Introduction

Today, all of us who live on the bleeding edge of technology that is Web3 know just how powerful it can be. Just how disruptive the current applications are, and just how unfathomably paradigm-shifting those that lie on the horizon might be. With blockchain technology being implemented within supply chains, national currencies, and even our entertainment, the rest of the world, too, is beginning to understand how much Web3 will change our systems for the better.

The current blockchains that we use, however, as they experience increased popularity, face increasing challenges as they hit their own unique roadblocks.

Commonly referred to as the ‘Blockchain Trilemma’, many popular decentralized networks face a scenario where, in the pursuit of either decentralization, security, or the ability to quickly and effectively scale, they are forced to sacrifice one of the three.

Blockchains like Core are specifically designed to overcome this problem. In Core’s case, it leverages the Proof of Work consensus mechanism of the Bitcoin blockchain, and a modified Proof of Stake mechanism, called Delegated Proof of Stake.

TL;DR

Core is a new blockchain that leverages the advantages of Bitcoin’s proof of work network and the attributes of a delegated proof of stake consensus mechanism to achieve a network that is secure, decentralized, and scalable all at once.

Is Core DAO Token safe? Who created Core DAO Token ($CORE)?

According to Newsway, it is unclear who created CORE DAO. Team member names and profiles cannot be determined as legitimate, and no contact details are made available. It was mentioned that two close friends, one from Ethereum and the other from Bitcoin, who are both obviously crypto professionals, created the Core DAO platform. In order to prevent composability, security breaches, and decentralization of the blockchain, these two anonymous pals collaborated to create the DAO.

DAO’s official website does not show explicitly a development team as well.

However, one thing to note is that CORE’s influence, as their growing community with at least 1,500,000 Twitter Followers and 170,000 Discord Members shows that it will not be dying anytime soon. If you believe in the power of social influence, then there is no harm in being one of the few people who will discover this gem before its influence continues to snowball in the following months to come.

How does Core work?

The Core network is a blockchain meant to maximize security, scalability, and decentralization by employing the use of its consensus mechanism called Satoshi Plus. True to its name, Satoshi Plus leverages the upsides of the PoW framework of the Bitcoin network, *plus* taking advantage of powers granted by the newer, more scalable DPoS model of network consensus.

This blockchain is also what we call ‘Turing-complete’, meaning that, given enough time, it can solve any computational problem. In practice, this means developers can build more complex applications. The end result? A better ecosystem. And speaking of ecosystem, the network is also EVM (Ethereum Virtual Machine) compatible so that it can run Ethereum smart contracts and dApps. This helps developers build and port their builds with convenience.

Equally important in all of this is that Core leaves behind the shortcomings of said mechanisms. That is, PoW’s weak scaling makes it very hard for developers to build applications that go beyond Bitcoin’s store-of-value proposition; advanced Web3 applications are what builders deeply want for the space. Satoshi Plus also aims to do away with Proof of Stake (PoS) networks’ (such as Ethereum) tendency to become more centralized. On paper, a PoS framework should allow for more decentralization but in practice, centralized financial custodians (CeFi) tend to contain a high percentage of voting power on any given network.

A quick glance at Etherscan, which is a publicly viewable display of the transactions and wallets on the Ethereum blockchain, shows that 8 out of 10 of the biggest holders of ETH are exchanges like Binance, Kraken, Gemini, etc. Since the network moved to PoS with the merging of its Beacon Chain consensus engine, this means that these entities wield a considerable amount of voting power.

Satoshi Plus

Satoshi Plus is the consensus mechanism by which the Core network is secured, and leverages hash power generated by miners on the Bitcoin blockchain as well as a Decentralized Proof of Stake mechanism. Keeping in mind the concept of the blockchain trilemma, the former helps it achieve decentralization while the latter helps the network achieve a level of scalability that PoW networks might not achieve due to their low transaction throughput. Together, these two consensus mechanisms help secure DAO.

This system is unique, so let’s take a closer look at its components in order to break down how exactly it works. First up, the participants that make up this whole thing:

• Validators: pictured at the bottom of the above visual, ‘validators’ are responsible for producing blocks and validating transactions on it. Validators must register and lock up a refundable CORE deposit which will be used in the validator set. Of course, in the interest of decentralization, anyone and everyone can participate.
• Relayers: In the bottom left of the visual, we see our ‘relayers’, which relay BTC ‘block headers’ to the ‘BTC light client’ in the consensus engine. As with validators, relayers must register and lock up DAO in order to participate.
• BTC Miners: These are the very same miners that secure the Bitcoin network. Miners delegate hash power to a validator. This validator can be run by them or a 3rd party. BTC miners must verify and sync identity to participate.

* It should be noted that delegation hash power does not take away from that hash power securing Bitcoin. Rather, it is re-purposed.

• $CORE holders: Consistent with other DPoS chains, it holders can delegate their holdings to the validators that actively participate in the validation process.
• Verifiers: Verifiers report malicious actors on the network. The punishment for malicious behavior could be reward or stake slashing or the jailing of validators, which are of course removed from the validator set.

Next up, we have the mechanisms through which our participants act:

• Validator elections: This is how the top 21 validators are chosen to participate in the validator set. A validator is ‘elected’ according to their hybrid score each round. Live validators are updated every 200 blocks for a more stable TPS (transactions per second). TPS describes a network’s throughput.
• Hybrid score: It has a protocol function that determines validators based on their resulting score. It derives its score from BTC hash power and the amount of DAO delegated to the validator (this will be expanded on later).
• Round: This is the cycle time, set to 1 day, in which DAO updates the validator quorum and distributes rewards. At the end of each day, the top 21 validators are elected to the validator set, and therefore bear the responsibility of producing blocks for 1 round. At the end of each round, all the rewards that are accumulated are distributed. Validator quorum is also determined at the end of each round.
• Slot: Slots are 3-second divisions of each round, and are the time in which a validator produces a block (or fails to produce). With this time division, validators produce blocks in a round robin style, meaning each of them has a chance to produce a block.
• Epoch: The cycle length that the system has to check validator status. This allows the system to exclude jailed validators from quorum and keep TPS consistent and stable. One epoch= 200 slots, or 10 minutes.

What is PoW’s role?

Okay, so we have the participants and we’ve defined some of the processes that define this engine. Now, let’s break it down by consensus mechanism. First up is Proof of Work.

In this network, BTC miners can participate by either delegating their hash power to a DAO validator or running their own validator by synchronizing their identity on both the BTC and Core blockchains using their public and private keys. When transactions are submitted, the blocks mined by the BTC miner are synced with the Core network through relayers. The network calculates the BTC hash power of each validator in each round by tracking the number of blocks produced by each miner in the BTC network over the preceding week’s same day.

As was mentioned before, a quite elegant attribute of how Core leverages BTC hash power is that miners merely delegate their power. That is, helping secure the DAO network does not take away from securing the Bitcoin network, so network security can be achieved without miners expending any extra computing power.

What about DPoS?

Like other blockchains such as Tron, it uses a system called Delegated Proof of Stake. However, this is employed in tandem with the Bitcoin Proof-of-work system and the hash power that it generates. As mentioned before, the DPoS system works by electing a rotating group of 21 validators that are voted on by token holders that delegate their own holdings.

This is in an attempt to solve the problem of high barrier-to-entry for smaller token holders who do not themselves hold a requisite amount of DAO to run a validator. One can consider the 32 ETH required to run an Ethereum validator when defining the existing prohibitive nature of some Proof of Stake networks. But, how are validators chosen? Let’s go into the aforementioned ‘hybrid scores’ that determine who is included in the validator set.

Hybrid scores: scores are calculated using a function that takes into account a validator’s hash power and staked $CORE. The function is as follows:

S = rHp/tHp ∗ m + rSp/tSp ∗ (1 − m) (1)

• S = score
• rHp = delegated hash power (count of BTC blocks produced)
• tHp = total hash power on the Core network
• rSp = stake of $CORE delegated to validator
• tSp = total stake on Core
• M = a dynamic weighting employed by Core.

As would be expected, the highest hybrid scores get chosen, and validators are ranked 1 to 21 by this score. The sequence repeats from the first rank after it reaches the last.

So, why would a network want to have less validators instead of more? After all it seems that more validators would mean more decentralization right? Well, this limited validator design is able to offer higher TPS and better scalability, and of course the PoW component grants this whole system its decentralization. Contributing further to the cause of decentralization is the fact that DAO holders can also participate by delegating their tokens to validators. Furthermore, the DPoS mechanism grants the network a degree of fault tolerance and resistance to possible attacks.

The CORE token

$CORE, the native token of this network, is what helps secure it.

The token has a hard cap of 2.1 billion tokens, meaning it functions on the scarcity principle of value. Going further, a certain percentage of rewards and transaction fees, to be determined by the DAO, will be burned. In order to ensure the longevity of the network’s reward mechanism, participants will have their rewards paid out over a period of 81 years.

The reward distribution is tabulated at the end of each round, 90% of the total rewards going to validators, and the remaining 10% going to something called the System Reward Contract, under which verifiers and relayers are paid.

What are the advantages of Core?

1. Quickly developing and popular system. Even though it is still new, they have established a number of interesting features that are up and running.
2. Fairness. It has lower entrance barriers for those users who want to be validators and other participants.

What are the disadvantages of Core?

1. Complexity. The whole protocol is rather saturated from a technical point of view which will probably make it tough to figure out for those who are new to the World of Crypto.
2. Governance by the Core team. At the moment, the developers oversee the DAO because they are still working on decentralization. They plan to change the situation in the future, but for now, the governance can hardly be called truly autonomous.

Core DAO total supply and circulating supply: DAO Tokenomics and CORE token burn explained

DAO’s tokenomics is done in a way that aims to be “among the most decentralized in blockchain history”. The following is an illustration of DAO’s token distribution as it stands today as of February 2023:

The DAO Coin has a maximum and total supply of 2.1 billion (i.e. 2,100,000,000 or 8 zeroes after the numeral 21). Based on their whitepaper, this amount is distributed based on the following:

Node Mining (839,900,000 CORE tokens; 39.995% of the total supply):

• To get Core off the ground, both miners and stakers who are securing the network must be compensated for their services. Node rewards will be distributed over an extended period of time (~81 years) to ensure long-term incentive alignment. Nodes can also receive rewards in the form of transaction fees.

Users (525,600,000 CORE tokens; 25.029%):

• From the start, it users should know that this chain is built for them. Airdropped DAO tokens will be allocated to a decentralized base of millions of users.

Contributors (Existing and Future) (315,000,000 CORE tokens; 15%):

• Compensation will incentivize past, present, and future Core contributors.

Reserves (210,000,000 CORE tokens; 10%):

• This reserve may be used over time in order to capitalize the foundation without centralizing the token supply.

Treasury (199,500,000 CORE tokens; 9.5%):

• The Treasury will give the DAO the funds necessary to build out the ecosystem.

Relayer Rewards (10,000,000 CORE tokens; 0.476%):

• Like nodes, relayers must be compensated for the services they provide to the chain’s security. Relayers also receive rewards in the form of transaction fees.

Governance

This network is guided by a decentralized autonomous organization, also known as a DAO. Currently, the Core team itself controls the DAO but when “sufficient decentralization” occurs, according to their whitepaper, control will be handed over to the DAO community. Participants in the DAO will be able to change the number of validators, regulate governance parameters, and set the percentage of burned block rewards and transaction fees.

This brings us to the exact method by which the DAO will achieve said decentralization. The path towards complete decentralization is something called “Progressive Decentralization”. As mentioned just above, the Core team will at first handle the operations of the DAO in the pursuit of getting the project to a healthy product-market fit and rate of growth. After the network achieves a certain level of maturity, operations will be gradually opened up to the entire DAO community.

The DAO has 3 phases of decentralization: Off-chain governance, then limited on-chain governance, and finally full on-chain governance.

The future of Core

So, what’s on the horizon for Core? Like many other networks, the DAO realizes that the future of Web3 is cross-chain. There are various ways to achieve this, an L0 relay or hub chain model being two avenues that are cited in Core’s documentation.

It is also focused on scalability which may see the network leveraging Ethereum scaling solutions such as rollups. This plan of growth also includes fostering the adoption of the chain by other projects and DAOs.

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