🤔 What is Zilliqa?

Zilliqa is a layer 1 smart contract blockchain that was first to use sharding to achieve high throughput.

It was developed to overcome Etherium’s limitations(scalability trilemma).

Scalability trilemma was first described by Vitalik Buterin, the co-founder of Ethereum. It states that it is very difficult to develop a blockchain that has all the three features:

Scalability
Security
Decentralization

A developer can choose a maximum of 2 of the desired qualities.

Zilliqa aims to solve the scalability trilemma becoming secure, decentralized and scalable.

💡 Native cryptocurrencies

ZIL

ZIL is the native cryptocurrency of Zilliqa blockchain. It is used for:

Transaction fee: Users pay ZIL tokens as transactions fees to include their transactions on the Zilliqa blockchain
Staking: Zilliqa uses proof of stake consensus mechanism. Validator nodes have to stake ZIL tokens to participate in the process of adding blocks to the blockchain.
Delegation: Users can delegate their tokens with validators to participate in the process of validating blocks in return for a share of validator rewards.
Validator rewards: Validators receive ZIL tokens as rewards for providing their services to keep Zilliqa blockchain running.

gZIL

It is the governance token for the Zilliqa ecosystem. gZIL token holders propose and vote on updates to the Zilliqa protocol. gZIL token holders also control Zilliqa treasury.

📝 Origin of Zilliqa

Zilliqa was created in 2017 and was first made available for sale as an ERC-20 token in January 2018.

Scilla, native programming language for coding dApps on Zilliqa was also released in 2018.

The tokens were later transferred to the Zilliqa mainnet, which was launched in 2019. The token swap concluded in February 2020.

Zilliqa was the brainchild of Prateek Saxena, an award-winning research professor at the National University of Singapore, whose work has spawned browsers, web standards, and app stores.

Along with a number of his students, Saxena published a paper in 2015 that explored how a sharding blockchain could improve network speed and efficiency. These ideas laid the foundation for what would become Zilliqa.

Around this time, Saxena partnered with Max Kantelia, a tech and finance entrepreneur with an engineering background, and Juzar Motiwalla, a venture capitalist with experience in tech startups, to found Anquan Capital.

In 2017, Anquan incorporated Zilliqa Research, which created the Zilliqa network. Building on established links with the National University of Singapore, Zilliqa Research initially brought in Dong Xinshu as CEO, Amrit Kumar as chief scientific officer, and Yaoqi Jia as chief technology officer – all of whom were affiliated with the university’s School of Computing.

👴🏻 Amrit Kumar - Founder

Amrit is a graduate of École Polytechnique and Grenoble Institute of Technology. He also holds a Doctor of Philosophy from Université Grenoble-Alpes.

Amrit started his career in 2011 as an Intern at Michelin. From 2012 to 2013 he worked at French Institute for Research in Computer Science and Automation

In 2016, he served as a Visiting Research Scholar at University of Calgary. Kumar is also a Research fellow at National University of Singapore.

In 2017, Amrit co-founded Zilliqa.

😌 What problems does it solve ?

Proof-of-stake vs Proof-of-work: Zilliqa uses proof-of-stake which has several advantages over proof-of-work:
- It is much more energy-efficient.
- Governments cannot ban miners, unlike proof-of-stake in which governments can trace miners depending on excessive energy usage and seize their hardware.
- It has been observed that proof-of-stake systems get more decentralized over time(Initially Bill Gates had more than 90% of the Microsoft shares, today he has less than 5% Microsoft shares.Whereas proof-of-work systems get more and more centralized over time around hardware, cheap electricity, favorable jurisdictions, etc.
- Proof of work miners are not stakeholders. They can use their existing hardware to mine whichever cryptocurrency is most profitable at the moment.

Forklesss way to upgrade: No hard forks and community splits are involved in upgrading the protocol.

Live now, no future promises: Zilliqa was the first blockchain to successfully implement sharding to achieve high throughput.

No downtime: Thousands of node operators running 24 X 7 ensure the network is always online.

No trusted third party: Users do not have to trust Zilliqa team. The code is open source, anyone can see and verify how the code works.

Zilliqa is a decentralized protocol being run by hundreads of anonymous nodes. Governments cannot regulate and control Zilliqa.

🤖How does it work ?

Types of nodes

The Zilliqa Mainnet is composed of several types of nodes that perform different functions or provide specialized services.

Shard Nodes

Shard nodes are the mining nodes in the Zilliqa Network. They are named as such because they are assigned to one of several clusters (i.e., shards) within the network.

Nodes that belong to the same shard process the same set of transactions assigned to their shard. After processing, the nodes must achieve consensus over the transaction set in order to generate the shard’s microblock.

For their work, shard nodes are rewarded $ZIL at the end of every DS epoch.

Shard membership is determined by the DS committee after shard nodes successfully submit solutions to a Proof-of-Work (PoW) problem, which occurs once every DS epoch.

DS Nodes

DS (Directory Service) nodes are also mining nodes, with the additional responsibilities of

Aggregating shard microblocks to form the Transaction Block.
Creating the DS Block at the start of every DS epoch.

As with the shard nodes, DS nodes are rewarded $ZIL at the end of every DS epoch.

The collection of DS nodes in the network is referred to as the DS committee. Unlike the shards, which are completely revised every DS epoch, the DS committee stays relatively stable across several DS epochs, as only a small fraction of the committee is replaced every DS epoch.

DS committee membership is determined by Proof-of-Work of a higher difficulty. The length of a DS node’s tenure within the committee is also affected by its performance within the duration of the DS epoch.

Lookup Nodes

Lookup nodes are full nodes, i.e., they store all of the blockchain data generated by the DS and shard nodes (including transactions, microblocks, Transaction Blocks, and DS Blocks).

They provide the data to nodes that are syncing with or attempting to join the network. Lookups also dispatch transactions to the shards and DS Committee.

Seed Nodes

Seed nodes are full nodes (like lookup nodes) that do not directly dispatch transactions to the shards and DS committee.

They are used mainly for serving JSON-RPC requests, including creating new transactions. Transactions are regularly bundled by seed nodes and forwarded to lookups for eventual dispatch to the shards and DS committee.

Staked Seed Nodes

Staked seed nodes (SSNs) are a variant of seed nodes. SSNs are run by staking partners and are expected to serve JSON-RPC requests from the community.

In return for the service, these nodes are regularly given staking rewards in the form of $ZILs. Staking rewards are determined based on the performance of the SSN.

Sharding

Zilliqa uses two layers of consensus mechanisms:

Shard layer: Whole blocks of information aren’t processed at the shard level. Shards only process parts of blocks called micro-blocks. Nodes on the shard layer only need to access a small amount of information so they don’t need to communicate with other shards.
DS layer: A small group of randomly-selected nodes forms a group called a DS-committee. The group then combines the macro-blocks into a whole block and reaches an agreement on whether it’s valid or not. These nodes have access to the entire blockchain so they can make a final decision on each block.

Consensus

The Zilliqa network is composed of one DS Committee (a special type of shard), and n normal shards. Each shard has a number of nodes, with one node being a leader and k number of backups.

Broadly, each shard runs an algorithm called practical Byzantine fault tolerance (pBFT) to achieve consensus on the state of the blockchain at any point. A rough outline is as follows:

Pre-prepare: the leader announces the state of the blockchain it has to all backup nodes in the shard as a pre-prepare message.
Prepare: each node receives and validates the state received from the leader in the pre-prepare phase, and multicasts its decision as a prepare message to the rest of the nodes in the shard.
Commit: upon receiving a valid prepare message from a supermajority (2/3) of nodes, it multicasts a commit message to all other nodes. Once a commit message is received from a supermajority, the node records the new state.

🏛️ Governance model

gZIL is the governance token for Zilliqa ecosystem. gZIL token holders propose updates in form of Zilliqa improvement proposal(ZIP) and vote on proposals.

Voting power of holders ios directly proportional to the amount of gZIL tokens.

🤑 How much money does the project have for future development ?

The project raised:
- 43,942.25 ETH in a private sale in Dec 2017.
- 4,947 ETH in public sale in Jan 2018.
The project holds around 12% ZIL tokens to be used to fund future development.

😨 Risks and challenges

Most of the original founders and team has left Zilliqa.

Zilliqa and projects built on it are a direct threat to the current banking, government and legal system. Governments will resist and fight the change

Competition: There are many layer 1 crypto projects that also umplement sharding or are planning to implement sharding to achieve high throughput.

💰 Tokenomics

A total of 21.00 billion ZIL were created, and allocated as follows:

30% was distributed through the public sale.
10% was allocated to Anquan Capital.
12% was allocated to Zilliqa Research.
5.0% was allocated to the Founding Team
3.0% was allocated to various supporting agencies.
40% was reserved for future mining rewards, which will be distributed over a ten year period.