It has been about 1 month since block.one released EOSIO Dawn 3.0. This past month our team has been focused on cleanup and stability of the EOSIO software. A big part of this work was moving toward a proof of concept for inter-blockchain communication.

Excluding merges, 43 authors have pushed 818 commits to github. This puts EOSIO in the top 8 most active c++ projects on github in the past month. As you can see a lot is happening.

Now is now Now New Market-Based RAM Allocation Model Rise of Inter-Blockchain-Communication Upgrade DPOS Last Irreversible Block Algorithm Name Squatting Header-only Validation Light Weight Producer Schedule Change Proofs Refined Producer Pay Model Producer Vote Decay Exchange Integration Support

Now is now Now

One of the biggest changes in EOSIO Dawn 4.0 is that we have changed the definition of the current time from “time of head block” to “time of current block”. This change resolves a lot of corner-cases with time-based operations in the presence of missed blocks and enables much more accurate measuring of elapsed-time within smart contracts.

RAM Allocation Model

In our testing we determined that how the EOSIO System Contract was allocating RAM (database space) to those who staked tokens would lead to shortages down the road. We switched to a market-based allocation approach using the Bancor algorithm.

Our math indicates that if 1TB of RAM was allocated on a pro-rata basis to token holders then the cost-per-byte would be $0.018 (assuming $20/token). The reality is that most token-holders don’t actually have an active need to use the RAM they might be entitled to; therefore, we are initially pricing RAM at $0.000018 per byte (assuming $20/token). New accounts require about 4KB of RAM which means they will cost about $0.10. As RAM is reserved the price will automatically increase so that the price approaches infinity before the system runs out of RAM.

Under the Dawn 3.0 system contract, you could only sell RAM for the price you paid. The goal was to disincentivize hoarding and speculation. The downside to this approach is that those who buy RAM cheaply have no financial incentive to free RAM for other users after it gets more congested. Under Dawn 4.0 the system contract now buys and sells RAM allocations at prevailing market prices. This may result in traders buying RAM today in anticipation of potential shortages tomorrow. Overall this will result in the market balancing the supply and demand for RAM over time.

Over time Moore’s law will allow block producers to upgrade to 4TB or even 16TB of RAM and this increase in supply will trickle into the the EOSIO RAM market lowering prices.

Implications for Smart Contract Developers

As a smart contract developer, RAM is a precious resource which is consumed by the database records you store. Due to the cost of RAM it will be important to minimize the amount of data that you store in the in-memory database and design your applications with the ability to free RAM after your users are done. For example, Steem only stores 1 weeks worth of content in RAM so that the total size doesn’t grow much over time.

Minimizing Speculation

Now that there is a RAM market, speculators may want to trade RAM price-volatility for profit. The EOSIO system contract makes RAM non-transferrable and charges a 1% fee on trades. The result of this fee is to offset the natural inflation of tokens by taking them out of the market. If annual trading volume of RAM equals the token supply then 100% of all block producer rewards will be covered by the RAM market fees.

The Rise of Inter Blockchain Communication

High performance blockchains need all data in RAM because the time to access disk will quickly drop transaction throughput to just a couple hundred transactions per second. In order to scale RAM usage we need multiple chains with independent memory regions running on independent hardware.

EOSIO block producers can operate many different chains that all use the same token for buying RAM and staking bandwidth. The producer elections will happen on the main chain and all related side-chains will be operated by the same set of producers. Each chain can have its own 1 TB+ of RAM and decentralized applications can send messages between chains with just a couple seconds of latency.

The price of RAM will be different on all chains which will inform DAPP developers where it is cheapest to operate.

Roadmap for Parallelism

Inter Blockchain Communication (IBC) involves both chains validating merkle proofs that are 1KB+ in size and involve dozens of cryptographic hash functions and/or 15+ signature verifications. In other words, the cost of validating a message from another chain is about 15x to 30x higher than the cost of validating normal transactions.

Fortunately, validating these proofs is trivial to parallelize as they do not depend upon blockchain state. A blockchain that only processed messages from other chains could easily consume 30 CPU cores while only sustaining a couple thousand transactions per second.

It is our belief that scaling via Inter Blockchain Communication will give almost unlimited scaling potential. This approach scales RAM, network, and CPU at the same time. Considering that signature verification, context-free-action validation and IBC proofs will already saturate most CPUs with high-single-threaded throughput, optimizing for multi-threaded WASM execution will likely be bottlenecked by other resource constraints.

Under EOSIO Dawn 3.0 we made a lot of design decisions around the potential for future multi-threaded WASM execution. Unfortunately, until you actually implement a full multi-threaded implementation it is impossible to know whether we have all the corner cases covered. This means that EOSIO Dawn 3.0 had a lot of architecture complexity that was not giving any immediate benefit.

We now believe that the path of upgrading from single-threaded to multi-threaded execution is to launch a new chain with multi-threaded support run by the same block producers and staking the same native tokens. This gives the new chain complete freedom to make design tweaks as necessary to support multi-threaded operation without risking an in-place upgrade to a live chain.

With this roadmap to parallelism we can simplify EOSIO 1.0 and optimize it for maximum single-threaded performance and ease-of-development. We anticipate that the single-threaded version of EOSIO may one day achieve 5,000–10,000 TPS. We also anticipate that many applications will prefer the many-chain approach to scaling as it will lower overall costs and scale faster.

Upgrade DPOS Last Irreversible Block Algorithm

Those of you who have followed consensus algorithm debates may have heard that DPOS with the last irreversible block (LIB) algorithm (as it exists in Steem & BitShares) has the potential to fall out of consensus in certain extreme network connectivity disruptions. In the past I have dismissed this potential failure mode due to its purely theoretical nature and the relatively minimal costs and downtime. The LIB algorithm was just a metric, like the 6-block rule for Bitcoin. Pure DPOS always relied on longest-chain rule which will always reach eventual consensus. The LIB algorithm was a short-cut designed to optimize undo-history and give a confidence measure to exchanges.

EOSIO’s IBC algorithm depends upon the DPOS LIB in order to be certain of finality. The costs associated with a LIB failure and the difficulty in fixing it are much higher once you introduce IBC. Our team, specifically Bart and Arhag, have come up with an elegant improvement to the LIB algorithm which guarantees that it is impossible for two nodes to reach a different LIB without more than ⅓ of them being byzantine. Furthermore, it is possible to detect byzantine behavior of a single peer. Read more about it here.

It is the lack of finality of Bitcoin and Ethereum blocks that make inter blockchain communication with legacy chains difficult and/or very high latency. The new tweak to DPOS brings it up to a new level of byzantine fault-tolerant finality and robust in all network environments.

Name Squatting

Some users have expressed concern over the 12 character name limit imposed on EOSIO accounts. These 12 character names are derived from base-32 encoding of a 64 bit integer. The 64 bit integer is the native machine word size and is therefore very efficient. Within a transaction we refer to account names many times, (code, scope, permissions, etc), and our database indexes are also based around these 64 bit integers. Increasing the length of an account name would have far-reaching impact on performance and architecture.

That said, our vision for blockchains is to separate the concept of accounts from identity and to establish a dynamic on-chain mapping between account names and more readable display names.

It is best to view account names as license plates where users can pick vanity plates that are easier to remember. That said, the vast majority of people should be able to find an attractive 12-character (or less) name.

Due to the potential high-value of certain names, we believe that the EOSIO system should offer a dynamic pricing model for account names. Furthermore, the ability to namespace accounts such as *.com can provide an extra layer of security for users and/or groups.

Due to the limited development time between now and the release of version 1.0 of the EOSIO software, we are going to recommend that all account names be forced to 12 characters and not contain any ‘.’ characters. The community can then upgrade the system contract (without hard fork) once a viable pricing and anti-name-squatting policy is identified. We will likely provide a model similar to BitShares where account names are priced by length and character content.

Header-Only Validation

On Steem, BitShares, and EOS Dawn 3.0 and earlier it was not possible to validate a block-header without applying the full block. With EOS Dawn 4.0 we now support header-only validation. This feature is the basis of light clients and IBC and also prevents a range of attack vectors while allowing blocks to propagate across the network without waiting for each node to do full verification.

The simplest form of IBC for high-frequency communication involves light clients processing all headers and then users providing simple merkle-proofs of actions relative to a known block.

Refactored Block Building & Applying Architecture

We spent significant time cleaning up the process by which blocks are built and applied. Under the new model a block is created with the same sequence of API calls that are used to apply the block. This ensures the same code-paths are followed and minimizes the potential for inconsistencies between what a producer thinks is valid and what a validator thinks is valid. This cleanup makes the process of applying the block as little more than a script that replays what the producer did.

Lightweight Producer Schedule Change Proofs

As we were implementing the IBC proof-of-concept we realized that Dawn 3.0 had a few edge cases where simple signature proofs were impossible. We wanted to make light-weight sparse-header validation as simple as possible which necessitated a refactor of how blocks are signed.

With EOSIO Dawn 4.0 it is now possible to validate changes to the producer schedules without having to validate any block headers. When a producer signs a block they also sign the new schedule such that it is impossible for there to be two-competing and validly signed Producer Schedules without ⅔+ of producers colluding or ⅓+ colluding with a very bad network split.

New Producer Pay Paradigm

There has been a lot of community discussion around producer pay and how to allocate the maximum of 5% inflation. The reference system contract that block.one will provide with EOSIO 1.0 will allocate inflation like so:

There are 21 active block producers and any number of standby producers. The top 21 divide up the 0.25% per-block rewards proportional to the number of blocks each one producers. All block producer candidates (including the top 21) also divide up the .75% per-vote rewards budget proportional to the total number of votes they receive. They can claim their share of the per-vote rewards at most once-per-day. In order to claim their share they must qualify for at least 100 tokens/day. Producers candidates who do not qualify for at least 100 tokens/day on a per-vote basis will receive nothing.

The idea behind this algorithm is to ensure all candidate producers have sufficient pay to provide full-node services to the community and to ensure no one is in the position of receiving money that is insufficient to cover their costs. Assuming the top 200 producer candidates all received the same number of votes this would support 21 active producers and 179 stand-by producers. In reality some producers will have significantly more votes than others which may reduce the number of paid-standby producers.

It is critical to have a minimum per-day payment so that wealthy individuals who have no intention of producing blocks don’t attempt to earn interest on their producer candidate by voting on themselves.

Producer Vote Decay

Much of the work we are doing since Dawn 3.0 involves tweaking the system contract. One of those tweaks is the implementation of vote decay. In order to maintain maximum voting influence each voter will have to re-assert their vote every week. Voting influence decays with a half-life of 1 year for those who do not keep their votes up to date.

We recommend that the constitution contain language forbidding the use of automated voting bots as the purpose of vote-decay was to ensure that voters re-evaluate their decisions rather than “set-it and forget it”. While it is not possible to prove the use of bots, it will be possible to prove that people do not use smart contracts to auto-vote.

Exchange Integration Support

As we approach the EOSIO 1.0 release, many people are asking us for information about how exchanges will monitor an EOSIO blockchain for incoming deposits and/or validate that their out-going withdraws are accepted and irreversibly confirmed. We have created a tutorial on using cleos (our command line eosio interface) to monitor the chain for incoming deposits. We have also created a demonstration python script that monitors deposits and withdraws. With this tutorial and example script exchanges should have everything they need to begin integration with EOSIO based blockchains.

Availability of EOSIO Dawn 4.0

Development of EOSIO Dawn 4.0 code is ongoing in the ‘slim’ branch on github. We will be polishing it up and officially releasing it May 11, 2018. At that time we will move slim to master and tag a release. Developers who want to remain on the cutting edge can follow our progress on the slim branch.

Conclusion

EOSIO software is making massive strides toward a robust 1.0 release this June. With Dawn 4.0 the code has been cleaned up significantly and we are more confident than ever.

Disclaimer: block.one is a software company and is producing the EOS.IO software as free, open source software. This software may, among other things, enable those who deploy it to launch a blockchain or decentralized applications with various features. For more information, please visit https://github.com/eosio. block.one does not provide financial support to anyone seeking to become a block producer on any version of the EOS.IO platform that may be adopted or implemented.

block.one will not be launching a public blockchain based on the EOS.IO software. It will be the sole responsibility of third parties, the community and/or those who wish to become block producers to adopt and implement EOS.IO in the manner they choose, with the features they choose and/or providing the services as they choose. block.one does not guarantee that anyone will adopt or implement such features or provide such services or that the EOS.IO software will be adopted and implemented in any way.

Please note that this document is an expression of block.one’s vision, not a guarantee of anything. While we will try to make that vision come true, all aspects of it are subject to change in all respects in block.one’s sole discretion. We call this “forward looking statements”, which includes all statements in this document, other than statements of historical facts, such as statements regarding block.one’s business strategy, plans, prospects, developments and objectives. These statements are only predictions and reflect block.one’s current beliefs and expectations with respect to future events and are based on assumptions and are subject to risk, uncertainties and change at any time. We operate in a rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you are cautioned not to rely on these forward-looking statements. Actual results, performance or events may differ materially from those contained in the forward-looking statements. Some of the factors that could cause actual results, performance or events to differ materially from the forward-looking statements include, without limitation: market volatility; continued availability of capital, financing and personnel; product acceptance; the commercial success of any new products or technologies; competition; government regulation and laws; and general economic, market or business conditions. Any forward-looking statement made by block.one speaks only as of the date on which it is made and block.one is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise.

The statements herein do not constitute technology, financial, investment, legal or other advice, nor do they apply to any particular situation or implementation. Please consult with experts in appropriate areas before implementing or utilizing anything contained in this document.

The ideas and information expressed herein are solely those of the author and do not necessarily reflect the positions, views or advice of block.one or any other employee of block.one.