PART 1: What is GLITCH?

Glitch
Glitch Finance
Published in
6 min readJan 2, 2021

Banks are losing the monopoly on money and capital flow they’ve enjoyed for decades. While fintech is increasingly eating into the banks’ profit margins, crypto is gaining momentum and opening the door to not only new financial applications but an entirely better model.

Welcome to the post-fintech revolution

It’s becoming easier than ever to imagine a bankless future. Soon, everyone from retail investors to multinational corporations will be able to control their own finances. In this sense, decentralization spells financial sovereignty, and marks the end for the rent-seekers, middlemen, and gatekeepers of legacy finance.

Empowered by blockchain technology, decentralized finance protocols have unlocked a world of new economic possibilities. Currently, millions of people worldwide are using the Ethereum blockchain to build and participate in a new code-powered economic system. This system is setting new standards for financial access, opportunity, and trust.

This new decentralized economy will be built on a foundation consisting of various protocol layer blockchain platforms. And today, we have a unique opportunity to witness the formation of this layer. There’s just one catch.

As more complex financial systems get built on top of blockchains, infrastructure will become an ever more critical bottleneck. To date, not a single blockchain platform has met all requisites to act as a backbone for a sustainable, global decentralized economy.

Each chain offers various solutions but also presents some challenges and limitations — issues like Ethereum’s scalability, EOS’ consensus collusion, Holochain’s interoperability, etc. More than that, each chain is designed for broad utility while neglecting specific uses. The upshot of this is that, while it has enjoyed significant growth, DeFi struggles to scale, mainly due to the congestion on the Ethereum network, making gas prices sky-rocket, and pushing the entry higher and higher.

The missing protocol

What if there was a protocol built specifically for decentralized finance? What if that protocol had no extra features and no congestion from nonproductive applications? And better still, what if that protocol was blockchain agnostic, enabling a standardized user experience and seamless cross-chain interoperability?

Enter GLITCH

A blockchain-agnostic super protocol designed to facilitate trustless money markets. Built from the ground up, GLITCH is the world’s first for-purpose DeFi smart contract platform constructed to support a global alternative to the traditional financial system.

Led by a team of seasoned blockchain professionals and prominent advisors, the GLITCH protocol offers high transaction throughput, near-zero transaction fees, and a profit-sharing model that rewards investors, dApp developers, and end-users. It’s a new breed of DeFi “Operating Software” (OS) that improves upon the best of existing chains.

GLITCH is similar to Avalanche in that dApps can be launched on their own custom side-chains (with variable parameters and arbitrary operating logic), but differs in the fact that Avalanche is built around a directed acyclic graph (DAG) — while GLITCH is a pure blockchain, capable of maintaining tens of thousands of transactions per second, without the centralization risks that come with DAG-based platforms.

GLITCH eliminates the need for KYC, both trust and permission, and the bloat and expensive fee structure of other blockchain platforms. GLITCH also plans to incorporate token wrapping bridges, where dApps can be run with low fees, all in service of GLITCH’s ultimate goal: to become the global financial rail.

Main benefits and technical details

Crypto has an urgent need for a scalable blockchain OS to support decentralized financial activity. Such a system must handle millions of active users without compromising the quality of its user experience.

While GLITCH draws on technical advances made by existing blockchains, it stands out by offering scalability from layer one, a unique token wrapping feature, and a community dividend model.

Consensus mechanism

GLITCH approaches scalability from layer one to deliver low-latency, high throughput transaction processing. The seamlessness of layer one scaling makes GLITCH functionally competitive with traditional financial systems in the near term.

To this end, GLITCH uses delegated proof-of-stake (DPOS) to reach consensus on the network. DPoS is widely recognized for its ability to scale up to the transaction speed required to support mainstream use.

A DPoS-based blockchain operates a voting system where stakeholders outsource the process of securing the network to a third-party. For GLITCH, these third parties are referred to as ‘block producers’ — individuals who, one at a time, are authorized to create a new block every 0.5 seconds and are limited by Byzantine Fault Tolerance (BFT) from signing blocks on multiple forks. In the event that there is a fork in the GLITCH blockchain, consensus will automatically change to whichever chain is the longest.

Notably, GLITCH does not allow block producers to be chosen by a vote. Rather, a carousel system gives each stakeholder an equal chance to produce a block. This ensures fair governance and prevents a small group of bad actors from hijacking the network.

Profit-sharing vault

The vault is a profit-sharing mechanism hardwired into the GLITCH protocol. It works by automatically depositing 20% of all network fees and dApp revenue into a vault stored immutably on the blockchain. Funds in the vault are distributed to all GLITCH stakers that support the network.

This model does two things. First, it fosters community support for GLITCH dApps by giving GLCH holders financial incentives to help developers generate revenue.

Second, it creates a positive feedback loop wherein developers can count on community support, and holders are rewarded with additional tokens that can then be spent across the GLITCH network of dApps. In combination, these are powerful incentives intended to drive user and developer growth.

Token wrapping

The ERC20 token on the Ethereum network is being replaced by the new GLITCH-coin: GRC20, which operates on the GLITCH blockchain. The primary advantage of this change is that users will be able to avoid the high transaction fees common to the Ethereum network.

In practice, the process is simple. Users who have ERC20 tokens in their Ethereum accounts register their Ethereum addresses with GLITCH. This ensures that the balance is mirrored in a new GLITCH-coin balance when the system creates an initial blockchain snapshot.

In the future, there will be token wrapping functionality that allows users to integrate other blockchains in the GLITCH blockchain using a cross-chain bridge. The advantage here is that wrapped token users get an equal amount of value “wrapped up” in an asset that’s more easily mobilized by dApps.

Developers can launch their own bridge contracts on GLITCH sidechains. These smart contracts are identical to the original ERC20 smart contracts but instead operate on the massively scalable GLITCH blockchain. This makes porting dApps to GLITCH a simple, cost-effective process that doesn’t change the way it operates.

By deploying smart contracts of widely used ERC20 tokens on the GLITCH blockchain, developers can simulate products and dApps without any of the network congestion issues. As a result, users gain exposure to a wide range of assets through GLITCH without the slow transaction speeds or high gas fees and settlement back into ETH is automated through audited smart contracts.

For instance, take token ‘XYZ’ on Ethereum, a dApp developer could define a smart contract on GLITCH as gXYZ. The GRC20 version would match the original supply and distribution. Once the dApp developer has successfully deployed the smart contract on GLITCH’s blockchain, XYZ holders can migrate their tokens to gXYZ, and vice versa.

To a decentralized future

GLITCH was born out of a simple idea. For decentralized finance to meet its full potential, it needs a dedicated system — one that’s easy to use, scalable and capable of uniting an entire ecosystem of dApps.

That’s the rationale for building GLITCH. And we believe Glitch’s precision defined operating system and scalable network can make the necessary leap to challenge the dominance of traditional, centralized financial markets.

Learn More

Twitter: https://twitter.com/GlitchProtocol

Telegram: https://t.me/glitchprotocol

Telegram ANN: https://t.me/glitchprotocolANN

GLITCH Whitepaper: https://glitch.finance/Glitch-whitepaper-2020.pdf

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