Function X March Hash Out

A closer look at the Function X Network

It has been a while since the debut introduction of the Function X network Infrastructure. We would like to take this opportunity to revisit and reiterate the uniqueness, capabilities and performance of the Function X network and, of course, the philosophy and rationale behind it.

Summary

1. Function X is a first-of-its-kind, highly customizable and expandable multi-chain architecture blockchain network that can meet different business’ needs
2. It is impractical to use one chain to solve all business problems so, different chains with different functions
3. Each parachain has different settings to cope with the specific business needs
4. Function X provides different strokes for different folks, e.g. Pundi X Chain for Payment, Margin X Chain for DEX, f(x) Core — Smart Contract Chain for Dapps
5. Function X has an Infinity tps with parachains and subnets
6. 3 key concepts (MEC) : Multi-chain structure, Expandable, Customizable
7. Simple analogy: It is a mixture of Polkadot and Avalanche

One of the most asked questions from our communities is, how fast is the tps (transaction per second) or how many transactions can f(x)Core process per block? Before we answer that question, we really had to determine whether we really needed to process every transaction within seconds? Or rather, if all businesses require super fast processing speed? What about the cost and risk? Or is it just because it is a number that makes it easier to compare blockchains?

The philosophy

The impossible trinity problem suggests that no solution can fulfill all three criteria: cost, efficiency and security. The key is the balance between the three elements in accordance with the circumstances, context and nature of the business.

We can all agree that different businesses have their own needs, standards and requirements. There is no such thing in the business world of “one solution fits all’’; this is because every solution has its own focus and concern within a certain context. The solution that solves problem A does not necessarily solve problem B or might even create problem C.

For example, the processing time of a $5 payment is rapid and fast; the processing time of a $200 bank transfer will require password or OTP verification; the processing time of a $100,000 bank loan will require KYC, collateral, earning capacity, etc. and a longer review period.

As the example above shows, the processing time of a $5 payment is the fastest, the $200 transfer comes in second and the $100,000 bank loan comes in last. The concern is not only for the amount of money involved (a larger amount implies higher risk) but also the business nature. No one wants to wait for their coffee for 20 minutes, so the payment needs to be fast. We can assume $5 payment is relatively insignificant and normal thus the bank and cardholder assume less risk and require no verification. The $200 transfer is a larger amount that the bank requires verification for to reduce the risk of a scam or misuse. The $100,000 of bank loan is a profit oriented business requiring the bank to ensure as best it can that the borrower will not default and will be able to pay the interest on time. This requires a longer review period.

We believe that different businesses have different constructs to fulfill respective business needs; this is the core value proposition of the Function X network — we care and cater for your specific business needs.

“I got different strokes for different folks” — Muhammad Ali

Architecture of infinity TPS

Function X network is a multi-chain structure that enables different function networks / parachains to be connected and work as a whole network. Each parachain or subnet (‘parachain’) can either work in isolation, without affecting other parachains, or work in tandem with other parachains while connected to f(x)Core.

Although all (para)chains are within the same network, the setting of each chain could be different. Each parachain is highly customizable and is not required to inherit the specifications and setup from f(x)Core. Each parachain is able to be set up and customize the block size (transaction limit), block time (transaction speed), number of validator nodes, block reward token, block permission and so forth to satisfy and fulfill respective business needs. That being said, the fundamental structure such as Proof of Stake, validator nodes, block reward mechanics etc cannot be changed.

Examples:

1. The block size and block time of DEX Chain is larger and faster than f(x)Core for >50% to cater for exchange transactions’ needs, liquidation and funding rate settlement; (the transaction speed can be further enhanced)
2. The setting for block reward tokens and block reward calculation of the Payment Chain is different from f(x)Core (Payment chain has a ‘dual token’ structure) to satisfy a ‘loyalty point’ setup which is common in the payment industry and connected to XPOS and the upcoming Decentralized XPOS; (hardware integration enabled)

It is worth noting that the activity and transactions on each parachain is working in isolation. That being said, the transaction and event on DEX Chain will not consume the bandwidth of f(x)Core or Payment Chain, therefore the theoretical transaction throughput of the Function X network can go to infinity as there is no restriction on the number of parachains that can be integrated.

The comparison

To return back to the question mentioned above, what are the obstacles to maximizing the transaction speed?

The short answer is, at what cost?

Performance, decentralization and risk are tradeoffs and always come at a cost. The high transaction speed of DEX Chain is at the cost of fewer validators with higher hardware specifications; the dual token structure in Payment Chain is at the cost of higher bridging costs. We definitely do not want to sacrifice decentralization and security for the sake of enhancing the transaction speed, especially under certain contexts and for certain businesses.

We do see the trading on DEX will require milliseconds speed and we are willing to pay the cost, however, we do not see the wait of 3–5 seconds payment processing time costing us much discomfort unless you are in a hurry to drink your coffee — and risk burning your tongue.

Function X might not be the fastest, easiest, cheapest, lightest solution in general but the unique point of difference is it allows business owners to customize and expand in order to fit their respective business needs while, at the same time, balancing the cost.