Our Zilliqa Digital Asset Report and Evaluation takes a close look at the sharding protocol in light of its increasingly competitive operational space, and its significant delays in deployment. The scaling project may have lost some of its first-mover advantage, but there is still considerable hope that it may be one of the business models that succeeds with panache in the cryptocurrency arena.
Introduction To Zilliqa
Zilliqa is a high-throughput blockchain protocol that has pioneered the use of sharding technology to boost network transaction speed. The system architecture to host a network that is powerful, stable, and fast enough to process thousands of transactions per second. As a frontrunner in the scalability race, Zilliqa has garnered a significant amount of attention in the space and made solid headway toward delivering a viable product.
Market Opportunity
The high transaction rate targeted by Zilliqa offers a potential gateway for diversifying the use case of DLT, most of which at present remain outside the performance capability of networks like Bitcoin and Ethereum. To leverage blockchain technology in industries like gaming, digital advertising, financial markets and electronic payments, throughput is one of the most critical roadblocks currently standing in the way.
With a potential breakthrough to this roadblock, Zilliqa has managed to establish partnerships with Mindshare and Infoteria to begin exploring application scenarios in the digital advertising and fintech sectors. These sectors are projected to have a combined market value of $272 billion by 2020 in the Asia-Pacific region alone.
While Zilliqa was one of the first serious projects in the scalability race, the project has been joined by many others. When it comes to comparable sharding-based protocols, QuarkChain (QKC) has since entered the game, with other projects like MultiVAC (MTV) aiming to enter the market in the near future.
Then there is the elephant in the room – sharding on Ethereum.
Aside from sharding, a number of other methods to reach equal or higher transaction speeds exist that are employed by other blockchain projects. With this in mind, Zilliqa has taken aim at niche application scenarios through their partnerships to gain a hold on the market. While these partnerships are tantalizing for the future of the project, research on the application of blockchain technology in both the digital advertising and fintech sectors is also quickly gaining momentum.
User Ecosystem Structure
There are two main participants in the Zilliqa network: users and miners. A user is simply an external entity who accesses the network infrastructure to transfer funds or execute a smart contract. Each user has a public/private key pair which functions as a digital signature.
Miners comprise the nodes in the network, who run a PBFT consensus protocol in return for a reward. Each miner has an associated IP address and public key that functions as an identifier for the network. Through sharding, the mining network is divided into smaller networks. To divide the nodes into shards, a group of miners called directory service nodes (DS Nodes) are selected through a PoW puzzle and placed on the Directory Service Committee (DC Committee). Members of the DC Committee change over an unspecified period of blocks, referred to as an epoch.
To spur growth among dApp developers within the blockchain space, Zilliqa has launched the BuildOnZil “ecosystem fund”. However, the outcome so far has largely served to further build out a range of technical components, rather than entice other projects to build on the protocol. Whether or not future rounds of the program succeed in onboarding actual dApp projects will provide an important barometer for measuring developer sentiment toward Zilliqa.
The Zilliqa Token Economy
The Zilliqa economic model is based on a single native network token- ZIL. The token gives users access to the platform, where it is used to pay for transactions and run smart contracts. ZIL is in turn used to reward network nodes. On the network, blocks are validated by multiple miners simultaneously, so that miner income remains more stable in comparison to other chains.
The network has a finite supply of 21 billion tokens, with each block generating new tokens to reward miners. In the whitepaper, it is stated that the team aims for all tokens to enter into circulation over a ten year period; approximately 80% in the first four years and the remaining 20% in the following six.
Zilliqa Core Team
Xinshu Dong (Founder and CEO) began his commercial foray into the blockchain world after establishing Anquan, providing proprietary blockchain and trusted computing solutions for financial markets. Xinshu holds a PhD in Computer Science from the National University of Singapore (NUS)
Yaoqi Jia (Co-founder and CTO) has 5 years of experience at NUS as a Research Fellow where he gained his PhD in Computer Science. His introduction to blockchain in the commercial sector began as R&D intern with Anquan, before moving up the ranks and continuing on with Zilliqa.
Juzar Motiwalla (Co-founder and Chief Strategist) is a venture capitalist in the global technology sector, with a regional focus across Asia and in Silicon Valley. He also has over a decade of experience as Director of smartBridge, a telecom company.
Amrit Kumar (Co-founder and Head of Research) holds a PhD from Université Grenoble-Alpes in Data Analysis. Prior to co-founding Zilliqa, Amrit spent two years at NUS as a Research Fellow.
Prateek Saxena (Co-founder and CSA) is a Research Professor of Computer Science at NUS with an academic focus on blockchain and computer security. Prateek holds a PhD in Computer Science of UC Berkeley and is also a Co-founder of Anquan.
The Zilliqa team includes 27 members in total, including eight Core Developers, two Compiler Developers, one Full Stack Developer and one dApp Developer on the engineering team. Complete information on the team is available here.
Zilliqa Underlying Technology
The core technology pioneered by Zilliqa in the blockchain space is sharding. The use of sharding divides the mining network into smaller consensus groups, or shards, which are capable of processing transactions in parallel. The Zilliqa whitepaper provides an example to illustrate the value add of this design based on a theoretical network consisting of 8000 miners. The miners are divided int…
