KLYNTAR Basics. Part 1: The idea of multistaking on KLY for the theoretical maximum security & decentralization😼

Intro

While working on the KLY network, we had a dream like the sheikhs from Dubai — we should have everything that is the fastest, the best, the most reliable and the largest. We did not want to create a network that, having its own features and innovations, would have a positive impact on the crypto industry — on its present and future.

That is why, in this article we would like to introduce you to one of the pillars of the KLYNTAR project — multistaking. This mechanism is innovative for L1 chains (or L0, given the fact that there are other blockchains in the KLY ecosystem). We will tell you what this mechanism is and what impact it will have on the KLY project and the industry in particular.

Let’s get started!

What is multistaking?

Multistaking — next generation of staking mechanisms in the crypto industry

In recent years, when the vector of the blockchain security model has changed towards PoS & BFT consensuses, staking has become a standard mechanism for guaranteeing the integrity of validators.

Its principle is simple:

1. The validator promises to be honest and play by the rules of consensus — not to create forks, to be constantly (or almost constantly) online, and so on.
2. The validator benefits from this because he wants to receive commissions for network transactions and/or a reward for generating a block (each blockchain has its own way)
3. The network cannot simply trust the validator and asks to freeze some of the network’s coins as a guarantee of the validator’s honesty. Thus, the network insures itself by not allowing the validator to disrupt the network because he cannot sell frozen coins

Since KLY is also built on the modified BFT Tachyon consensus, we follow a similar principle.

However, not all so simple 😏

The basic idea of multistaking is that we don’t care what you risk, just stay honest and follow the network rules

Currently, networks that support staking face the following problems:

1. Lack of staking power makes network insecure and centralized
2. Potential stakers and ordinary hodlers don’t want to sell their bitcoins, ethers or other tokens to become staker in a new network because they are afraid of losing investments because of volatility
3. Stakers(delegate coins to validators) are afraid to provide their coins to unknown pools. As a result, in most cryptocurrencies you know, the most influential pools are the same representatives — staking services and CEXes. Example — Everstake, Binance, Coinbase, etc.
4. New crypto projects that appear should use their own small groups of validators for security. As a result, we get many semi-secure and semi-centralized blockchains

Let’s see how multistaking solves these problems

The highest possible security in the history of the industry — stake everything you have

Multistaking expands the boundaries of staking to the maximum of the crypto industry

With multistaking you can provide your bitcoins, ethers, NFTs, stablecoins and so on to become a staker 🔥🔥🔥

Now, not only the network’s native coins will protect it, but also any other resource that has value. This approach has 2 important advantages:

1. Staking power grows up to endless values👀. Now network emission is not a limit for staking
2. Protect your stakes from volatility 💸 (because no need to risk and sell your BTC to become a staker on KLY)

We plan to support both tokens on our network and tokens on other trusted networks. For example, your stake could be:

1. USDT from smart contract in KLY-EVM
2. Memecoin from the Solana network
3. Stablecoin from the Ethereum network

And so on😼

Unobtanium — a unified staking points on KLY

In order to unify staking resources, an additional resource was introduced into the network protocol, which we called unobtanium — by analogy with the fantastic mineral from the Avatar movie. In the following text and in the code you will see its names as unobtanium or UNO(shortly).

Unobtanium is credited to your account in accordance with your stake. Oracles and a system smart contract for minting unobtanium will be responsible for this.

For example, here is a diagram that will clarify the situation:

You can use the points you receive to stake validators and you will receive a percentage of their income.

Risk-free staking — start to stake in a trustless way

The main problem with many staking-based networks is the fact that you must trust the pool you are staking on. Ultimately, you don’t want to lose your bet.

Also, you have to freeze your coins for a while. Although liquid staking protocols exist, they do not in any way impact the security of the underlying network.

Our task is to do so:

1. It was possible to bet safely even on small (less popular) pools. They usually offer a better return percentage than larger, well-known pools
2. The resource that will be used for staking must be difficult to obtain, but at the same time be untradable so that in the event of a bet on a malicious pool and slashing, you are not afraid of losing your resources

We present risk-free staking — a system where you can use various resources for staking without the risk of slashing.

Such resources could be:

1. UTXO age of bitcoins — it is very time-consuming to mine 1 BTC with an age of more than 600,000 blocks (for example)
2. The fact that you are a validator in other blockchains — given the fact that they are secure, it can be argued that 67% of them are honest and can be allowed to be a validator on KLY. WE NEED MAXIMUM DECENTRALIZATION
3. The number of blocks you have mined in mining networks (BTC, LTC, etc)
4. The beauty of the block hash in the Solana blockchain(e.g. vanity prefixes)

Example

Let us demonstrate a step-by-step example of how this can work using Bitcoin as an example:

In this example, the user Kappa(famous meme) wants to receive staking points on the KLY blockchain. He has 0.05 bitcoins that are more than 10 000 blocks old. Bitcoins are held in 3 UTXOs and are used as transaction inputs.

1. In the first step, Kappa prepares its UTXOs — for example through a wallet application or through software SDKs
2. Next, Kappa creates a transaction where it indicates 2 outputs — sending bitcoins to itself and OP_RETURN output where it indicates its address in the KLY network
3. Then the transaction is added to the Bitcoin network and its hash is equal to feed1337…
4. Now Kappa goes to KLYNTAR and creates a transaction calling the system smart contract for minting unobtanium. The KLY network checks that sufficiently old inputs have actually been spent (with an age of more than 10 000 blocks) and adds the required amount of UNO that can be used for staking

It is important to note that multistaking is such a flexible system that for each resource at different times you can assign your own conditions — the age of UTXOs for bitcoins, the rarity of the hash of a block created in Ethereum, and so on.

Let’s clarify a couple of points why this is a win-win strategy:

1. Hodlers of different assets get an additional opportunity to earn money
2. The KLY network increases decentralization (Nakamoto coefficient) and maximum level of security
3. We can afford such a risk-free mechanism for stakers because the number of honest players (miners, validators and ordinary users) in other networks is significantly higher than the number of attackers. In fact, to have a serious impact on the network, an attacker now needs to control more than 33% of all resources of the entire blockchain industry. And this is hundreds of billions of dollars

Shared Security Mechanism

One of the products of our ecosystem will be KLY Blockchains — the ability to launch your own blockchain in the KLYNTAR ecosystem like Cosmos & Polkadot.

Working together we get:

1. Possibility of creating a common security layer
2. Data exchange between chains
3. Other types of cooperation (serverless blockchains, etc.)

Let’s stop at point 1

By launching your blockchain in our ecosystem, you can use all (or at least part of it) liquidity in the form of KLY & UNO + resources from other KLY Blockchains to create your own set of validators.

We hope that such a mechanism will have a positive impact on the fault tolerance and security of new blockchains. We will talk about KLY Blockchains in future articles.

Summary

Damn, we are so glad that we are gradually revealing our technologies and developments and introducing more and more people to them🔥 With each article, you are more and more immersed in the whole development stack.

In general, the multistaking scheme looks like this:

We can’t wait to share with you other developments and innovations of our project. Stay in touch to keep up to date with the news!

Links

• https://docs.klyntar.org
• https://twitter.com/KLYN74R
• https://github.com/KLYN74R
• https://discord.gg/f7e7fCp97r
• https://docs.klyntar.org/deep-dive-into-kly/run-kly-validator