Discover the robust economics of the Casper Network, a Layer-1 Proof-of-Stake blockchain designed for real-world applications. Learn about its consensus mechanisms, runtime execution, and tokenomics that ensure security, scalability, and active participation. Explore how Casper is revolutionizing blockchain technology
What is Casper network?
The Casper Network is a Layer-1 Proof-of-Stake (PoS) blockchain designed for real-world applications, ensuring usability, decentralization, security, and scalability. Casper Labs officially launched its mainnet on March 31, 2021. The protocol is tailored for enterprise adoption, offering flexible privacy permissions, low latency, and robust security. Casper allows enterprises to choose between public, permissioned, and private network iterations based on their confidentiality needs without sacrificing performance. This adaptability has attracted numerous enterprises and Web3 teams to form partnerships with Casper.
Discover more about Casper Network.
Consensus of Casper network?
The consensus layer of the Casper platform operates on the Highway variant of CBC-Casper. This protocol is known for its safety and liveness guarantees. Under the assumptions made in the Highway protocol paper, blocks in the canonical history cannot be reverted, and new blocks continue to be added indefinitely. However, these assumptions require a significant portion of validators to remain online and honest, incentivized to maintain the platform’s security and liveness.
Casper’s consensus is generally considered “one era at a time,” with each era functioning as a separate instance of the protocol.
Agents (consensus layer)
Validators play a crucial role in maintaining platform security by building a continuous chain of finalized blocks, backed by their stakes. Their importance, often referred to as “weight,” is equal to their stake, including both their own and delegated tokens. Delegators are users who enhance platform security by delegating their tokens to validators, adding to their weight and earning a portion of the rewards proportional to their delegation, minus a cut collected by the validator.
Incentives (consensus layer)
The auction determines the composition of the validator set for each era of the protocol. It is a “first-price” (winning bids become stakes) auction with a fixed number of spots chosen to balance security with performance (generally, the platform will run slower with more validators). Because rewards are proportional to the stake, Casper expect this competitive mechanism to provide a powerful impetus for staking as many tokens as possible.
Rewards (per era) are issued to validators who perform, at their nominal pace, in such a way as to make timely progress on block finalization. These rewards are shared with delegators proportionally to their contributions, net of a cut taken by the validator.
Evictions deactivate validators who fail to participate in an era, disabling their bid and suspending their participation until they signal readiness to resume participation by invoking a particular entry point in the auction contract.
Runtime
The runtime layer involves the deployment and execution of smart contracts, session code, and other computational activities on the global state. This suggests potential markets for finite platform resources like computing time and storage. Currently, Casper meters computing time, measured as gas, which represents the relative time use of different Wasm operations and host-side functions. Storage use also incurs a gas cost. Although Casper does not yet have a pricing mechanism for metered gas, an outstanding Casper Enhancement Proposal (CEP #22) suggests implementing a first-price gas auction similar to Ethereum’s. Casper plans to continue developing runtime resource markets, particularly gas futures (CEP #17).
Agents (consensus layer)
Validators are vital in this layer, as they construct and validate new blocks containing deploys that alter the global state. Users execute session and contract code using the platform’s computational resources.
Incentives (consensus layer)
Transaction fees, or gas charges, ensure users compensate validators for computations. Transaction fees are awarded to the block creator. Initially, with FIFO ordering deployments, one unit of gas is priced at one mote until future changes to deploy orders are implemented.
Ecosystem
The ecosystem layer involves designing and operating decentralized applications (dApps). Casper Labs maintains multiple partnerships with prospective dApp developers and dedicates significant resources to researching the economics of potential dApps.
Macroeconomy
Casper’s macroeconomics pertains to activity in cryptocurrency markets, where CSPR is treated as one crypto-asset among many. Unlike “digital gold” tokens like Bitcoin, Casper’s token economics are designed to support actual economic activity on the platform. Tokens are minted on a fixed starting basis, distributed to Genesis validators, employees, and community members, and held for future distributions. The total token supply grows at a fixed annual percentage rate, incentivizing token holders to stake or delegate their tokens and discouraging hoarding for speculative gain.
Conclusion
The Casper Network offers a robust blockchain solution designed for real-world applications. Its PoS architecture ensures security and scalability while incentivizing active participation. With ongoing developments in consensus, runtime, and ecosystem layers, Casper shows promise in revolutionizing blockchain technology.
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