This article would serve as a handbook or let's just call it a crash course to crypto beginners wanting to know more about the SKALE network.
In this article, the following would be covered:
1. Overview of the SKALE network
2. What SKALE's Network entails and the following would be discussed also:
a. Roadmap of the SKALE network
b. Graphical representation of the SKALE network team and contributors.
3. Elements of the SKALE network and the following elements would be discussed in full details:
a. SKALE Nodes
b. SKALE Manager
4. The SKALE Network Token (SKL)
5. A step-by-step guide on how to stake the SKALE network token (SKL)
6. The SKALE Network Foundation
The blockchain and cryptocurrency ecosystem has grown into being the most decentralized network transforming a lot of products into a trust-less and transparent protocol. It possesses quite a lot of effective features like security, scalability, interoperability, reliability, and other beneficial features.
The blockchain industry is experiencing major bottlenecks which have led most of the decentralized applications also called dApps deployed on a network face vulnerable attacks that have to stand as a barrier to attain full decentralization leading to many scaling problems.
The SKALE Network got launched on the 1st of January, 2018 by Co-founders Stan Kladko and Jack O’Holleran. Stan Kladko and Jack O’Holleran had an idea of building a decentralized application but as they were building this application, they both stormed on some scaling and user experience problems which has stood as a hindrance to the growth of dApps. The issue of the problem was slated down and they got to notice that most existing blockchains on the cryptocurrency network were facing these bottlenecks and really needed the scaling solution in order to have an enhanced growth in the market. Stan Kladko and Jack O’Holleran came up with the idea of building a scaling solution using the SKALE architecture. The SKALE architecture and mechanics aim at providing a better scaling solution to different kind of decentralized application on the blockchain network, this scaling solution would overcome a lot of scaling problems and would create a new high throughput layer which would function the same way as the Ethereum network, just that in the case of the SKALE network, it would offer a zero or less transaction fee and higher transaction speed making it known as the best Layer-2 Network solution.
On the day of the SKALE network launch, The SKALE network received huge support and seed backing from some venture capital firms like Signia Ventures and Floodgate, Winkelvoss Ventures, Multicoin Capital, and HashKey.
After the birth of SKALE, development, and testing of the network was done for about two and half years which brought about the announcement of its mainnet plan where the public token sale of the SKALE network token (SKL) was hosted by the ConsenSys CodeFi’s Activate platform. The SKALE project is known to be the first Layer - 2 Network that used the ConsenSys CodeFi’s Activate framework for its utility token.
You might be wondering why is the SKALE network using the ConsenSys CodeFi’s Activate framework for its tokens but here is the reason, they used the framework so as to enable users of the network purchase or stake the SKALE network token (SKL) to actively proof its use and after these tokens are being staked, with its Proof of Stake (PoS), SKL holders are allowed to redeem or transfer their token to either a cold or hot wallet.
The SKALE Network has provided the cryptocurrency ecosystem, an elastic blockchain network where dApps developers can get their decentralized applications (dApps) deployed in a secure and more scalable way. SKALE network having seen all the problems faced in deployment of dApps and scaling problems that affect full decentralization provided better measures to resolve technical scalability, user experience, and cost issues in a decentralized network. SKALE Network provides dApps developers an opportunity to deploy run dApps in a decentralized modular cloud built for real-world needs resulting in an enhanced configurability and modularity.
WHAT IS THE SKALE NETWORK?
SKALE network can be seen as that decentralized network that can be used to build very powerful decentralized applications and also provide a well secure and scalable network built interoperable to operate effectively with the Ethereum blockchain. It is operated by a group of selected sub-nodes that are run on all or each node’s computation and storage resources which offer thousands of transactions per second with zero or fewer gas fees. This configurability gives consumers a conduit in choosing their virtual machine, consensus protocols, chain size, and other security measures.
Let’s just imagine the SKALE network has a dynamic shard, it volunteers itself to complete all token transfers and also manages the execution of all smart contracts on its network, the more the smart contract on the network, the more it does it separately one after the other. It making sure that token transfers are completed and smart contracts are executed independently would make sure the dApp attain higher scalability even at a high usage of another application on the network.
Look in the case of the decentralized finance (defi) Farming, high transaction or network fees are the ones getting hold of profits that are being made on the network, this high network fee doesn’t look encouraging to everyone. The SKALE network has adopted a good technology that would enable developers to run their dApps with higher performance with lower costs.
The SKALE node is just like a portion where the existing Ethereum node carries the SKALE infrastructure, it runs an Ethereum Virtual Machine (EVM) on each of its nodes which will in turn not function without the mainnet that is the SKALE manager. The SKALE nodes are
As consumers gain access in choosing their designed chain configuration, they also have exclusive access in the rentals of network resources which would also run on the chain. If rentals of network resources are much, the nodes who meet the requirements are randomly selected and assigned to serve as a sub-node. Since one of the reasons why SKALE was designed was to curb out cost issues, the Ethereum Virtual Machine (EVM) Compatibility either through Proof of Work (PoW), Proof of Authority (PoA) and Proof of Stake (PoS) within the sidechains also gives consumers the access to deploy existing Ethereum based smart contracts which were before impossible to run due to high cost or increased transaction fee also called gas limit.
The SKALE Network has provided means in expanding its scale production for both small and large scale.
Many dApps have been deployed on various networks but the thing about these deployed dApps is that they are mostly affected due to lack of scalability and mass adoption. The blockchain industry is experiencing scaling even when blockchain has made it possible for data to be stored seamlessly and highly configurable to users. Scaling has been a networking problem that has led to the slow transaction between nodes making it one of the bottlenecks dApps developers and users on the network face.
The SKALE Network has been built interoperable to operate effectively with the Ethereum Blockchain, making it a Layer-2 solution that allows dApps to enjoy high transaction throughput, faster transaction finalization at a reduced transaction cost.
Most network collects voluminous transaction fee from developers whenever they want to deploy or rent a chain. SKALE Network has come also as a gas cost-saver in curbing part of the scaling problems, this will allow developers to deploy and rent a network chain based on the subscription model on the SKALE network.
Another area most blockchain networks fail to gain effective perform well is in the aspect of infrastructure, dApps lack the security and privacy of data stored on a network. We all know how data is not to be joked or tampered with, it’s one that should be taken with care and stored in a more secure place, networks not having maximum security on user’s data already gives out major red-flags to any dApps developers planning on storing data on the network.
The SKALE network offers developers the opportunity to deploy scalable smart contracts and dApps on its network. It also provides an effective way and process to store files safely and with the effectiveness of the storage system, developers can also gain access to store a trained machine learning model on the SKALE network. It’s very rare to see such a network that allows storage of machine learning but the SKALE network provides that network which offers the integration of decentralized applications to run few predictions, analytics, and even data filtering on the sidechain.
Roadmap of the SKALE network
The SKALE network roadmap provides an overview of the entire project which includes the milestones, resources, and planned timeline. The SKALE network roadmap was classified into three mainnet launches:
- Phase 1
- Phase 2
- Phase 3
In phase 1 mainnet launch, the network launch happened during June 2020 and it only had a focus on the validators who volunteered to participate in the SKALE testnet, the mainnet was restricted to everyone and as of then, it didn’t support the staking of the SKALE network token (SKL) and the transfer of the SKL token.
In phase 2 mainnet launch, the software release happened during October 2020 and launched with almost 135 active nodes with 26 different qualified validators and also recorded almost 3500 genuine accounts staking the SKL token on the SKALE network. The phase 2 mainnet launch aimed at unlocking staked tokens and issuance while keeping restrictions on transfers of tokens and exchange listings.
In phase 3 mainnet launch, a 60-day Proof-of-Use period is undergone before this phase and remember, in phase 2, there was a restriction in the transfer of tokens and exchange listing but in the final phase, the SKALE network was made open to all users, holders, community and developers making sure that the unlocked SKL token transfer and exchange listing are made available for trading, staking and delegation. Now with the unlocked token being able to be transferred, validators and developers from the various networks were given access to join the SKALE network.
SKALE’s Team and Contributors
ELEMENTS OF THE SKALE NETWORK
The SKALE Network operates effectively on the Ethereum Blockchain and comprises two elements that make it stands strong in the crypto ecosystem. These elements are:
- SKALE Nodes
- SKALE Manager
Now, let’s give a brief description of these listed elements to get more clarification of how it has been of more benefit to the SKALE network.
1. SKALE Nodes
The permissionless SKALE Node makes use of the SKALE smart contract which are deployed synchronously to validate all sort of transaction happening around the elastic sidechain. This large set of nodes being deployed on the smart contract provides an effective analysis of the SKALE Network and the SKALE issuance token.
The SKALE network possesses a Proof of Stake (PoS) network which utilizes a work token for the provision of network resources. For procession of the staking of SKALE, developers need to create chains by selecting:
- The size of the chain (can either be small, medium, or large)
- Duration of the chain (ranges from 6 – 24 months)
Before SKALE tokens are staked, the size of the chain and duration of the chain is first selected, after selection, the staked SKALE token is now moved into a bounty pool, the staked SKALE in the bounty pool would serve as incentivization to validators within the network.
Now let’s look at how validators are incentivized in example, imagine up to five thousand (5000) validator nodes are selected and all performs well, each of the nodes would be given access to participate in the bounty pool as I mentioned earlier, remember, before the SKALE token is staked, the size of the chain and the duration of the chain are carefully by validators. Now, the selected validator nodes on the bounty pool are incentivized but won’t be rewarded equally as there are components that slightly adjust the payout based on the duration of time tokens are staked on the network. So, if the SKALE token is staked for let’s say 24 months, there would be a greater reward disbursed to the node validators. So here comes the law that abides for Proof of Stake (PoS) on the SKALE network, the longer the duration of staked tokens locked up on the network, the greater the percentage of payment to node validators.
2. SKALE Manager
The SKALE network offers developers the opportunity to create and integrate smart contracts on its network. The SKALE network built on the Ethereum blockchain has an element located on the Ethereum Mainnet blockchain called the SKALE Manager.
Just imagine the SKALE manager as a cage where different animals are kept, the animals in this context will represent the integrated smart contract more like nodes, so for a different specie of animal to be kept together, you definitely know, the complexity of the animal should be kept together, for example, keeping a dog with a dog and a cat with a cat, so the cage serves as the entry point to all the animals and the best group of animals that meets the required size and performance would be selected.
The SKALE Manager is the entry point to all smart contracts created on the SKALE ecosystem which enhances the randomness of the Ethereum mainnet to select a specific group of nodes that meets the required sub-node size. Once these requirements are met, these sub-nodes are appointed as elastic sidechains.
The SKALE Manager comprises of the following stages:
- Node Creation
- Node Destruction
- Elastic sidechain creation
- Virtualized sub-node shuffling
- Elastic sidechain destruction
For a node to be created on the SKALE network, some requirement is needed to be known like the specific node that supports the network hardware. After this node meets up the requirement, a SKALE daemon which is known as a multitasking operating system is needed to take up that same node that supports the network hardware, merging the network to the SKALE manager, remember, the SKALE manager is the entry point of all smart contracts.
The request sent for the node to join the SKALE manager contains huge data gotten from the SKALE daemon. Few of the data gotten are:
- Public Key
- I.P address
Now that you have gotten all that the request data entails, now the next question, What Next?
Okay let’s get back to what the request process would be next, the request now is sent to the Ethereum network and the prospective node is added to the system. These nodes can be added in two different ways, either through:
a) Full node
b) Fractional node
For the prospective node to be added on the full node, the node having enough network resources will be utilized on a single elastic sidechain while the prospective node that is added to the fractional node would take part in the multiple elastic sidechains.
Now that the prospective node has either been added to the full or fractional node, the validator could also change its mind to exit the network. Yes, it is very possible exiting the network but there are criteria that would have to be taken and fulfilled to ascertain for a successful exit.
So, when planning an exit, nodes must first declare their exit and after the declaration of exit, then a waiting period would be fixed for the node, this period is called the finalization period and it is a period where node peers are decommissioned and new nodes are appointed the position of the exiting node, the period will last for 48 hours that is 2 days.
After the finalization period is met, the node on the network becomes inactive and would be allowed to withdraw all initial token staked on the network.
Now the next disturbing question, ‘what if a node can’t wait for the finalization period and wants to exit immediately?’
The SKALE network always has answers to all questions thrown, yes, the node can exit the network immediately without waiting for the finalization period, just that it won’t yield the same effect as waiting for the finalization period. If the node exits immediately, the node would be assumed a dead node and the bounty for that node won’t be paid, all this can be known through the SLA virtualized sub-nodes
Elastic sidechain creation
In order to create an elastic sidechain, two factors are to be considered:
i) Selection of the chain configuration
ii) Duration of time to rent a resource network to maintain the elastic sidechain
The SKALE manager allows users to meet these criteria by providing a variety of options in the selection of elastic sidechain virtualized sub-nodes ranging from small (1/124), medium (1/16), and large (1/1) of each node’s resources.
As the SKALE network continues to develop gradually, users on the network would be given access to choose the:
i) Number of virtualized sub-node
ii) Size of virtualized sub-node
iii) Number of signers
All this point listed above makes up all the selection needed for node creation on an elastic sidechain. In the SKALE network, all resource network depends on the size of the chain, let’s look at it practically, imagine you had a bowl of rice and needed 2 different pot to cook it, a small and a large one, you definitely know that the bigger pot would cost more than. So that’s how the resource network works, in terms of the pots, both small and large pots can cook the rice but what differs is the size of the pot.
Now that the number, size of virtualized nodes are chosen, a creation request is then sent to the SKALE manager and the elastic side chain is automatically created. The creation of an elastic sidechain can also be altered if the resource network is not enough, the transaction would likely cancel and the user who wanted to create the node would be immediately notified.
Virtualized sub-node shuffling
Remember in the creation of an elastic sidechain, some criteria were given to be selected so as to enhance the gradual development of the SKALE network. After the selections are made, developers are provided with a better option which is an enabled virtualized sub-node that would act in form of security to curb out all measures encountered during creation. You might be wondering, what’s the actual need for the addition of a shuffler upon the creation of an elastic sidechain. In here, shuffling helps to lessen or reduce any collusion attempted by the virtualized sub-nodes within each elastic sidechain. The shuffling is a process through which the SKALE manager serves as the entry point to other smart contracts on the SKALE ecosystem.
Elastic Sidechain Destruction
Remember when we talked about node destruction, we said that the nodes must first declare their exit and after the declaration of exit, then a waiting period would be fixed for the node, this period is called the finalization period but for the elastic sidechain destruction, users are given opportunity to rent time resources based on time duration and when it is exhausted, the creator of the node gets a notification of the pending deletion of the chain and duration to refill or increase the chains lifetime.
if the chains are destroyed, the assets would be transferred to the owner of the mainnet and the following would happen:
- The virtualized subnodes would be automatically removed
- The storage memory would reset
- After the removal of virtualized subnodes, the SKALE manager would then reward the submitter who commissioned the destruction of the elastic sidechain.
THE SKALE NETWORK TOKEN (SKL)
For validators to stake tokens, we all know there should be a token that would be available for staking and deployment of the resource network.
Now the question that’s going through your mind:
What are the SKALE layer-2 networks without its token?
The SKALE network made its first phase of the mainnet live on the 30th of June, 2020, at that time, staking and transfer of the $SKL token wasn’t supported then. After the launch of the first phase of the mainnet, the ConsenSys Activate Token sales took place
The SKALE network made its $SKL token sales on the 11th of September, 2020, and actually did gain mass adoption on sales. Nearly four thousand users purchased over 167,139,884 $SKL across 90 countries during its public sale launch at a price of $0.03 per SKL. The mass adoption gained after the token launched has greatly improved the network security and has made the SKALE global and has increased the number of users holding the $SKL token.
The second phase of the mainnet was live on the 1st of October, 2020 to support the delegation and staking of the SKALE network token (SKL), over four thousand (4000+) users in more than ninety countries (90+) staked their $SKL tokens to the 135 available nodes on the SKALE network. The number of validators in control of the above-listed nodes was forty-six (46) in number providing maximum security via delegation and staking.
The third phase of the mainnet which is the final phase was live on the 1st of December, 2020, it was focused on the unlocking of all staked tokens on the SKALE network that actually did complete the proof-of-use period.
The SKALE network token (SKL) is a hybrid token that has quite a several use cases on the network. It serves as:
- Delegator staking - Proof of Stake (PoS) for delegators.
- Right to work – Proof of Work (PoW) for validators.
- Access to deployed and rented elastic sidechain on a resource network for developers.
In as much as these use cases are associated with validators, delegators, and developers, the SKALE Network Token (SKL) also performs some effective usage for:
- The SKALE network intends to be community-driven for future development, The SKALE network token (SKL) holders will receive voting power through their tokens which would be used for on-chain voting especially voting of validators on the network. The usage of this token would allow token holders to vote to adjust economic parameters such as the pricing for subscription fees.
- Payment method using the SKL tokens for developers who choose to gain access to the SKALE elastic blockchain.
- Staking and earning rewards, incentivization is then given to validators and delegators staking their token. Token holders would be able to stake their SKL tokens to participate in consensus and also receive incentivization for improving network security.
- Provision of security via delegation and staking to all $SKL token holders who stake their token on the SKALE network node.
You might be wondering if the SKALE token is an ERC-20 token but here’s the shocker, the SKALE Network Token (SKL) is built on an ERC-777 token standard with the support of delegation of all tokens. The SKALE Network chose the $SKL token to be on the ERC777 standard because it’s fully backward compatible with the ERC-20 and it also supports all ERC -20 Users on the Ethereum blockchain giving all participants access to the Ethereum chain.
The ERC-77 provides high security to the SKALE network upon staking and delegation and that’s what makes it genuine from other ERC supports. This same support on the SKALE Network would give users who are delegators the access to share their delegation key with the staking provider while their tokens are being stored in any type of wallets be it ‘cold’ or ‘hot’.
The Network of Decentralized Economies (N.O.D.E) Foundation after supporting the SKALE network in providing a wide usage of the SKALE network token (SKL) in on-chain voting maximum security and incentivization for all staked funds, also chose the ConsenSys Activate Platform which activates facilities the launch and use of blockchain networks.
With the ConsenSys Activate Platform, network rewards are received from the token sale, launch of the SKL token, staking, and delegations all done by the SKALE network token (SKL) holders. In case you find the ConsenSys Activate Platform interesting, you can find out more about the SKALE Delegator Hub here.
Here's a detailed overview of the SKALE network token (SKL), all information about the SKALE network token (SKL) here is based on the total supply upon creation of the SKALE contract:
- Ticker: SKL
- Contract: 0x00c83aecc790e8a4453e5dd3b0b4b3680501a7a7
- Token Address
- Token Standard: ERC-777
- Public Launch Allocation: 175,000,000 SKL
- Public Launch Price: $0.03
- Total Supply: 4,140,000,000 SKL
- SKL Token site
The SKALE Network Token (SKL) was allocated and distributed to be used for all continuous activities of the project and it’s listed as thus
- Ecosystem Fund – 1.3%
- Core Team Pool – 4.0%
- Validators Reward – 33.0%
- Delegation Allocation – 28.1% (for early supporters and public allocation)
- SKALE Foundation – 10%
- Protocol Development Fund – 7.7%
- Broader Founding Team – 16.0%
Upon staking of the SKALE network token (SKL), standard validator rewards are earned and the total token lock period ranges from 15 months to 36 months.
After the public launch, the SKALE network token (SKL) was listed on a few cryptocurrency exchanges, and here are the exchanges $SKL is currently listed on:
For the SKALE Network token ($SKL) listing on Binance, it was launch at exactly 2020/12/01 1:00 AM (UTC) with an open trading pair for SKL/BTC, SKL/BUSD, and SKL/USDT with a listing fee of 0 BNB.
The SKALE network token (SKL) price can also be monitored to keep users or $SKL holders updated about the current happenings of the token. To monitor the $SKL price, it’s quite possible through this platform:
A STEP-BY-STEP GUIDE ON HOW TO STAKE THE SKALE NETWORK TOKEN (SKL)
The SKALE network token (SKL) has been useful to validators, delegators, organizations, businesses, and people on the network. Since the listing of the SKALE network token (SKL) on various cryptocurrency exchanges, the token has gained massive traction and has become beneficial to everyone especially delegators who stake their SKALE network token on the network.
Most users accumulate a large amount of the SKALE network token (SKL) through sales or through trading but still keep the SKL token in their wallet or exchange for a long time. The time this amount of SKALE network token (SKL) is left dormant on a wallet could be used to even accumulate more $SKL tokens during staking.
Are you still wondering how you can earn more $SKL via staking?
Now let’s look at how staking can yield more $SKL using the Activate platform by ConsenSys CodeFi.
If you remember in one of the sections, I talked about the CodeFi’s Activate framework used by the SKALE network which was used to enable users on the SKALE network to purchase or stake the SKALE network token to actually prove its use. For staking of SKL, it requires a few steps, let’s take it one at a time.
i) To be a participant in the staking of the SKALE network token (SKL), you need to first open an Activate account and you can sign-up here. In signing-up, you just need to fill out some essential and necessary information especially choosing a very strong password which only you can access anytime, any day.
After registration of the Activate account is done, a confirmation mail is sent and upon confirmation, you can sign-in properly and do the Know Your Customer(KYC) verification. All verifications have now been met, now it's time to connect your wallet to Metamask. Make sure you have the Metamask extension installed on your device to make the connection of your Activation Account successful.
You can see, it was quite an easy one, let's move to the next stage which would be to stake with the validator of your choice.
ii) Now that your Activate account is connected, the account needs to be funded with the amount of SKL token to be staked. You just need to copy the Activate address allocated to your account and send the amount of SKL you would want to stake for that period. After funding the account, quickly navigate to the 'Staking' page on the Activate webpage where all forms of staking would be done.
The CodeFi's Activate Staking webpage is a well-detailed page that shows where and how staking would be done, now you are almost one-stop to staking your SKL token. On the staking page, you have a list of different validators on the SKALE network, just click on the validator of your choice and stake your SKALE network token (SKL).
The minimum amount of the SKALE network token to be staked is 100 $SKL
The amount of SKL token and staking period are now chosen. immediately the validator you chose accepts your delegation of the staked token, confirms the transactions, and sends out a summary of the staking request.
it was an easy one right! it's always easy staking the SKALE network token (SKL) on the SKALE network. That's not all, after successfully staking the SKALE network token (SKL), How is the SKALE staking managed?
The management of stakings brings us to the next stage which is the final stage required for staking.
iii) Now that staking is already done, it would be very nice if we actually have an interface that shows the user, how far the staked token is doing and the current happenings of staking rewards, and what estimated reward you will be getting after the staking period you chose. For the management of the staked tokens, it can be tracked in the 'Token Inventory' interface, the menu serves as an overview of the staking operation where delegations are maintained and monitored.
You might want to ask, 'Can the staking period be automatically renewed?'
The answer to that question is "Yes", staking period for the SKALE network can also be auto-renewed for the same period as chosen before, so for example, if you chose three (3) months for the staking period of SKL tokens, it will automatically renew it for another three (3) months. This SKALE network token is automatically re-delegated to the same validator chosen as at the first staking and it comes with some extra transaction fees which would be paid by the delegator.
After the staking period is automatically renewed, it can never be reversed.
THE SKALE NETWORK FOUNDATION
The SKALE Foundation is an open-source elastic network that stands to offer High transaction throughput, faster transaction finalization at a reduced transaction cost. The SKALE network has been designed to support businesses, people, and organizations, for their support to stand up strong, the Network of Decentralized Economies (N.O.D.E) Foundation is a platform that has been created to carry out the mission of supporting the SKALE network.
The Network of Decentralized Economies (N.O.D.E) Foundation supporting the SKALE network is governed by the SKL token which provides wide usage in on-chain voting, incentivization was given for staking and earning, and also providing maximum security for all staked funds. You might be asking why SKALE labs allowed the Network of Decentralized Economies (N.O.D.E) foundation to support its network but just look at it in this scenario if you do want a grant program to run, you need an entity that would make the program happen, so SKALE labs would be as a vendor supporting the Network of Decentralized Economies (N.O.D.E) foundation.
For the Network of Decentralized Economies (N.O.D.E) foundation to support the SKALE network, few representatives from the network are needed to be elected, this election would help know the potential dApps developers that would run:
- The sidechain on the SKALE elastic network.
- The node as a validator on the SKALE network.
- Build, maintain, and evolve the codebase on the SKALE network.
The SKALE network has allocated almost ten percent (10%) of the total pool of the SKALE network token (SKL) to the elected representatives (dApp developers) that will serve the community through on-chain voting, grants, and budget/treasury decisions. These funds SKALE network allocated above would help ensure the longevity of the Network of Decentralized Economies (N.O.D.E) foundation and also help in fulfilling the SKALE mission.
More information about the SKALE Network: