SKALE CRASH COURSE

The objective of this course : At the end of this course, readers will be able to understand the following :

1. The SKALE Ecosystem Overview
2. The SKALE Consensus
3. SKALE validators
4. SKALE decentralized storage
5. Elastic sidechain
6. SKALE Token

This course is divided into six modules. Course duration is 30 minutes approximately. Minimum of 5 minutes for each module.

Module 1: SKALE Ecosystem Overview

Module 2: SKALE Consensus

Module 3: SKALE Validators

Module 4: SKALE Decentralized Storage

Module 5: Elastic SideChain

Module 6: SKALE Token

INTRODUCTION :

This course is basically designed for beginners or someone new in blockchain industry who would like to know about SKALE Network in simple terms. Please, have an open mind as you go through this course. You will discover a lot amazing things that will inform and also educate your mind.

BRIEF INTRODUCTION TO BLOCKCHAIN TECHNOLOGY

We can not have a clear understanding of skale Network without first discussing what blockchain technology is all about. So, let's quickly explain blockchain technology before we proceed. Are you ready? I can see how excited you are already. Stay with me.

Blockchain is like a puzzle to so many folks out there, especially newbies who know little or nothing about the new emerging technology.

Before we delve into the nitty-gritty of the lesson, let us briefly look at the historical background of blockchain technology.  Are you ready?

We cannot talk about blockchain without mentioning the year 2008. Although before that year so many researchers have been looking for new and more advanced ways of building businesses and sharing information, assets and even making transactions without third party involvement to no avail. However, after series of work, in 2008 Satoshi Nakamoto published the bitcoin whitepapr. The birth of what we have today as blockchain technology. Amazing!

What the heck is blockchain technology?

Blockchain technology is a decentralized ledger system that offers a high level of transparency, immutability, security and many more. It can also be seen as a distributed ledger that can be used to record transactions seamlessly without third party involvement. Blockchain gets rid of the typical centralized traditional structure and offers a new structure where everything is fair. With this technology, developers can build the next generation of facebook, twitter, amazon, central bank to mention only a few, purely decentralized. No single authority is needed, no government control, no third party interference. Activities can be done solely on peer-to-peer basis transparently without the issue of trust.

What’s the benefit?

Numerous benefits are open and available for the masses. Even people like you with non-technical background can benefit immensely by joining a blockchain network like bitcoin, ethereum, SKALE etc. blockchain technology gives freedom to do whatever you want fairly, it breaks every protocol in the centralized system such as government control, third party, financial institutions (banks) and gives back power to the people. This is fantastic people.

Don’t get too excited yet, we are just getting started. You’re going to discover so many mind-blowing things about blockchain as we continue. Relax!

Five criteria for choosing a blockchain:

• Is it open?
• Is it neutral?
• Is it borderless?
• Is it decentralized?
• Is it censorship-resistant?

Before you choose a blockchain, ensure the above mentioned five (5) requisite factors  are met. However, to better understand blockchain technology, we shall look at various types available below.

Types of blockchain architecture:

Private blockchain:

This type of blockchain does not allow public access. Only the administrator or the ruling set of nodes determines who can join the network. Private blockchain has high efficiency because its centralized in nature.

Public blockchain:

Anyone can participate in the network in a public blockchain simply because of its decentralized nature. The transactions public information is available to everyone. Examples of public blockchain architecture include bitcoin, Ethereum, SKALE etc. it’s also permissioned.

Federated/consortium blockchain:

The last , but not the least. This combines the best features of both private and public blockchain. Its permissionless with high level of efficiency  too.

How blockchain works:

The process of blockchain transaction involves five (5) simples steps:

Step 1: In the first steep, a transaction is requested. The transaction can be either to transfer information or some assets of monetary value.

Step 2: A block is created to represent the transaction. However, the transaction is not validated yet.

Step 3: The block with the transaction is now sent to the network nodes. If it is a public blockchain, it's sent to each node. Each block consists of the data, the previous block hash, and the current block hash.

Step 4: The nodes now start validating according to the consensus method used. In the case of bitcoin, proof-of-work (PoW) is used.

Step 5: After successful validation, the node now receives a reward based on their effort.

Step 6: The transaction is now complete.

For the benefit of this module, we shall stop the lessons on blockchain technology here. Hope you have learnt a lot?

Now the big question is, why Skale Network?

The answer is very simple and clear. Skale Network met the above mentioned criteria for blockchain perfectly well.

MODULE 1: THE SKALE ECOSYSTEM OVERVIEW:

Skale  is basically a decentralized blockchain platform that allows developers to build and deploy Dapps, interact with the network in a very elastic manner seamlessly. Skale Network has interoperability with Ethereum blockchain. This is to further improve in the areas of scalability, security which were lacking or inadequately available previously. Skale Network can also be seen as elastic blockchain network for developers to deploy chain that can also run and interact with Ethereum blockchain. Skale can perform 20,000 TPS per chain and can run full smart contracts, supports decentralized storage, machine learning in EVM etc.

SKALE is built to bring Ethereum to over a  billion masses.  (Mass Adoption).

How? SKALE will do that  by providing a decentralized system in which each Ethereum dApp can run on its own fully Ethereum-integrated blockchain. So furthermore, the current system of having thousands of dApps share a single blockchain is untenable for supporting Web3. That's why SKALE offers each application and website its own blockchain (or they can even go multi-chain, as needed) for its storage, computation and other needs. In this manner, the SKALE Network operates as a decentralized cloud to power Web3. Because as they are now and by their relatively essence, the centralized cloud providers of today can not be able to power the decentralized web in the future. SKALE would be glad to have decentralized Amazon, decentralized Facebook, and decentralized Tiktok on its blockchains in the near future as the ecosystem grows. This is amazing, isn't it?

However, to further understand SKALE, I highly recommend this short explainer video.

Task: After watching the video above, write down what you understood about SKALE in a single sentence and you will be amazed at what you have learnt so far.

Next, we shall take a look at SKALE consensus. Hope you are enjoying the lesson? Let's continue.

MODULE 2: THE SKALE CONSENSUS

Consensus to a large extent determines the security architecture of the network, in the sense that, the more network participants, the stronger and more secure the network becomes. SKALE is very much aware of this fact. That the reason the team has taken a drastic measure to ensure the utilization and full implementation of the best possible algorithm for the network.

Consensus mechanism or algorithm as some people prefer is one important aspect of Blockchain technology. So, any project that intends to leverage the technology must have a consensus mechanism. Before we discuss SKALE consensus, let's first understand what consensus is. It is imperative to note that Blockchain technology can not be complete without consensus mechanism.  In consensus, a project decides whether to design it's ecosystem to allow people to mine or stake coin on the network after full implementation of such network. It's what we known today as "MAINNET LAUNCH" in blockchain. There are different consensus method such as: proof-of-work (Pow), proof-of-stake (Pos), delegated proof-of-stake (Dpos) etc. In building a consensus algorithm, it is important to take into consideration malicious actors within the network who would like to attack the network or influence other participants negatively.

SKALE consensus mechanism  can run over 20,000 TPS in a standalone environment and thousands of TPS in a fully connected Ethereum environment with average blocktimes of 1–2 seconds.

SKALE currently uses a variant of Moustefaoi et.al consensus as it provides a number of highly desirable and necessary properties for a truly decentralized, high-throughput network. This protocol allows for a leaderless, asynchronous, and byzantine fault tolerant network. Leaderless In many existing decentralized/distributed consensus protocols, there is a leader elected for each round to propose some data (“a block”) for the network to run consensus and reach agreement on.The SKALE

consensus protocol instead implements a protocol whereby all virtualized subnodes are able to propose blocks and only those which receive a super majority of signatures (“a threshold”) are eligible to be accepted for potential commitment to the blockchain. Leaderlessnes serves not only to prevent collusion amongst network participants, but also serves to ensure

that all virtualized subnodes participating have a fair chance to propose a block within a chain.

The protocol believes that the network is asynchronous with eventual delivery guarantee, meaning that all virtualized subnodes are assumed to be connected by a reliable communications link - links can be arbitrarily slow, but will ultimately distribute messages.

This asynchronous model is similar to Bitcoin and Ethereum blockchains and reflects the state of contemporary Internet, where temporary network splits are normal, but ultimately resolve. The eventual delivery guarantee is accomplished in practice by the sending virtualized subnode making numerous attempts with exponential backoff to transfer the message to the receiving virtualized subnode until the transfer is successfully carried out.

Every virtualized subnode maintains pending transactions line. The first virtualized subnode to receive a transaction into that line will strive to propagate it to its peers through assigned outgoing message lines for each. To plan a message for delivery to a particular peer, it is placed into the interconnected outgoing line. Each of these outgoing lines is serviced by a different thread, enabling messages to be delivered in parallel so that negligence of a plasticular peer to receive messages will not affect receipt of messages by other peers.

Block proposal:

After the previous consensus round has been completed, each virtualized subnode’s TIP_ID will increment by 1 and immediately cause them to create a block proposal.

To create a block proposal, a virtualized subnode will:

Examine its pending transaction queue.

If the total size of transactions in the pending queue is less than or equal to the MAX_BLOCK_SIZE, the virtualized subnode will fill in a block proposal by taking all transactions from the queue.

In the case that the total size of transactions in the pending queue is more than MAX_BLOCK_SIZE, the virtualized subnode will fill in a block proposal of MAX_BLOCK_SIZE by taking pending transactions from queue in order of oldest to newest obtained.

The virtualized subnode will assemble block proposals with transactions which are ordered by SHA-256 Merkle root from smallest value to largest value.

In a situation where  the pending queue is empty and has nothing to show, the virtualized subnode will wait for BEACON_TIME, and then, if the queue is still empty, make an empty block proposal comprising no transactions.

Once a virtualized subnode creates a block proposal it will transmit it to other virtualized subnodes using the data availability protocol defined below. The data availability protocol ensures that the message is transmitted to the supermajority of virtualized subnodes.

The five-step protocol is clearly explained below:

The sending virtualized subnode A sends both the block proposal and the hashes of the transactions which formulate the program P to all of its peers.

Upon acknowledgment, each peer will reconstruct P from hashes by corresponding hashes to transactions in its pending queue.

For transactions not found in the pending queue, the peer will now have to send a request to the sending virtualized subnode A. The sending virtualized subnode A will then send the bodies of these transactions to the receiving virtualized subnode, allowing for the peer to reconstruct the block proposal and add the proposal to its proposal repository database PD.

The peer then sends a receipt  back to A that comprises a threshold signature share for P.

A will wait until it receives signature shares from a supermajority (>⅔) of virtualized subnodes (including itself) A will then create a supermajority signature S. This signature serves as a receipt that a supermajority of virtualized subnodes are in custody of P.

A will then announce this supermajority signature S to each of the other virtualized subnodes in the network seamlessly.

Consensus is a part of blockchain that sounds a little bit technical. So, for the benefit of this course, we shall end this module here. You know, I promised to keep it simple for beginners to comprehend.

To further understand SKALE consensus, please delve deep into consensus

Thanks for completing this module. As always, please, write down few lessons you have learnt during this module, just in two sentences.

Next lesson will blow your mind as we delve deep into SKALE validators.

MODULE 3: SKALE VALIDATORS

It won't be proper to start this module without a clear understanding of who a validator is and the role they perform in a blockchain network. Validators are basically network participants who validate transactions and also ensure smooth running of the entire network. Now, let's relate validators to SKALE Network. Open your mind.

SKALE Network Validator Nodes

Blockchain mining and chain validation are not without risk so miners and validators need to pick the right networks to join. SKALE is a Proof of Stake (POS) network that utilizes a work token. The developed containerization and virtualization of nodes make process seamless and the SKALE Protocol optimizes the allotment of resources of each node across the entire network of elastic blockchains. This protocol is also mining pool resistant – which implies that there is no benefit to be achieved by combining resources at the level of mining.

As Validators perform their tasks effectively and economically too, they receive some rewards which  are distributed on a near-even basis across the network of nodes – This rewards are based on meeting performance targets. A validator must achieve set target to be eligible for the set rewards. Every node is ranked based on its SLA behavior for the chains the node is validating with node accomplishment being assessed by the other nodes in the same network.

If one is a SKALE Validator, he/she is certain to receive payment on a monthly basis only if they meet the performance and uptime criteria. Payouts include tokens paid in the form of sidechain subscription fees and token inflation as stipulated through a smart contract running on the Ethereum mainnet. Would you like to become a SKALE validator? Relax, let's finish the lesson first, as you will discover more amazing things.

The SKALE Network consists of a large set of nodes. And all the nodes are running together on their own, validating transactions within the elastic sidechains they are supervising. These nodes all make use of a distinct set of SKALE contracts that run on the Ethereum mainnet. These smart contracts are where the SKALE token lives, where issuance occurs, and where rewards get disbursed to the node validators.

In the SKALE Network, there is no minimum bonding requirement for a validator. Validators in the network can self delegate or accept delegation from other token holders.

There is a Minimum Staking Requirement (MSR) to register a node in the network. The amount will be publicly announced leading up to the MainNet Launch for the public to be aware, especially interested candidates.

Is there a duration for operating as a validator one may ask? I know that question is currently running in your mind right now as you read this.

Yes. Validators can decide to validate the network for 3 months, 6 months, or 12 months. The minimum lock-up period is 3months. Validators can choose to self-delegate (i.e. put up the entire staking amount themselves) or appoint to accept any delegation and have the alternative to give a commission rate to the delegators. Of course staking for the longer durations will have a slight multiplier applied to the monthly payouts from the bounty pool.

How are validators measured and rewarded?

There is performance metrics for each subnode which are collected by a subset of the other subnodes in the network. Metrics for the prevailing behavior of the node itself are collected by 24 independent peer nodes. Integrating these metrics yields an overall score which will define whether or not a node is able to partake in a monthly bounty award.

As we discuss this very important topic, please, note that validators can not function well without the network's support.

Absolutely, validators can raise stakes from delegators and have this reflected via contracts running on the network. Commissions can be set for the monthly bounties such that payouts can be split into both commissions (to the validator) and delegator awards (to investors). The commission rate that is set is entirely at the choice of validators and on what the market will bear.

There is no minimum delegation requirement for a validator. Validators can choose to self-delegate or select to bring on delegators, in which case, validators can set minimum delegation amount for accepting delegations

How are validators regulated?

The node core in a validator within the SKALE Network has a primary role in moderating the network – a role that is in addition to self-organizing around the validation and operation of sidechains and subchains.  Each node in the network is continuously regulating a random set of 24 nodes, collecting data and pulling log files from these nodes. The node core will also score every node, taking into account the uptime, latency, performance and other metrics and then basing the score on whether specific thresholds are met or not.

Amazing!

I trust you now understand SKALE validator, great. However, if you still need more information you can always check validator

We definitely can't end this module without taking this short task.

1. Who is a SKALE Validator and what specific role does a validator perform on the network?
2. Is there any reward for being a SKALE Validator? If yes, when is the reward distributed?

Next, we shall take a look at SKALE decentralized storage. Are you excited?

MODULE 4: SKALE DECENTRALIZED STORAGE

At the end of this lesson, you will understand SKALE decentralized storage. However, before we proceed, let's explain "Decentralized & Storage" from a blockchain perspective when you hear the word decentralized just know we're talking about any transaction that could be done without third party involvement, no central authority interference. Or any activity done on peer-to-peer basis. Storage on the other hand, could be seen as a process of saving, securing and keeping any valuable information or asset for future use or reference. For storage to take place there must be a device (storage device).

Note: Storage on Ethereum is relatively expensive. Hence the need for SKALE storage.

According to SKALE whitepaper, Elastic Sidechains are each comprised of ‘virtualized subnodes’ which run on ‘nodes’ in the network. Virtualized subnodes are compartments of these nodes (run by validators) in the network and partake in the network on an Elastic Sidechain basis. In this manner,, each validator is able to run numerous Elastic Sidechains with their node, at the same time. With this partitioning of node resources into virtualized subnodes and random nomination of these virtualized subnodes to Elastic Sidechains, there won't be any sort  of collusion amongst nodes  throughout the network.

Decentralized storage is very difficult, do you know why? The second layer scaling solutions, the common thread amongst them is the outsourcing of computation and storage off-chain; this is true for things like Plasma, as well as Elastic Sidechains. And with each solution’s unique method, there come tradeoffs - with each being prone to the ‘Data Availability challenge’.

Because a lot of coding, backup and many more are required, data availability is one of the most difficult things to deal with when it comes to storage. Given the modularity of these solutions. Generally, users should be skeptical of leveraging a centralized system for this (as it would be antithetical to idea of decentralized storage).

One of the main differentiators for Elastic Sidechains is the fact that they come with a built-in data availability protocol (users can still integrate their own, as well) to ensure that data is stored on at least ⅔ of virtualized subnodes in each Elastic Sidechain.  And because of this protocol, the SKALE team has been able to create and ship a FileStorage system which runs on SKALE and a modified EVM to provide this feature to existing Ethereum developers too.

SKALE Network makes it more easier, simple and affordable for decentralized storage.

FileStorage.js is a simple npm package that allows users to integrate SKALE FileStorage into their decentralized applications with just a few lines of code.

Note: this module was written for beginners. So, if you're a dev and would like to dive deep into the code, I highly recommend skale

But, as you go through the process, have it at the back of your mind that SKALE decentralized storage is for everyone both dev and non-dev alike.

For a full guide on how to practically utilize the platform for decentralized storage don't hesitate to follow decentralized storage

I can't believe you have gone this far with me. Congratulations on the successful completion of this module. As usual, make sure you write down a few things you have learned, and if I may ask, "What do you understand by SKALE decentralized Storage? Do you think it's affordable and recommendable?

I can't believe you have gone this far with me. Congratulations for a successful completion of this module. As usual, make sure you write down few things you have learnt, and if I may ask, "What do you understand by SKALE decentralized Storage? Do you think it's affordable and recommendable?

Let's take a quick break as we watch this short video

Moving on, we shall take a look at Elastic Sidechain. How elastic is the chain, curious?

MODULE 5: SKALE ELASTIC SIDECHAIN

It is necessary to explain sidechain before talking about elastic sidechain. What then is sidechain?

Sidechains are independent blockchains that can  work in a complementary manner with another blockchain to deliver enhanced functionality and lower costs. This functionality can comprise but is not limited to transactions, smart contract execution, and storage. Sidechains add value by acting as a lower cost and higher throughput augmentation to slower, more expensive, but generally more secure Layer 1 chains. There is a primary chain which they support known as the security layer and it functions as the foundational store of value and equally place of settlement.

Having understood sidechain, let's consider elastic side chain, shall we?

Elastic Sidechain

SKALE has introduced a new classification within the Execution Layer called 'Elastic Sidechains'. Elastic Sidechains deliver all of the benefits of conventional sidechains together with the security guarantees of truly decentralized networks. So, how do Elastic Sidechains address the concerns associated with conventional sidechains?

When developing a sidechain, the validators which contribute in the network are unsystematically appointed (in the SKALE Network via the SKALE Manager on Ethereum) from a forthcoming validator pool. This future validator pool is constituted of the several nodes in the network that have availability to partake in extra sidechains.

Because elastic sidechain offers users the best of sidechains and decentralization, it is appropriate for dApps that require decentralization, quick finality, and cost-effective smart contract execution. The best use cases include those  with tiny transaction amounts and a prerequisite to run a great volume of smart contracts.

It has been proven over time that low volume and high monetary value on the chain are never good. However, higher-value transfers on the elastic sidechain is always anticipated.

And Elastic Sidechains scale with your business! In the same way startups leverage EC2 where they start little and expand, decentralized applications can start small and grow their deployment along with their needs.

Hopefully this module provides some insight about Elastic Sidechain. For other type of scaling and more in-depth illustration of elastic sidechain, kindly go to sidechain.

That will bring us to the end of our lesson on elastic sidechain.

Task: What do you understand by elastic sidechain?

It's so wonderful how far we have gone in this course. We shall now look at the last module (SKALE Token).

MODULE 6: SKALE TOKEN

In this module, we shall understand what cryptocurrency is, tokens and SKALE Tokens.

What is cryptocurrency?

Simply put, cryptocurrency is digital money that could be used for electronic transaction in a decentralized and peer-to-peer manner without third party interference. It’s the most secure, reliable, fast and affordable system for cross border payment.

Characteristics of cryptocurrency:

- Its digital money

- Its inflation secure

- The value is set by demand and supply (utility)

- It enables a brand new financial industry

- It enables faster, affordable, reliable and more secure transactions

Tokens:

The third most common type of cryptocurrency is the token. Many newbie usually use the terms token and coin interchangeably. However, a clear disparity still exists. A token cannot function independently, rather its based on already existing blockchain. Token does not have its own distributed ledger. According to coinmarketcap, there are over 1,613 tokens currently listed. Chainlink (LINK), Huobi Token (TK), USD Coin (USDC), Basic Attention Token (BAT) are few of the tokens based on Ethereum platform (ERC20 standard).

SKALE Token according to the official whitepaper is a hybrid use token which represents the right to work in the network as validator, stake as a delegator, or access a share of it's resources by deploying and renting an elastic sidechain for a period of time as a developer.

For instance, if you're a user of SKALE Network, you will have to pay SKALE in a subscription-model to rent these resources (computation,storage, bandwidth) for a predetermined amount of time in the form of an Elastic Sidechain.

Validators stake SKALE into the network and then gain the right to run nodes and earn both fees and tokens via inflation. Delegators may delegate their tokens to validators and earn rewards.

TOKEN METRICS:

Token type: ERC777

Total supply at Genesis : 4,140,000,000 SKL

Maximum supply: 7,000,000,000 SKL

More on SKALE Token can be found whitepaper.

On that note, we have come to the end of this session. I'm super excited, hope you feel the same way too?

Task:

1. What is SKALE Token and what are the uses on the network?

SUMMARY:

Blockchain technology is still new and emerging. Bitcoin opened the phase followed by Ethereum and now SKALE. As the industry grows, we hope to see more amazing innovative ideas in the near future. Experts have said that we are just beginning to experience a paradigm shift to decentralized finance (DeFi) from the previous traditional system. And I would like to add, new decentralized applications in the form of multinationals will also emerge as smart people leverage blockchain ecosystem to provide real world solutions to myriad of challenges in divers sectors across health, finance, human resources, supply chain etc.

SKALE is one big project to watch in the space as the team is working tirelessly to revolutionalize the entire blockchain ecosystem with great interoperability with Ethereum.

SKALE Networks's modular protocol is one of the first of its type to allow developers to effortlessly provision highly configurable blockchains, which deliver the advantages of decentralization without jeopardizing on computation, storage, or security seamlessly.

Before we conclude this course, let's quickly recap all that has been covered in just some few minutes.

We covered six (6) modules:

Module 1: Overview of SKALE:  where we discussed holistically in simple terms SKALE Network as elastic blockchain for decentralized applications which has great interoperability with Ethereum.

Module 2: Consensus: If you followed this lesson with open mind you must have learnt a lot about consensus mechanism in blockchain technology with special emphasis on SKALE. We explained that blockchain can not be complete without consensus and we have different methods like proof-of-work (Pow), proof-of-stake (Pos), Delegated proof-of-stake (Dpos) etc.

Module 3: SKALE validators: we were meant to understand that those who participate in the smooth running of the network, validate transactions are known as validators and they are rewarded for their efforts based on performance.

Module 4: SKALE decentralized storage: As we have seen, storage is difficult and relatively expensive eg: on Ethereum and other platforms. So, SKALE proposes to bring solution to the challenges in decentralized storage.

Module 5: Elastic Sidechain:  we looked at a sidechain as an independent blockchain that can work in a complementary manner with another blockchain to deliver enhanced functionality and lower costs. This functionality can comprise but is not limited to transactions, smart contract execution, and storage.

Then,

Module 6: SKALE Token: in this module, we were able to explain cryptocurrency and token. Cryptocurrency is a digital money that can be used on peer-to-peer basis eg: bitcoin, ETH etc. Token is a type of digital asset. While blockchain projects that has their own network use cryptocurrency, token is used by projects that doesn't have any blockchain network yet.

At this juncture, I want to sincerely appreciate you for taking this short SKALE Crash Course.

To learn more; if you are interested in trying out SKALE, please kindly join the discord community.

Website: SKALE Network

Thank you.