By popular demand: A quick take on the recent news

This morning a good amount of people in the Dojo asked me about the latest Release by Origin Trail that they presented here on medium.¹ Most investors out there have been very curious about the amount of TRAC tokens needed to run a node on the Origin Trail network and couldn’t find any definite answers in the post I cited. I can’t give you any numbers either but I would like to highlight the aspects that stood out most to me and offer some predictions based on that. This is not an in depth analysis like I usually like to do, it’s more of a quick shot from the hip that I would still like to share because readers out there might find it useful. As I might get something wrong your comments are very welcome so we can try to make sense of this together. Here we go:

GS1 Standard Importer

One of the biggest steps forward for Origin Trail is that they successfully implemented an importer that can get all data stored in GS1 standard onto the Origin Trail protocol. GS1 is a standard (and a non-profit organization) brought forward in the 1970s that works behind most bar codes used today in retail, health care and other industries. They will introduce more standards over the course of this year so it will be even more easy for existing businesses to use TRAC for managing their supply chains without migrating to a totally new system (this has always been one of the major selling points to me in regards of the business model, the bar of entry to starting to use the service is relatively low in comparison to other supply blockchains and it will be lowered further).

Nodes on the Origin Trail network

The second major news in the recent update concerns their staking model and incentive structure. They seem to be shooting for a very decentralized architecture for their network. Nodes can serve different roles in different transactions (data creator and data holder). The respective nodes will be compensated for their service in TRAC tokens. Data Creator nodes would be typically ran by Data Providers, i.e. companies that want to get their data on the protocol. But those companies could also use third party nodes that offer their service. Entities requesting data from the network are called “Data Viewers” and will receive the data from Data Holder nodes.²

Data Holders will be compensated in TRAC to store the data on the network. Their stake will act as a form of deposit to make sure the nodes are incentivized to not cheat and not tamper with the data. Higher amounts of TRAC will be required to fill some roles in the network and for certain transactions, but from the sounds of it, the system will be dynamic. In this regard, the article hints at NEM (with their proof-of-importance model) and swarm as projects that the team did research on to come up with their own POS structure. Swarm notably has a triple-currency-system with a utility token representing network value, a security token and a dollar-pegged value token. I personally have been advocating the use of a dollar-pegged secondary token used on supply chain blockchains and think it is a very smart design. We’ll have to see if those ideas carry over to Origin Trail in some fashion.

From what we know so far, an Origin Trail node will be valued by the amount of TRAC it holds (and they specifically state that smaller stakes of TRAC will be able to fill a role in the network) and the importance/trust/quality of service that a node accumulates and provides. Data providers (mostly the Origin Trail’s customers) will set standards in terms of reputation and stake for the nodes that they want to handle their data.

Origin Trail further use the term elasticity in this key paragraph:

“The elasticity of this system allows both large and smaller token holders to participate on their own terms by being able to “monetize” their reputation and stake if they have a good historical track record in OriginTrail, but without limiting smaller players from entering the system and providing high-quality service. In this way, a data provider can choose to require a certain high level of reputation and stake (which would guarantee a higher degree of trust) from the nodes, which will in return be valued at a higher service price. In this way, the system stays decentralized and the distribution of data remains wide.”

So for anybody trying to figure out how much TRAC you would need for a node, the above leads me to believe that there will be either varying levels of nodes or an even more dynamic system. There might be a minimum amount required like we have seen in NEM’s model, where you need at least 10.000 XEM vested to start filling a role in the network. NEM also have so-called “super nodes” that hold a very high amount of tokens. Or we could see a more self-regulating network that moves to a state where smaller transactions and tasks are executed by smaller nodes while the strongest nodes are rewarded by being the ones selected for the heavy lifting, thus generating suitable rewards.

Final Thoughts

We can’t know how closely Origin Trail will follow the examples that they studied while coming up with their own model, so we will have to wait to get more details straight from the horses mouth. What I can say so far is that this team is doing some serious work and has been delivering on schedule at a very rapid pace. I am liking the fact that they are not copying existing supply chain architectures but are actually innovating. This started with them offering a protocol that is blockchain agnostic and it seems they don’t stop there. Personally I am very curious about what the future has in store for this project and I think you will see a full write up on $TRAC here very soon.

1 https://medium.com/origintrail/origintrail-alpha-node-v0-4a-mechta-release-is-out-ea31f3c4b872

2 https://github.com/OriginTrail/ot-node/wiki/OriginTrail-Incentive-model-v1

***DISCLAIMER***

This is not financial advice, please do not invest more than you can afford to lose.

If you have further questions or want to discuss anything presented in this article, you can find me on twitter @Shillman_Crypto