What kind of blockchain infrastructure do we need to support dApps in the next decade?

With the last cycle of crypto infrastructure investment boom, institutions with the right to speak, such as the Ethereum Foundation and Paradigm, have delivered new terms to the industry one after another, and everyone is eager for the arrival of Mass Adoption. But this year, the fig leaf of this industry has been unveiled piece by piece. Retail investors no longer believe in the narratives created by VCs. Famous projects have been exposed to negative news one after another. No one believes in technology anymore, and joining the rights protection group has become a symbol that is both humorous and sad. Anxiety has been shrouding the market. It seems difficult to find a clear direction under the hustle and bustle, let alone answer the questions raised at the beginning of the article.

But in a white paper, Alephium, which has always insisted on being a POW public chain, gave the answer. The idea is to create a scalable blockchain with high throughput and low transaction fees, with the advanced programmability of Ethereum and the reliability and security of Bitcoin, so as to create a "scalable Bitcoin with reliable smart contract solutions."

This narrative sounds familiar at first glance, for example, this project wants to be "Ethereum's own son", and that project is positioned as "Solana's own daughter", creating a more popular narrative through technical analogies and migration. But wanting to become a scalable Bitcoin is a stage that Bitcoin itself is also going through. The existence of Alephium is to prove to the market that POW is not declining, but is seeking to change the crypto world with technological changes.

In August this year, Bitmain announced the launch of a mining machine specifically for Alephium mining, which means that this Layer1 public chain, which was founded in 2019 and has been deeply engaged in technological innovation, has ushered in a new era.

Sharding + PoLW + sUTXO, taking technological innovation to the extreme

For a long time, some people have simplified the comparison between PoW and PoS to the difference of the simple blockchain "consensus mechanism", and have limited the discussion to technical issues such as the security of the ledger, thus misleading everyone to think that PoW is an unnecessary and avoidable waste of energy. Ethereum, which has successfully switched to POS, has changed its goals several times due to market changes, from the world's computer, the dApp that never stops, to the world's financial settlement layer.

The story of Ethereum has been changing, but the pace of technological breakthroughs has slowed down. However, thanks to the resilience and first-mover advantage of the developer community, Ethereum killers have become a popular public chain narrative; becoming EVM compatible or directly building a Layer2 has become the easiest choice for current developers. Even though the Bitcoin ecosystem at the beginning of this cycle successfully caught the attention of developers, it set off a wave of copying Ethereum's one-click release of L2, without fundamentally realizing what it means to solve Bitcoin's scalability.

Looking at the history and current progress of blockchain development, Bitcoin has increasingly consolidated its position as a store of value, but has given up a certain degree of freedom; Ethereum represents the field of operating systems, which is flexible but faces multiple vulnerabilities. Alephium represents the solution to the impossible triangle of the blockchain dilemma, and it is advancing in a way that is linked one by one and gradually finds the optimal solution in the process. This can't help but remind people of the struggle of Bitcoin community fundamentalism in the face of a new cycle, or all the pending items piled up in the Ethereum roadmap.

Blockflow takes the lead with elegant and practical algorithms

The blockchain trilemma is simply about the balance between scalability, security and decentralization, but from a technical point of view, it involves not only these three dimensions, but also more factors, such as consensus algorithms, historical growth, state growth, block execution, transaction execution, etc.

In order to improve scalability, a very important method is sharding technology, just like the database uses sharding to achieve horizontal expansion, the blockchain can also adopt the same approach. Vitalik wrote in his blog, "Sharded blockchains are able to handle more transactions than a single node, and it can run on an ordinary laptop without relying on any supernodes to maintain decentralization. In addition, it is highly secure, and attackers cannot attack part of the system with a small amount of resources, but can only try to control and attack the entire system."

However, Ethereum has been limited by the underlying protocol and has chosen the proven Rollup technology as a scaling solution. Sharding has great challenges in terms of communication complexity, security assurance, development and dynamic management. However, Alephium does not adopt the main chain architecture, so there is no need to rely on a centralized blockchain to synchronize all shards. The advantage of doing so is that its cross-shard transactions can be completed in one step, providing users with an excellent transfer experience.

The hero behind it is Alephium's unique sharding model-Blockflow. Blockflow uses a scalable UTXO model, combined with DAG and sharding technology, and is the first horizontal expansion algorithm that supports single-step cross-shard transactions. Unlike existing mainstream solutions, the Blockflow algorithm does not need to rely on the Beacon Chain and decentralized random numbers, which is more elegant and practical.

Currently, Alephium is able to support 400 TPS through 16 shards, and is expected to expand to 10k TPS after increasing the number of shards. In the recent Rhône upgrade, Alephium reduced the block time to 16 seconds, achieving fast transactions while ensuring security. This scalability beyond the limit lays the foundation for the rapid development of the Alephium ecosystem, making it an important competitive position in future blockchain applications, especially in scenarios that require high-frequency transactions.

Reducing energy consumption, how PoLW attracts ASIC

Two years after its establishment, Alephium started a token presale, raising more than $3.6 million. In 2021, Alephium launched the mainnet and launched the token ALPH. At the same time, Alephium also introduced the concept of Proof of Less Work, which aims to optimize the use of computing resources in PoW and reduce the energy consumption of the network.

One of the points that many PoS supporters criticize the POW public chain is that PoW mining machines consume a lot of electricity resources and are not environmentally friendly. Miners use equipment and energy such as GPUs, FPGAs or ASICS to solve hash problems, and the cost of mining is a combination of equipment costs and energy costs. But Alephium adjusts the traditional proof of work to achieve a similar level of security through a less energy-intensive consensus mechanism.

In PoLW, miners on the Alephium blockchain will need to burn ALPH tokens to confirm blocks and solve hash problems. For example, assuming that BTC and ALPH have the same value:

· A miner gets a mining reward of 1.25 BTC by spending 1 BTC of equipment + energy costs;

· A miner gets a mining reward of 1.25 ALPH by spending 0.15 ALPH of equipment + energy costs and burning 0.85 ALPH;

Although the cost is the same, the energy consumption is significantly reduced. In this case, the mining cost is both an external cost (energy, equipment) and an internal cost (burning tokens within the network). However, the cost of mining a block only increases when the network's computing power exceeds a certain threshold (1 exahash), which significantly reduces energy consumption by up to 87% while maintaining network security. According to official website data, Alephium currently has a computing power of 3.3 (PH/s).

Alephium was initially popular for dual mining with Ethereum, which led to a rapid increase in its computing power. Recently, with the addition of FPGAs and ASICs, the computing power of the network has been greatly improved again. The diversity of mining hardware caters to different types of miners, from large-scale operations to small home miners, fostering a decentralized and powerful mining ecosystem. The transition from GPU to ASIC mining, while challenging, has also proven the growth and stability of Alephium.

Alephium hashrate change trend chart｜Source: hashrate.no

The premise of attracting ASICs is that Alephium chose ASIC-friendly algorithms from the beginning. Cheng Wang, the founder and core developer of Alephium, believes that it is almost impossible to design a truly ASIC-resistant algorithm, as evidenced by other blockchains such as Monero and Ethereum, which have either been struggling with ASIC resistance or planning to transition to PoS. ASIC-friendly algorithms are simpler and less resource-intensive, which is in line with Alephium's goal of maintaining scalability and lightweight.

Programmable and secure sUXTO

Alephium's technological innovation is also reflected in its release of its improved UTXO model Stateful UTXO, which adds support for smart contracts while maintaining the efficiency of the UTXO system, making Alephium one of the earliest projects to achieve smart contract scalability on the PoW blockchain.

There are two kinds of states in blockchain technology: mutable state (as seen in Ethereum) and immutable state (such as UTXO or eUTXO). Mutable state is more flexible and expressive, as evidenced by Ethereum's vibrant ecosystem. Bitcoin adopts the latter, and it's obvious that everyone thinks Bitcoin is more secure.

Alephium's sUTXO transaction model combines the security of Bitcoin's UTXO model with the flexibility of Ethereum's account model to support mutable states for smart contracts. This is of great significance to developers and users, because sUTXO makes it easier for developers to build smart contracts and ensure secure asset management. It is precisely because Alephium supports smart contracts that there are more possibilities here.

Supporting these possibilities is Alphred, a virtual machine based on the sUTXO model launched by Alephium. As an important part of Alephium technology, it took 3 years to develop and improve. Half of the updates in the first two network upgrades were related to Alphred.

Alphred uses a more advanced stack virtual machine design, with smaller contract code, less gas usage, and higher execution efficiency. In order to allow developers to devote more energy to the development of business logic instead of wasting time on patching vulnerabilities or optimizing performance, Alphred has made outstanding improvements in security compared to EVM. For example, it eliminates reentrancy attacks on assets and prohibits flash loans at the protocol level; compared to the phishing problem caused by EVM's unlimited authorization, Alphred has designed a new APS system (Asset Permission System), which requires immediate approval for asset use and simplifies user operations.

To match this, Alephium has also introduced a Ralph language for Alphred. Compared with traditional smart contract programming languages, Ralph has stronger expressiveness and security, allowing developers to write complex smart contracts more easily without worrying about common security vulnerabilities.

No more mining, withdrawal and sale, Alephium's sustainable practical ecology

The previous article has introduced that the existence of Alephium has allowed the technical level of the public chain to break through to the extreme, but in the final analysis, technology is not the core barrier of the public chain, but the sustainable development of the ecology is.

If you study the path of Solana's success, it is not difficult to find that it has focused on promoting developer friendliness since its inception, attracting a large number of developers from the Silicon Valley and Wall Street financial industry to participate. In addition, Solana has quickly attracted a large number of outstanding developers and projects through large-scale hackathons and developer incentive programs, which have laid the foundation for the prosperity of its ecosystem.

Alephium has obviously discovered this. It has significantly improved development efficiency by introducing new development tools and programming languages, allowing developers to focus more on the logic development of applications rather than being troubled by cumbersome infrastructure issues. Of course, Alephium did not blindly imitate Solana, but innovated according to its own characteristics.

No more mining and selling

Currently, the Alephium ecosystem covers multiple fields such as DeFi, dApp and NFT markets. According to Mobula data, there are more than 40 active tokens on the Alephium network, and DeFi liquidity exceeds 10 million US dollars. In the latest hackathon competition, more than 100 projects have participated, including projects originally created based on networks such as ETH and SOL.

The ecological outbreak has directly driven the market's demand for tokens. As a PoW public chain, 86% of Alephium's tokens are produced through mining. The surge in token prices has encouraged a large number of miners to enter the market. According to hashrate.no data, Alephium's total network computing power has increased from 0.14 PH/s at the beginning of the year to 3.2 PH/s, an increase of more than 21 times.

In November 2023, Alephium released the bridge function, which introduced stablecoins to Alephium's ecosystem, thereby bridging stablecoins to Alephium. In addition, users can also bridge ALPH to Ethereum and trade on Uniswap, which has led to an explosive growth in Alephium's trading volume. At present, Alephium has executed $30.6 million in transactions, has $9.08 million in TVL, and $22.98 million in bridged TVL.

What makes an ecosystem sustainable?

In the view of Maud Bannwart, COO of Alephium, the first element is practicality. "Ultimately, the most fundamental way for any ecosystem, any technology, any project to continue to exist is that it must do something useful." It is precisely because of Alephium's series of developer-oriented and community-building behaviors that it has crossed the bull and bear markets and is not driven by cycles.

Because of Alephium's unique design, it not only provides convenience for developers, but also provides new financial opportunities for miners. Because Alephium supports smart contracts and dApps, mined ALPH tokens can be used in DeFi platforms, or USDT loans can be obtained by pledging ALPH to pay for mining machine operating costs, rather than selling tokens immediately. This shift can increase token utility, reduce selling pressure, and potentially increase the value of Alephium. Combining mining rewards with DeFi can provide miners with an additional source of income, creating a more dynamic and sustainable ecosystem.

In August this year, Alephium announced a collaboration with DIA to deploy a cross-chain oracle infrastructure, which introduced products including token price oracles, random number generators, and fair price oracles to the Alephium ecosystem, further consolidating Alephium's position in the DeFi field as a PoW chain with smart contract functions. Currently, multiple projects in the Alephium ecosystem, such as AlphBanX and Linx Labs, are ready to use DIA's oracle technology for their innovative applications.

Token Economy

Alephium's native token is ALPH, with a maximum supply of 1 billion. Of these, 86%, or 860 million ALPH, will be mined in approximately 82 years (starting from the mainnet launch in 2021). The remaining 140 million ALPH are used for ecosystem, sales, team and financial allocations.

Since Alephium uses PoLW proof, 860 million ALPH will be mined and distributed as block rewards to miners who secure the network. Alephium does not have a halving mechanism, and the block reward is dynamically adjusted based on the network hash rate and timestamp. So, at a certain point in time, whichever parameter is lower, the reward will be determined based on that parameter. Currently, the issuance plan is mainly determined by time-based rewards, which means that the number of rewards is gradually decreasing linearly and will then remain constant.

Although there is inflation, ALPH also has a deflationary effect. On the one hand, 100% of its transaction fees are burned, and on the other hand, each smart contract on Alephium needs to store 0.1 ALPH as contract storage rent. Although technically no tokens are burned (because they are retrievable), this may reduce the available tokens in circulation. In addition, the PoLW proof mentioned above requires token burning. Once the computing power exceeds the threshold, it will be triggered to bear part of the mining costs by pre-burning ALPH.

Are public chains really in excess?

In this cycle, practitioners are wailing that there is no new narrative, and the crypto industry has run out of water, so that all public chains have to rely on memes to save them from the water. But is this really the case? Or is it that the current stage is a good time to distinguish between investment and speculation, so that speculators have super-efficient productivity tools and investors can have good projects that they dare to invest in, which is the first priority for the future of encryption.

But at present, there are actually very few good targets for investment. When Cheng Wang, the founder of Alephium, was asked in an interview whether there is an oversupply of public chains, he replied, "There are many public chain projects, but the technology is reliable, the user experience is good, and very few can be implemented." The implementation here refers to the technical workability mentioned in the previous article, which is also the practicality mentioned when talking about ecology. No public chain can obtain real user data by gorgeous packaging and piled-up data. There have been too many cases of disappearance.

From the announcement of the world's first linear time asynchronous Byzantine consensus algorithm in early 2015 to the proposal of the Blockflow algorithm in 2017, Cheng Wang's pursuit of technology is unquestionable, which is also the foundation for Alephium to attract many developers and loyal users.

For public chains, maintaining the decentralization of blockchain is more important than achieving high TPS, and developers are more willing to develop applications on a decentralized public chain. Only on a decentralized public chain can developers develop freely without anyone's review, without worrying about risks such as code execution being interfered with, applications being removed, and users being blocked. Only on a truly decentralized blockchain can the ownership of digital property be truly guaranteed.

The name Alephium comes from "Aleph", which represents the size of an infinite set in mathematics. This is a tribute to the naming pattern of Ethereum, which is based on the symbol of the invisible and powerful "Ether". Both names reflect a profound vision for the basic technology architecture. Alephium and Ethereum share the same vision of building a decentralized technology ecosystem that is ubiquitous, full of potential, and capable of supporting unlimited possibilities in the future.

Decentralization is the essence of blockchain, just like Bitcoin was designed not for efficiency but for decentralization; Ethereum's design concept is also based on the principle that decentralization cannot be sacrificed. Decentralization is the most fundamental and only way for blockchain value to be realized. For it, people in the industry are willing to endure certain and temporary inefficiencies, and on the way to this end, more leaders like Bitcoin, Ethereum, and Alephium are destined to be needed.

Based on Alephium's current technical architecture, the impossible triangle problem of blockchain is becoming possible. What kind of blockchain infrastructure do we need to support dApp in the next ten years? A definite answer is that it should be craftsman-like like Alephium.

Project official website: https://alephium.org/

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