Blockchain
Core DAO merges proof-of-work (PoW) and delegated proof-of-stake (DPoS) in hopes of solving the blockchain trilemma.
The blockchain trilemma refers to the tradeoffs layer 1 solutions must make when building a blockchain network. Between optimal security, scalability and decentralization, networks only have to choose two of the three elements.
Ethereum, for example, prioritizes security and decentralization, but is not extremely scalable. For this reason, with more users on the network, gas prices increase and transaction speeds decrease. The network has since introduced sidechains – layer-2 solutions – to solve this problem.
Core DAO has taken a different approach by using its Satoshi Plus Consensus. This consensus mechanism bridges PoW and DPoS, Rich Rines, a first-time employee at Core DAO, told Blockworks.
“You get traditional DPoS elements on one side, and the other part that’s quite unique is the proof-of-work part or delegated hash,” Rines said. “We have an actor in our system called relayers, and what they do is run an on-chain light client for Bitcoin.”
Bitcoin block headers are sent to the Bitcoin Light client through these relayers, Rines explains. Miners securing the Bitcoin network have the option to choose to have their hash power be the Satoshi Plus consensus – meaning they must delegate their hash to a validator controlled by themselves or a third party.
It is important to note that this kind of delegation will simply reuse miners’ work without them having to choose between securing two different networks. This way, the network can remain decentralized by Bitcoin’s computing power and scalable by DPoS.
“It is very difficult to be as decentralized as Bitcoin, we idolize Bitcoin… is not an extra energy consumption,” said Rines.
Combining Bitcoin’s computing power for decentralization, DPoS leadership that enables scalability, and the entire network operations to maintain security, Rines notes that Core DAO can create a layer-1 solution that combines the three core elements of blockchain technology. .
Core DAO recently launched a $200 million ecosystem fund to grow the Satoshi Plus consensus. The project will use the fund to grow projects in the ecosystem, fund marketing, research and recruiting programs.
“Unlike other projects we look at it a little differently, the question we always want answered is is this good for our users, we want to give them unique experiences they can’t get anywhere else, and we want to keep doubling down on that and triple,” Rines said.