The First Step Towards Mass Adoption: Finschia Network

Digest2022.12.22

 

The First Step Towards Mass Adoption: Finschia Network

 

► Transformation of the Web Paradigm

 

The evolution of the Web from the time of the IT boom to the present has had a great impact on our everyday lives. The development of the Internet has greatly expanded the amount of available information and changed the way we access and consume vast amounts of information around the world. Starting with Web1, also known as the “Static” Web or the first stage of the World Wide Web, the Internet first began to be widely used, revolutionizing the way people access various content and consume information. With Web2, the concept of dynamic and interactive websites where users could easily share and create content was introduced. This was followed by the rapid rise of social media (SNS), which changed the way people interact with others. People were able to interact with others and share their thoughts and experiences with a much larger audience in methods that were not possible before.

 

The upcoming Web3.0 is expected to bring much greater and more significant changes to our lives. Many consider the concept of Web3.0 is new, however, it has already been proposed in 1998 by Tim Bernars, the founder of the World Wide Web. Until then, Web3.0 was simply called the “Semantic” Web and was interpreted as a service providing users with more intelligent and customized information. However, the introduction of blockchain and smart contracts has shown the possibility of the decentralized database drastically changing how the users take ownership of the information and relate to the world, which even further expanded the concept of Web3.0.

 

 

► Finschia Network: A 3rd-Generation Blockchain

 

Various dApps and platforms based on blockchain technology started to appear, while the developers who entered the early market attempted to create perfect Web 3 services based on blockchain smart contracts. In the early stages of blockchain technology, it was possible to receive investments through the enormous interest of numerous investors for something simply being a “blockchain-based platform.” However, the blockchain platform has degenerated into a service that is difficult to use for the public as it only emphasized its functions and not the convenience when the public has not even founded a solid understanding of the “blockchain” concept. In the end, these dApps scored remarkably low usability. As only a small percentage of users with an understanding of blockchain used the service, it has failed to create a circulating business model.

 

With this background, LINE Blockchain has a motto of “Blockchain for All.” Starting with the 1st generation “Alder” Chain in 2019, it went through the “Bamboo” Mainnet and the 2nd generation “Daphne” Mainnet, finally developing the 3rd generation Mainnet, Finschia Network. As well as this, as the first milestone for the continuous navigation and pioneering toward Web 3, the Bamboo Mainnet LINK(LN) has been stably transferred upon the launch of the Finschia Network.

 

The Finschia Network has greatly enhanced the scalability, stability, and security of the existing blockchain and has focused on usability so that users can easily and quickly use various Web3 services. In addition, by implementing user-friendly services that can be found on the existing webs or mobiles along with the application of the core blockchain items for rapid mass adoption, users will be able to create value directly through their content.

 

LINE Blockchain will encourage the formation of an active LINE Blockchain ecosystem with Web3, which will also create a participatory blockchain platform that grows with all of the users who participate and contribute to the ecosystem.

 

 

► Technical Features of the Finschia Network

 

■ Ostracon: An Independent Consensus Layer

 

Blockchains use a technology called a “Distributed Ledger” that consists of networks connected between individuals. In order to record and manage the transaction information, several network participants exist. Therefore, each blockchain adopts various consensus algorithms suitable for each purpose in order to achieve a consensus on efficient and smooth transaction validation and block generation by the network participants.

 

LINE Blockchain has designed a blockchain mainnet based on a consensus mechanism called Delegated Proof of Stake(DPoS) and Practical Byzantine Fault-Tolerant(PBFT), which is believed to best fit the desired direction.

 

Ostracon, LINE’s consensus algorithm developed in this way, is one of the key items that create and verify blocks for the 3rd generation mainnet of LINE Blockchain Finschia. By borrowing the fast finality and fork resistance of the blockchain from the existing Tendermint-BFT consensus mechanism of Cosmos and supplementing additional features, the most suitable mainnet for the LINE Blockchain has been created.

 

In the existing Tendermint consensus structure, a leader is selected from among the validators validating the blocks. The leader creates a block while the validator monitors and verifies whether the block creation and consensus results have been properly reflected. Due to this structure, a method called Round-robin is used to alternately select a leader for the block validation. Since the next block producer is pre-selected with this method, the next leader can be guessed in advance by the group of validators. Therefore, if the leader becomes the target of a DDoS attack, there is a concern that it may be difficult to maintain the potential stability of the blockchain.

 

To technically solve these problems, Ostracon has introduced a security enhancement technology called VRF (Verifiable Random Function). VRF is a technology that provides randomness on-chain, and it has been applied to the process of selecting a leader so that no one can predict the next leader. This feature allows successful protection of the network from attackers and enhances security.

 

In addition, Finschia can predict attack points and possibilities according to the number of nodes, block situations that paralyze the system through DDoS attacks, and promptly respond to problems that may occur through the use of Gas Fees and throttling by establishing a system. LINE Blockchain will respond flexibly to the rapidly evolving blockchain technology and continue to maintain a stable network by researching new technologies that can be additionally applied to consensus algorithms in the future.

 

** Delegated Proof of Stake (DPoS): A consensus algorithm in which the representative nodes make decisions by consensus according to the token share ratio
** Practical Byzantine Fault-Tolerant (PBFT): An algorithm that mathematically proves the reliability of the network consensus if the total number of nodes is 3a+1 or more.
** Tendermint: A blockchain engine that handles the networking and consensus layers of a blockchain.
** Fork: The act of developers copying the entire software source code and developing a new independent blockchain software.
** Throttling: An act of restricting execution of the same data or a large amount of data.

 

■ CosmWasm: Improved Performance and Security

 

Ethereum Mainnet, which was developed by introducing the concept of smart contracts for the first time, developed its own development language called Solidity which can be used in the Ethereum Virtual Machine(EVM) for executing written codes. Since then, it reformed as an overwhelmingly widely used smart contract programming language by blockchain developers. However, it has been pointed out that the entry barriers and low security for the new developers due to an unfamiliar language could become an obstacle to the popularization of blockchain technology.

 

The Finschia provides a smart contract function that creates a wide range of opportunities for various projects to onboard to the platform as well as an easy dApp development environment towards Web3. Although blockchain has various development languages such as Solidity mentioned above, the Finschia applied the WebAssembly virtual machine-based CosmWasm to prevent the entry barrier from getting higher as much as possible for the developers due to the independent language when developing the smart contract. CosmWasm with the WebAssembly function applied boasts a high level of security and speed. Each business can use various general programming languages to create, deploy, and upgrade smart contracts that can realize PMF (Product Market Fit). In addition, ERC-20 and ERC-721 compatible tokens can be easily implemented considering the interoperability among other blockchains.

 

Borrowing the technical advantages of Cosmos from a broad perspective, it is designed to enable the easy implementation of the necessary functions by gathering each function in a module format. We plan to support not only our developments but also other services to deploy and use smart contracts through CosmWasm, which has superior performance, stability, and security compared to EVM. To do so, we will gradually build a developer-friendly ecosystem by focusing on the developer tool preparation to allow developers to easily use the Rust language in the future.

 

** CosmWasm: A platform that enables smart contracts to operate on blockchains built with Cosmos SDK
** ERC-20: The standard for coins issued on the Ethereum blockchain network
** ERC-721: The standard of the Non-Fungible Token (NFT) issued on the Ethereum blockchain network

 

■ A Fast-Track for Ecosystem Establishment

 

To build a diverse and broad blockchain ecosystem, it is very important to improve the development convenience of the developers building the dApp services and to provide a more convenient development environment. Therefore, LINE Blockchain supports virtual machines such as the previously described CosmWasm and has provided the LINE Blockchain Developers (LBD) to lower the entry barrier for blockchain development. As for the existing mainnet blockchains, there are difficulties in setting up the simple logic one by one and a very high learning cost. However, LBD supports the consoles and APIs required for development and provides functions that enable token and transaction management. In addition, smart contract functions for business logic will be released so that the functions required for each service can be implemented on-chain in the future.

 

Another notable strength of the 3rd generation LINE Blockchain is the token and collection module. LINE Blockchain implemented an upgraded module of the ERC-20 and ERC-721 created based on Ethereum. This module will provide a foundation to expand the business utilizing various token models. In this way, the Finschiaㅜ was implemented with Ostracon, CosmWasm, and LINE Blockchain Developers according to each role. Also, independent layers were built according to each of these roles. The application layer will be in charge of the business logic of each validator node and the consensus layer will play a role in constructing a blockchain network through the Ostracon consensus algorithm as well as producing and storing safe and irreversible blocks.

 

 

►The Establishment of a Participatory Mainnet Ecosystem

 

■ The Changing Token Economy

 

For many blockchain projects, we believe the ultimate purpose of the token economy is to provide incentives to the users of the network, and through this, to make it available for more people, thereby achieving the usability and versatility of the platform. As a simple example, in the Ethereum network, users directly participate in the network, such as creating and verifying blocks through staking and then earning incentives. Just as many traditional businesses provide good services to create use value and attract users, the blockchain platform can also grow the ecosystem further by providing an easy-to-use, transparent platform and a fair token economy.

 

In the past, an imbalanced and non-transparent token economy through fundraising methods such as the Initial Coin Offering (ICO) could be found in several cases. In addition, most blockchain projects generally had a structure in which compensations were concentrated on the participants (miners, validators, etc.) who contributed to the stable operation of the blockchain. The tokens distributed in this way were difficult to create actual end users and built an investor-oriented ecosystem that was difficult to sustain.

 

To solve these problems, the Finschia has constructed a contribution-based token economy that provides compensation to the dApp services and users that contribute to the activation of the network. Through the Finschia blockchain platform, a new service platform was built based on Web3 as well as an actual demand-oriented ecosystem where many participants can participate and receive compensation according to their contribution. As a stepping stone, 1) a separate manual token issuance mechanism will be removed, 2) the reserve will be managed transparently through on-chain governance, and 3) rewards will be distributed according to the contribution evaluation system from the Finschia. The Finschia will introduce a predictable inflation mechanism in which new tokens are transparently issued by the protocol in proportion to the degree of activation of the ecosystem. As transactions and payments through tokens become more active, the value of the entire network increases. This will in turn lead to an influx of new users, creating a token economy with a virtuous-cycle structure.

 

■ Towards an Open Network

 

On-chain governance is the process of using decentralized mechanisms to make decisions and manage a blockchain network. It is a type of decentralized decision-making body where network participants come together to make decisions about the future of the network. A well-designed on-chain governance system should be transparent, decentralized, and secure with anyone being able to participate. Also, the results of the vote must be recorded on the blockchain for everyone to check.

 

The Finschia is not exclusively operated by a specific organization. It will be operated transparently and neutrally by the users’ participation in the network and the on-chain governance operation method which everyone can check on the blockchain program. The ecosystem participants can delegate their voting rights by choice and the ecosystem representatives who directly participate in the governance voting will democratically decide on the key policies related to technology, economy, governance, consensus, etc.

 

To realize this, LINE Blockchain is steadily moving towards the goal of building a decentralized and neutral platform for anyone to publicly participate in and create. LINE Blockchain will ultimately operate the platform through open source and on-chain governance by making it an open network where anyone can participate.

 

 

►Conclusion

 

The user experience(UX) of blockchain-based services plays a very important role in user adoption. This is because an inconvenient UX leads to a negative perception of blockchain technology, which could become an obstacle to the popularization of blockchain. Until now, users experienced difficulty when adapting to blockchain-based services due to complex interfaces, slow performance, or poor interoperability with the existing systems. As a result, to ensure the successful adoption of blockchain services, it is essential to focus on providing a user-friendly UX that satisfies the users’ needs and expectations. To solve these difficulties, LINE Blockchain has steadily prepared the Finschia with the goal of “Blockchain for All” and was finally able to launch it. Through the upgrade of the Finschia, we would like to popularize it by building a new service platform called the authentic Web3 and a participatory blockchain ecosystem where many users can easily participate and use it. LINE Blockchain has stably operated a blockchain platform and has put in a continuous effort to popularize it. With this experience and know-how, it will move towards a people-centered Web3 platform where many users can realize the value of ownership and use the new services utilizing blockchain.

List
The First Step Towards Mass Adoption: Finschia Network

The First Step Towards Mass Adoption: Finschia Network

Digest・2022.12.22

 

The First Step Towards Mass Adoption: Finschia Network

 

► Transformation of the Web Paradigm

 

The evolution of the Web from the time of the IT boom to the present has had a great impact on our everyday lives. The development of the Internet has greatly expanded the amount of available information and changed the way we access and consume vast amounts of information around the world. Starting with Web1, also known as the “Static” Web or the first stage of the World Wide Web, the Internet first began to be widely used, revolutionizing the way people access various content and consume information. With Web2, the concept of dynamic and interactive websites where users could easily share and create content was introduced. This was followed by the rapid rise of social media (SNS), which changed the way people interact with others. People were able to interact with others and share their thoughts and experiences with a much larger audience in methods that were not possible before.

 

The upcoming Web3.0 is expected to bring much greater and more significant changes to our lives. Many consider the concept of Web3.0 is new, however, it has already been proposed in 1998 by Tim Bernars, the founder of the World Wide Web. Until then, Web3.0 was simply called the “Semantic” Web and was interpreted as a service providing users with more intelligent and customized information. However, the introduction of blockchain and smart contracts has shown the possibility of the decentralized database drastically changing how the users take ownership of the information and relate to the world, which even further expanded the concept of Web3.0.

 

 

► Finschia Network: A 3rd-Generation Blockchain

 

Various dApps and platforms based on blockchain technology started to appear, while the developers who entered the early market attempted to create perfect Web 3 services based on blockchain smart contracts. In the early stages of blockchain technology, it was possible to receive investments through the enormous interest of numerous investors for something simply being a “blockchain-based platform.” However, the blockchain platform has degenerated into a service that is difficult to use for the public as it only emphasized its functions and not the convenience when the public has not even founded a solid understanding of the “blockchain” concept. In the end, these dApps scored remarkably low usability. As only a small percentage of users with an understanding of blockchain used the service, it has failed to create a circulating business model.

 

With this background, LINE Blockchain has a motto of “Blockchain for All.” Starting with the 1st generation “Alder” Chain in 2019, it went through the “Bamboo” Mainnet and the 2nd generation “Daphne” Mainnet, finally developing the 3rd generation Mainnet, Finschia Network. As well as this, as the first milestone for the continuous navigation and pioneering toward Web 3, the Bamboo Mainnet LINK(LN) has been stably transferred upon the launch of the Finschia Network.

 

The Finschia Network has greatly enhanced the scalability, stability, and security of the existing blockchain and has focused on usability so that users can easily and quickly use various Web3 services. In addition, by implementing user-friendly services that can be found on the existing webs or mobiles along with the application of the core blockchain items for rapid mass adoption, users will be able to create value directly through their content.

 

LINE Blockchain will encourage the formation of an active LINE Blockchain ecosystem with Web3, which will also create a participatory blockchain platform that grows with all of the users who participate and contribute to the ecosystem.

 

 

► Technical Features of the Finschia Network

 

■ Ostracon: An Independent Consensus Layer

 

Blockchains use a technology called a “Distributed Ledger” that consists of networks connected between individuals. In order to record and manage the transaction information, several network participants exist. Therefore, each blockchain adopts various consensus algorithms suitable for each purpose in order to achieve a consensus on efficient and smooth transaction validation and block generation by the network participants.

 

LINE Blockchain has designed a blockchain mainnet based on a consensus mechanism called Delegated Proof of Stake(DPoS) and Practical Byzantine Fault-Tolerant(PBFT), which is believed to best fit the desired direction.

 

Ostracon, LINE’s consensus algorithm developed in this way, is one of the key items that create and verify blocks for the 3rd generation mainnet of LINE Blockchain Finschia. By borrowing the fast finality and fork resistance of the blockchain from the existing Tendermint-BFT consensus mechanism of Cosmos and supplementing additional features, the most suitable mainnet for the LINE Blockchain has been created.

 

In the existing Tendermint consensus structure, a leader is selected from among the validators validating the blocks. The leader creates a block while the validator monitors and verifies whether the block creation and consensus results have been properly reflected. Due to this structure, a method called Round-robin is used to alternately select a leader for the block validation. Since the next block producer is pre-selected with this method, the next leader can be guessed in advance by the group of validators. Therefore, if the leader becomes the target of a DDoS attack, there is a concern that it may be difficult to maintain the potential stability of the blockchain.

 

To technically solve these problems, Ostracon has introduced a security enhancement technology called VRF (Verifiable Random Function). VRF is a technology that provides randomness on-chain, and it has been applied to the process of selecting a leader so that no one can predict the next leader. This feature allows successful protection of the network from attackers and enhances security.

 

In addition, Finschia can predict attack points and possibilities according to the number of nodes, block situations that paralyze the system through DDoS attacks, and promptly respond to problems that may occur through the use of Gas Fees and throttling by establishing a system. LINE Blockchain will respond flexibly to the rapidly evolving blockchain technology and continue to maintain a stable network by researching new technologies that can be additionally applied to consensus algorithms in the future.

 

** Delegated Proof of Stake (DPoS): A consensus algorithm in which the representative nodes make decisions by consensus according to the token share ratio
** Practical Byzantine Fault-Tolerant (PBFT): An algorithm that mathematically proves the reliability of the network consensus if the total number of nodes is 3a+1 or more.
** Tendermint: A blockchain engine that handles the networking and consensus layers of a blockchain.
** Fork: The act of developers copying the entire software source code and developing a new independent blockchain software.
** Throttling: An act of restricting execution of the same data or a large amount of data.

 

■ CosmWasm: Improved Performance and Security

 

Ethereum Mainnet, which was developed by introducing the concept of smart contracts for the first time, developed its own development language called Solidity which can be used in the Ethereum Virtual Machine(EVM) for executing written codes. Since then, it reformed as an overwhelmingly widely used smart contract programming language by blockchain developers. However, it has been pointed out that the entry barriers and low security for the new developers due to an unfamiliar language could become an obstacle to the popularization of blockchain technology.

 

The Finschia provides a smart contract function that creates a wide range of opportunities for various projects to onboard to the platform as well as an easy dApp development environment towards Web3. Although blockchain has various development languages such as Solidity mentioned above, the Finschia applied the WebAssembly virtual machine-based CosmWasm to prevent the entry barrier from getting higher as much as possible for the developers due to the independent language when developing the smart contract. CosmWasm with the WebAssembly function applied boasts a high level of security and speed. Each business can use various general programming languages to create, deploy, and upgrade smart contracts that can realize PMF (Product Market Fit). In addition, ERC-20 and ERC-721 compatible tokens can be easily implemented considering the interoperability among other blockchains.

 

Borrowing the technical advantages of Cosmos from a broad perspective, it is designed to enable the easy implementation of the necessary functions by gathering each function in a module format. We plan to support not only our developments but also other services to deploy and use smart contracts through CosmWasm, which has superior performance, stability, and security compared to EVM. To do so, we will gradually build a developer-friendly ecosystem by focusing on the developer tool preparation to allow developers to easily use the Rust language in the future.

 

** CosmWasm: A platform that enables smart contracts to operate on blockchains built with Cosmos SDK
** ERC-20: The standard for coins issued on the Ethereum blockchain network
** ERC-721: The standard of the Non-Fungible Token (NFT) issued on the Ethereum blockchain network

 

■ A Fast-Track for Ecosystem Establishment

 

To build a diverse and broad blockchain ecosystem, it is very important to improve the development convenience of the developers building the dApp services and to provide a more convenient development environment. Therefore, LINE Blockchain supports virtual machines such as the previously described CosmWasm and has provided the LINE Blockchain Developers (LBD) to lower the entry barrier for blockchain development. As for the existing mainnet blockchains, there are difficulties in setting up the simple logic one by one and a very high learning cost. However, LBD supports the consoles and APIs required for development and provides functions that enable token and transaction management. In addition, smart contract functions for business logic will be released so that the functions required for each service can be implemented on-chain in the future.

 

Another notable strength of the 3rd generation LINE Blockchain is the token and collection module. LINE Blockchain implemented an upgraded module of the ERC-20 and ERC-721 created based on Ethereum. This module will provide a foundation to expand the business utilizing various token models. In this way, the Finschiaㅜ was implemented with Ostracon, CosmWasm, and LINE Blockchain Developers according to each role. Also, independent layers were built according to each of these roles. The application layer will be in charge of the business logic of each validator node and the consensus layer will play a role in constructing a blockchain network through the Ostracon consensus algorithm as well as producing and storing safe and irreversible blocks.

 

 

►The Establishment of a Participatory Mainnet Ecosystem

 

■ The Changing Token Economy

 

For many blockchain projects, we believe the ultimate purpose of the token economy is to provide incentives to the users of the network, and through this, to make it available for more people, thereby achieving the usability and versatility of the platform. As a simple example, in the Ethereum network, users directly participate in the network, such as creating and verifying blocks through staking and then earning incentives. Just as many traditional businesses provide good services to create use value and attract users, the blockchain platform can also grow the ecosystem further by providing an easy-to-use, transparent platform and a fair token economy.

 

In the past, an imbalanced and non-transparent token economy through fundraising methods such as the Initial Coin Offering (ICO) could be found in several cases. In addition, most blockchain projects generally had a structure in which compensations were concentrated on the participants (miners, validators, etc.) who contributed to the stable operation of the blockchain. The tokens distributed in this way were difficult to create actual end users and built an investor-oriented ecosystem that was difficult to sustain.

 

To solve these problems, the Finschia has constructed a contribution-based token economy that provides compensation to the dApp services and users that contribute to the activation of the network. Through the Finschia blockchain platform, a new service platform was built based on Web3 as well as an actual demand-oriented ecosystem where many participants can participate and receive compensation according to their contribution. As a stepping stone, 1) a separate manual token issuance mechanism will be removed, 2) the reserve will be managed transparently through on-chain governance, and 3) rewards will be distributed according to the contribution evaluation system from the Finschia. The Finschia will introduce a predictable inflation mechanism in which new tokens are transparently issued by the protocol in proportion to the degree of activation of the ecosystem. As transactions and payments through tokens become more active, the value of the entire network increases. This will in turn lead to an influx of new users, creating a token economy with a virtuous-cycle structure.

 

■ Towards an Open Network

 

On-chain governance is the process of using decentralized mechanisms to make decisions and manage a blockchain network. It is a type of decentralized decision-making body where network participants come together to make decisions about the future of the network. A well-designed on-chain governance system should be transparent, decentralized, and secure with anyone being able to participate. Also, the results of the vote must be recorded on the blockchain for everyone to check.

 

The Finschia is not exclusively operated by a specific organization. It will be operated transparently and neutrally by the users’ participation in the network and the on-chain governance operation method which everyone can check on the blockchain program. The ecosystem participants can delegate their voting rights by choice and the ecosystem representatives who directly participate in the governance voting will democratically decide on the key policies related to technology, economy, governance, consensus, etc.

 

To realize this, LINE Blockchain is steadily moving towards the goal of building a decentralized and neutral platform for anyone to publicly participate in and create. LINE Blockchain will ultimately operate the platform through open source and on-chain governance by making it an open network where anyone can participate.

 

 

►Conclusion

 

The user experience(UX) of blockchain-based services plays a very important role in user adoption. This is because an inconvenient UX leads to a negative perception of blockchain technology, which could become an obstacle to the popularization of blockchain. Until now, users experienced difficulty when adapting to blockchain-based services due to complex interfaces, slow performance, or poor interoperability with the existing systems. As a result, to ensure the successful adoption of blockchain services, it is essential to focus on providing a user-friendly UX that satisfies the users’ needs and expectations. To solve these difficulties, LINE Blockchain has steadily prepared the Finschia with the goal of “Blockchain for All” and was finally able to launch it. Through the upgrade of the Finschia, we would like to popularize it by building a new service platform called the authentic Web3 and a participatory blockchain ecosystem where many users can easily participate and use it. LINE Blockchain has stably operated a blockchain platform and has put in a continuous effort to popularize it. With this experience and know-how, it will move towards a people-centered Web3 platform where many users can realize the value of ownership and use the new services utilizing blockchain.

List