Core DAO uses Bitcoin to solve the Blockchain Trilemma

Core DAO uses Bitcoin to solve the Blockchain Trilemma


Core DAO merges proof-of-work (PoW) and delegated proof-of-stake (DPoS) with the hope of solving the blockchain trilemma.

The blockchain trilemma refers to the trade-offs layer-1 solutions must make when building a blockchain network. Between optimal security, scalability and decentralization, networks only have to choose two of the three elements.

Ethereum, for example, prioritizes security and decentralization, but is not extremely scalable. For this reason, with more users on the network, gas prices increase and transaction speeds decrease. The network has since introduced sidechains – layer-2 solutions – to solve this problem.

Core DAO has taken a different approach by using its Satoshi Plus Consensus. This consensus mechanism bridges the gap between PoW and DPoS, Rich Rines, an early contributor at Core DAO, told Blockworks.

“You get traditional DPoS elements on one side, then the other part that’s quite unique is the proof-of-work part or delegated hash,” Rines said. “We have an actor in our system called relayers, and what they do is run a light client on the chain for Bitcoin.”

Bitcoin blockheads are transmitted to the Bitcoin light client through these relays, Rines explained. Miners securing the Bitcoin network will have the option to choose to have their hash power in the Satoshi Plus consensus – meaning they will have to delegate their hash to a validator run by themselves or a third party.

It is important to note that this type of delegation will simply reuse the miners’ work without them having to choose between securing two different networks. In this way, the network can remain decentralized through Bitcoin computing power and scalable through DPoS.

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“It’s very difficult to be as decentralized as Bitcoin, we idolize Bitcoin … and part of our reward mechanism is those rewards that go to the delegated hash, which go to mining pools and are sent directly to the miners that allow Bitcoin security to increase, and there is no additional energy consumption,” said Rines.

By combining Bitcoin computing power for decentralization, DPoS management that enables scalability, and the entire network operation to maintain security, Rines notes that Core DAO is able to create a layer-1 solution that combines the three core elements of blockchain technology.

Core DAO recently launched a $200 million ecosystem fund to boost the Satoshi Plus consensus. The project will use the fund to grow projects in the ecosystem, finance marketing, research and recruitment programs.

“Unlike other projects, we look at it a little differently, the question we always want to answer is, is this good for our users, we want to give them unique experiences that they can’t get anywhere else, and we want to continue to double and triple down on that,” Rines said.

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