop points. We don't want the value of the community StakeDrop to be limited by the time of the mainnet, so the PHA of StakeDrop will be distributed in the form of ERC20 tokens before the Phala mainnet goes live. We will continue to monitor and record Kusama on-chain staking through open-source scripts. If the participant's mortgage meets our requirements, after the mortgage expires, the participant can claim the released PHA on Ethereum.
You will say, why not lock the position directly with the smart contract?
Because there is no way to deploy KSM interactive smart contracts on Kusama, so use this method first to achieve good results.
This design has three advantages:
1. No opportunity cost: Mortgage KSM, you can get KSM mortgage income and PHA at the same time.
2. Ultra-low threshold: 10 KSM, staking for 30 days, you can get it with fool-like operation.
3. Safe and reliable: KSM whitelist nodes that have been officially screened by Phala have guaranteed income.
When will it start? The snapshot time is from May 15th to August 15th, because it takes at least 30 days, so everyone must mortgage before July 15th. Mortgage objects: Phala whitelist verification phase. We will give a list in the materials, and Phala will also make mortgage tools. Our cooperative nodes basically cover mainstream Polkadot nodes at home and abroad. We would like to thank Hashquark, Liebi, MathWallet, Noeasy, Polkaworld, and SSSnodes for their strong support for this event.
This is the core. We estimate the corresponding time per 100 KSM and the PHA revenue reference.
What is the ratio of total network points to the threshold?
That is, our ideal expectation is that 2.7 million KSM will participate in this mortgage activity, and the actual participation amount/2.7 million KSM is this ratio. If there are more than 2.7 million KSM at that time, we will transfer more from the part of FIL StakeDrop to KSM holders. Still the same sentence: Polkadot first.
You may ask, how long is the right mortgage? This depends on personal needs. Many people want to cash out KSM at a high price. We also consider everyone's needs, so we support the mortgage mechanism of "breakpoint resume". The staking time and the received rewards are not linear, but exponentially rising. Assuming that 100 KSM is invested and the staking is 30 days, and the validators before the break and re-mortgage are all whitelist validators, the reward is still 100 KSM × 30 days. But suppose you staked 100 KSM on the 1st-29th day, and canceled it on the 29th day; and then started to stake from the 31st day to the 33rd day, but NPoS allocated 100 KSM to your whitelist validator, and the reward is the whitelist validator 100 KSM received × (29+2) days. In addition, the humanized part is that we don’t want some StakeDrops to deduct the principal and interest, so everyone can receive the income of mortgaging KSM.
How to calculate the reward if I staked to both whitelist validators and non-whitelist validators at the same time?
As shown in the picture: the pink dots are ordinary verifiers, the white circles are whitelist verifiers, and the green dots are your actual nominations.
Assuming that 100 KSM is invested and mortgaged for 30 days:
If 90 KSM is staked to a whitelist validator and 10 KSM is given to a non-whitelist validator, only 90 KSM * 1 month reward will be obtained.
Why do you do this? Because we consider that the income of some non-whitelist nodes may be high (Polkadot’s income calculation is very dynamic).
Pang Xiaojie:
The audience asked, why are mining machines so expensive?
Marvin：
We don’t actually sell mining machines, because Phala doesn’t specify mining machines like many projects. As long as anyone has a 16-year-old Intel processor computer and the motherboard supports SGX, they can mine. However, the cheapest general home computer is 3,000 yuan, so we found a relatively cheap motherboard and made a configuration table to help community fans assemble the computer, which is equivalent to selling an assembly manual fee.
As for why we have recently increased the price by an average of 200 yuan per unit, it is because of the recent global shock and closure due to the impact of the new crown pneumonia. In particular, South Korea, Tiben, and the Philippines have all been greatly affected. As a result, the prices of DDR and NAND FLASH in the world have skyrocketed, so the overall price of each Sentinel host has risen by nearly 200 yuan.
As for why the average price of a single sentinel is significantly higher than that of the cluster, one is that our cluster adopts a strategy of small profits but high sales, and we also encourage everyone to buy clusters. The second is that the cost of the cluster is lower than that of the appearance structural parts, and the shared sales cost and after-sales insurance are lower.
Again, don’t spend money to buy coins if you can get StakeDrop for free, and don’t buy coins or mining machines if you have an idle computer.
Pang Xiaojie:
The audience asked, although the current bitcoin transaction is isolated from the real identity, the connection between the account and the transaction can also be traced through the address ID, IP, etc., so as to analyze the identity information of a specific person in reality. How can the blockchain world protect the personal information that companies and individuals do not want to disclose as much as possible?
Marvin：
First, where is the ip address obtained from? In fact, every website and app must record everyone’s address, so as long as you use an exchange or wallet, you will leave traces.
The first method is to complete the transaction with only on-chain actions.
The second method is to promote these more privacy-protecting products and use Phala’s W3A-SDK to collect data. As long as you don’t agree, no one can move your data. As long as you agree, they have to be in your Use within the scope of authorization.
Pang Xiaojie:
The audience asked, Alibaba Cloud was successfully attacked yesterday, which is very rare. Alibaba's defense capabilities are obvious to all, but it was not spared yesterday. With the improvement of technology, the attack capability is bound to increase. How should Phala, as the privacy gatekeeper, deal with it? Where do we go from here?
Marvin：
You need to distinguish between the concepts of server (machine), server, database, and data on the chain. The server is attacked because the data is stored in a safe, and the password of the safe is managed by someone. What if the key to the data is in your hands and only you can unlock it?
In this architecture, even if hackers attack Alibaba Cloud, it is useless, because all the decrypted data is encrypted. What about attacking the TEE chip? At present, there are some cracking papers in the strict experimental environment, but Intel has adopted a very clever upgrade method. As long as the miner's TEE does not update the patch, he will be rejected by Phala, which ensures a lot of security. In addition, the value of the Phala network is that it does not rely on Intel's TEE environment, and can also support AMD, ARM and other chip standards, so it is safer than centralized cloud services.
Pang Xiaojie:
The audience asked, there are currently many hidden coins on the market, such as XMR, ZEC, and Dash, each of which has its own algorithm and advantages and disadvantages. I would like to ask where is the opportunity for Phala to break out?
Marvin：
This part was shared in the session of Wang Po selling melons just now. In general, XMR, ZEC, and Dash provide anonymous currency services, while Phala provides privacy smart contract services, just like the difference between Bitcoin and Ethereum.
Pang Xiaojie:
The audience asked, Phala’s streaming democracy mechanism is very innovative, can you talk about it more specifically? What are its advantages over the current popular node committee governance (such as EOS)?
Marvin：
We feel that Polkadot's NPOS mechanism is very innovative, so the consensus and governance framework refers to many Polkadot designs. However, we have unique innovations in three points:
– Anonymous voting, we will use the confidentiality contract to complete the voting, so the anonymity of democracy can be guaranteed
– Flow democratic voting mechanism and algorithm to fully increase voting participation rate
– Restructure the committee into a DAO, increase the degree of openness, and ensure that the interests of the decision-making layer are bound to the community through the mortgage system
I won’t talk about anonymous voting, it’s just what Phala is good at. Let’s talk about stream democracy.
Streaming democracy originated from Bryan Ford's paper "Delegative Democracy" published in 1884, that is, for a certain issue, you can vote directly, or you can delegate voting rights to a representative, and then the representative votes to decide the issue.
An example of the discovery of streaming democracy is that Google employees decide what to eat today through Google Votes. If someone does not know what to eat today, he first entrusts the decision-making power to a colleague with similar tastes, and then the colleague decides what to eat today. The advantage of streaming democracy lies in the compromise between direct democracy and indirect democracy. It not only ensures a sufficiently authentic and pure democracy, but also increases the turnout rate and can solve problems professionally and rationally. However, the implementation process of streaming democracy is very complicated and requires frequent and real-time statistics of voting rights. For example, Ah Qing and I share the same taste, I can entrust her to vote for me, and I can withdraw my vote at any time if I don’t like her, and she can entrust my vote to others, such as Xiaojie, Xiaojie can re-entrust the vote we entrusted. Entrusted to gavin wood, delivered again and again.
But why is there no blockchain project that is used in this way? Because of the performance problem on the chain, in streaming democracy, its delegation relationship is a tree. In order to calculate and update the number of votes for each node, each vote needs to traverse the tree in order or follow-up. The time complexity is O(n).
The implementation technology of this part is more difficult in the traditional blockchain, because the huge calculation data of streaming democracy leads to limited block size and high gas handling fee. In the Phala protocol, we will use the TEE calculation method to solve performance problems while ensuring the privacy of streaming democracy.
In addition, we will use Liu Minzhu in voting, but the nomination logic still refers to Polkadot, but we will try our best to be as anonymous as possible.
Pang Xiaojie:
The audience asked, as a node service provider, if you want to participate, how can you participate? Can you tell us about the PHA node model, node construction method and node revenue distribution method?
Marvin：
At present, the node configuration requirements of Phala have not been determined, but they are roughly as follows:
– CPUs that support SGX
– Other configurations are similar to Kusama
For the construction process, we will write a tutorial and publish it after the testnet is released. Please look forward to it.
Pang Xiaojie:
Thank you Boss Tong for sharing and answering! I am also very grateful to the "show" friends who participated in the Math Show #003 event tonight~
Link:
Link:
http://mathshow.mikecrm.com/2QEz163
This issue of Math Show #003's "show" friends meeting is over, thank you again for your time and listening, we will see you in the next issue.
