Idena community report: Current state and next steps
Idena is an open source project started in October 2018 by an anonymous group of like-minded engineers and computer scientists who stand for the human right to share information and exchange value freely and privately.
The Idena blockchain is driven by proof-of-person consensus with every node linked to a cryptoidentity, one single person with equal voting power. It suggests a novel way to formalize people on the Internet: Idena proves the humanness and uniqueness of its participants without collecting personally identifiable information by running a Turing test at the same time globally (read more about the Idena technology here).
This is our first community report, a look at the progress made during the first year and the planned next steps.
1. Bootstrapping the Idena project
Premint, funding and vesting
The Idena blockchain has got a premint intended to be used to bootstrap core development, raise funds, and help spread the word. The Idena core team would like to cultivate such an ecosystem where the market value of Idena coin (iDNA) is driven by the fundamental demand for its utility: Advertisers will have to purchase iDNA on a market and burn the coins to compete for the network attention. Burning both preminted and minted coins will lead to the sustainable economics of the Idena network. (Read more about the onchain advertising in the Next steps section below).
Total premint size: 36,000,000 iDNA
- Core team allocation: 17,250,000 iDNA
- Early investors allocation: 7,065,000 iDNA
- Ambassadors fund: 365,000 iDNA
- Reserved for 2020 runway funding: 3,000,000 iDNA
- Reserved for 2021–2022 runway funding: 8,320,000 iDNA
To protect the market price, premined coins of the core team and early investors are to be vested as follows (vesting starts from August 31, 2019):
Core team fund:
- 1/3 vested for 3 years: 5,750,000 iDNA
- 1/3 vested for 5 years: 5,750,000 iDNA
Early investors (vesting starts from August 31, 2019):
- 1/3 vested for 1 year: 2,355,000 iDNA
- 1/3 vested for 2 years: 2,355,000 iDNA
The Idena blockchain does not support time lock addresses. Vested coins are to be allocated at known addresses.
Foundation wallet (DAO)
The Foundation wallet is designed to fund Idena community-driven development and Idena marketing campaigns. It accumulates 5% of the minting and rewards for invites issued by the core team.
The core team controls the foundation wallet in a centralized way until governance mechanisms are proposed and implemented in the form of a fork.
Wallet address: 0xcbb98843270812eeCE07BFb82d26b4881a33aA9
Current wallet balance*: 521,526 iDNA
Zero wallet (DAO)
The zero wallet is designed to fund impact projects proposed by the Idena community. It accumulates 1% of all minted coins.
Currently the wallet address is locked. There is no private key for the zero wallet address: The network must reach consensus in order to spend the funds. Governance mechanisms for zero wallet fund allocation are to be established in the future.
Wallet address: 0x0000000000000000000000000000000000000000
Current wallet balance*: 91,680 iDNA
*as of Feb 26, 2020, Epoch: #0037
2. Current state
Idena mainnet status
Idena development started in October 2018. The testnet has been running since August, 2019.
The initially planned milestone for Idena in 2020 was the coin listing in Q3 2020 coupled with the mainnet announcement. However, in February 2020 the iDNA coin was listed by qTrade, a U.S.-based digital asset exchange, at the initiative of the exchange without a listing fee.
Effectively, since then Idena runs a mainnet: No network swaps or changes of the state of balances could now be executed without consequences for the community.
We propose to call this network an experimental mainnet. Active development is well underway, with frequent updates and hard forks. So, running the Idena software is at users’ own risk and rewarded by excessive early mining.
(as of Feb 26, 2020, Epoch: #0037)
In total there have been 37 epochs since the Idena blockchain started. At the beginning we used to have hard fork updates, where the state of the nodes was reset to the 000000 genesis block number. The epoch number was also reset to #0000 with every new hard fork update. Historical data is available in the blockchain explorer, starting with the block number 181001.
Validated identities: 597
Flips created and solved: 13,513
As of 26 February 2020, there are in total more than 48,700,000 iDNA minted. Over 675,000 iDNA were permanently burned, 1,138,000 iDNA are staked by validators, 521,526 iDNA are accumulated at the foundation wallet, 91,680 iDNA are frozen in the zero wallet.
Circulating supply (total supply minus preminted, staked and reserved coins) was around 10,948,800 iDNA at the time of writing this report.
iDNA wealth distribution is quite concentrated, since the initial premint was not publicly offered to many investors. With ongoing minting, wider coin distribution, and burning coins for ads, we expect that the concentration will diminish over time.
3. Next steps
Onchain advertising as a fundamental demand driver
The Internet is driven by advertising. We suggest changing the advertising industry by turning the concept of targeting upside down.
Terabytes of sensitive personal data of Internet users are collected for better targeting of ads while putting people in a vulnerable position in case of data leakage. We would like to radically change the situation by proposing a model of a transparent advertiser where any advertisement contains an accessible targeting specification. We want advertisers (not users!) to disclose information about their target audience, and then each user’s device can decide on a particular advertisement that suits them at the moment, without revealing their personal data. We call it self-targeting.
The user’s device knows their current location, interests, gender, age, language, and more. All of these can be independently and automatically used to filter ads. We want the user to get the entire list of available advertisements, and it is the user (and not intermediaries such as search engines or social media platforms) who will have the right to choose what fits best.
Usually advertising is imposed on users by free Internet services and thus is often considered by viewers as something undesirable. If the logic is on the client side, why should customers not get rid of advertising completely? Why not just ignore or disable the ads?
While in traditional media it is the intermediaries who benefit from ads delivery, onchain advertising leads to a model without intermediaries, in which the advertiser pays directly to the protocol, burning coins purchased on the market and thus distributing profits to all the network participants.
Any coin owner is interested in advertisers to continue competing for their attention, creating a fundamental demand for iDNA in the market. Therefore, by viewing advertisements with the highest burn rate and highest relevance users monetize their attention indirectly through creation of the long term demand for iDNA coins.
Advertisers compete for the audience within the categories they are interested in: location, interests, gender, age, etc. If an advertiser is targeting users in China, for example, they will be on the burn-rate with other advertisers targeting the same location. As a result of such competition, the price for advertising in this category may increase. In the meantime, the price for advertising in other locations will remain at a lower level.
Idena has an ambitious roadmap (see the Roadmap section below). To extend the development till the end of 2020, we plan to offer additional 3,000,000 iDNA to private investors. A limited amount of the coins may also be available via exchanges or over the website at premium to market price.
After closing the round, the remaining 8,320,000 iDNA will be reserved for future investors. We plan to have another round of fundraising in early 2021 to cover the next two years of development.
Long term funding strategy
Over the longer term, we envision a sustainable self-funded community-driven development of the Idena blockchain with the use of governance mechanisms.
Currently 5% of the minting is allocated in the foundation wallet. The core team controls the foundation wallet in a centralized way until a governance mechanism is proposed and implemented in the form of a fork. The foundation wallet is used to pay for marketing and support community-driven development of the Idena blockchain.
We are open to testing proper governance mechanisms for development based on principles listed in the Idena governance principles section below.
We do not plan to proactively look for new exchanges to list the iDNA coin in the near future. However, we will be happy to support listing initiatives from exchanges and provide the required support and guidance for the Idena node integration.
The development of the Idena blockchain is still in progress: Idena has an ambitious roadmap for the next few years.
An onchain auction for advertisers to compete for ad space could be one of the major utilities of the iDNA coin. Advertisers publicly specify their target audience and burn coins, competing with each other in an onchain real-time auction to get the attention of Idena users. Users consume relevant ads with the highest burn rate. No personal data needs to be shared: Users can configure their self-targeting parameters.
A mobile Idena app is essential for mass adoption. Idena users will be able to create and solve flips and send payments and messages anytime, anywhere. Pairing with a node running on a home computer or VPS will allow node discovery using the libp2p protocol.
We have developed the mobile version of the Idena node to be run on a mobile device, both on iOS and Android. However, it is not practical to run the node on a regular mobile phone during the day because of the battery and mobile data bandwidth consumption. We have temporarily postponed this development, but in the future we plan to return to it in order to provide mobile mining on smartphones.
Sign-In with Idena
Idena’s cryptoidentity can be used for authentication by a centralized service or website. Depending on the cryptoidentity status or its total score, the centralized service can grant certain privileges to the owner of the cryptoidentity.
Sharding is fragmenting the network into interconnected parts, or shards, processing transactions in sub-chains independently increasing the total throughput. However, sharding degrades security of a blockchain proportionally to the number of shards in line with well-known blockchain scalability trilemma.
A proof-of-person blockchain enables sharding to address the scalability problem: The more people join the mining, the higher throughput it can provide with the same level of security.
Idena provides a secure way to run multiple sub-chains driven by different sets of independent participants: One person cannot validate multiple shards. The more unique people are validated in the network, the more shards can be established without compromising security.
Idena’s strong Sybil-protected identity enables online governance based on “one person — one vote” principle as well as quadratic voting that allows voters to express the degree of their preferences, rather than just the direction of their preferences.
The Idena network will have various types of internal governance mechanisms: network improvement proposals (soft forks); network upgrade proposals (hard forks); global fund proposals, and allocations. Since it is a very challenging goal, we are looking for the best governance design and are open to new ideas.
Light smart contracts
Smart contracts are an integral part of modern blockchains. We are committed to ensuring that the Idena node works on an average laptop and are currently exploring an option of building light smart contracts with dynamic state loading which will not require powerful hardware to execute smart contracts and permanently store their state on every node.
For most use cases, smart contracts and DAOs need to be fed with factual information from the outside world. This requires oracles to supply offchain data to the blockchain. In Idena, there will be mechanisms that enable every validated Idena user to have an equal chance of being selected as an oracle. Randomly chosen participants will receive information requests published by smart contracts. The selected oracles will provide the data and stake coins to guarantee its accuracy. When the consensus on the information is reached, oracles will be rewarded or penalized depending on the quality of the information they provided.
Decentralized autonomous organizations (DAOs) based on the principle of one person — one vote is the next step to empower people in realizing their dream projects. Smart contracts and oracles will allow building custom DAOs on the Idena blockchain.
A DAO showcase on the Idena blockchain is the Idena zero wallet. Governed by the protocol, the zero wallet fund may be used to match the funding for any project supported by the wide consensus of the Idena network.
Courts with a randomly selected jury are designed to resolve disputes. A jury may have a wide range of rights depending on its size (for instance, changing an identity status). There must be both a reward system for following the protocol and responsibility in case of violations.
Idena will become a delivery network for end-to-end encrypted messages with no server in the middle. This allows for pseudonymous communications with guaranteed delivery.
Technically, any blockchain with a high throughput could provide messages delivery. However, Idena can enable a seamless user experience: Users will be able to mine coins to pay message fees.
Convenient user interface will be implemented to transact iDNA between users as a special type of message inside the messenger.
Decentralized publishing platform
The Idena network can be used as a decentralized storage to build censorship-resistant publishing platforms, which are protected from bots manipulating content discovery and editorial governed by the community.
Staked-collateralized iDNA loans
Any Idena user will be able get a loan in iDNA guaranteed by their stake. If the debtor does not return the loan within the agreed period, the lender can recover the loan from the stake. In this case, the borrower loses their identity. The borrower who pledged their identity cannot arbitrarily terminate it.
Any validated Idena user can act as a iDNA mixer in the network using the loan mechanism, with their stake serving as collateral. The user collects loans of a standard size and then sends the loans to the addresses indicated off the chain. Even a small stake will enable a user to perform the function of a mixer if frequency of payments is high.
DEX, stablecoin and digital assets
Using the Idena network smart contracts, we envision the implementation of onchain DEX (decentralized exchange) functionality with micro-custodial gateways to major public blockchains (Bitcoin, Ethereum), digital assets (ownership tokens), and a collateralized stablecoin.
5. Idena governance principles
We are looking for the best governance design and are open to new ideas. At the end, we would like to have governance mechanisms for the blockchain development fully driven by the community and co-funded by the Idena protocol.
Here are the basic principles for the Idena blockchain development governance that we would like to propose:
- Anyone can make an Idena improvement proposal (IDIP) onchain.
- Every proposal must be vouched by supporters.
- The supporters will get rewards once the proposal is accepted by the network. Otherwise, the supporters might get penalties.
- Randomly selected committees should vote for the proposal to be accepted.
- Committee members should be rewarded if they vote in conformity with the majority. Committee members are not publicly known before they vote, to avoid collusion.
- Once the IDIP is accepted, anyone can contribute to code development and testing and be paid for that work.
- Contributors can bid their price in the auction to find the best match and be rewarded.
- The reward fund must be filled by the community and matched by the Idena protocol (source of funds: the Idena foundation wallet) based on quadratic funding principles.
- Anyone can review the code and vote for it. A proposed implementation must be vouched for and accepted on the same principles as IDIP selection.
- The source code and committed changes should be stored in the Idena IPFS.
- A decentralized node compilation: Every node running a client-side compiler can build a candidate version of the node according to the IDIP and the source codes accepted by the network.
- A new candidate version of the node can be run in parallel with the mainnet to enable a wide majority of the network members to try it out before making a hard fork.
- A hard fork is to be activated by the majority of validated identities.
- Rewards should be paid to supporters, developers, and testers.
We thank the Idena community for their honest feedback and insightful discussions! There are already more than three thousand community members; and every voice has a right to be heard.