Why we picked Stellar over Ethereum for Kava Coin
Kava is revolutionizing loyalty programs for video game producers with the launch of Kava Coin (Symbol:KAVA). Players earn Kava Coins for simply playing our highly rated game titled CasinoLife Poker available on Apple, Android and Facebook app stores.
We spent a significant amount of research effort in evaluating Ethereum as a potential technology platform. Ethereum’s Smart Contracts feature was particularly interesting making it a leading candidate for our evaluation. We built a prototype implementing an ERC20 based loyalty program where players were rewarded with Kava Coins, our cryptocurrency tokens, for participating in our ecosystem. Fortunately for us, four major developments occurred in the Ethereum cryptoverse during our evaluation period in January 2018.
The first one was the rapid rise in the popularity of Ethereum as a currency. The meteoric rise in value of Ethereum directly impacted the cost of “gas” or the price per transaction. In January 2018 the average transaction cost for an Ethereum transaction was an astounding $4.15.
The rapid rise of Ethereum as a preferred platform for thousands of Initial Currency Offerings (ICOs) and for building distributed “dApps” applications drove these transaction processing times to rise dramatically. Due to the underlying architecture of Ethereum, the network is limited to processing 10–15 transactions per second. The average transaction time in January 2017 was about 15 seconds. On busy ICO days a transaction fueled with nominal “gas” could wait minutes and hours for processing. Popularity of games such as Cryptokitties further accentuated the scaling problems of Ethereum. In December 2017, 13% of all transactions on the Ethereum network were attributed to Cryptokitties trades.
Finally, the crypto world was abuzz with several scams and social engineering hacks that led to many notable thefts for companies choosing to launch their tokens on the Ethereum network. We did note that none of these high profile heists were attributable to the core technology stack. Lapses in the authoring of smart contracts or other non-crypto exploits surrounding the token launch event were usually responsible for these heists.
Loyalty programs by their nature are simple microtransactions. Customers receiving loyalty rewards expect instant gratification of the rewards. High transaction costs, latency and the complexity of Ethereum led us to research other solutions such as Neo, Tron, Waves and Stellar.
Stellar’s feature set and long term vision addressed all our requirements and concerns making it an easy decision for us to build our player loyalty rewards program on the Stellar network.
Transactions on Stellar execute within 3–5s and are fixed at 0.00001 XLM per transaction. As of April 19, 2018 a single transaction on Stellar costs $0.0000036 or 280,000 transactions per 1 USD!
Another plus of Stellar is that transactions are not subject to bidding as they are in the Ethereum or Bitcoin protocols.
Stellar has a simple token authoring environment limiting the degrees of freedom in implementing business logic in the token definition. In our opinion this is a positive given the simplicity of our use case and our preference for de-coupling the business logic from the token definition.
Stellar’s Consensus Protocol is in stark contrast to that of Ethereum and Bitcoin’s Proof of Work algorithms. Becoming a participant in the Stellar Consensus Protocol requires far less computing and financial investment than becoming a Ethereum or Bitcoin miner making it feasible for new participants to join the network. Submitting transactions and interacting with the Stellar network just requires internet access and does not require Stellar or other participants to download a full blockchain or maintain a node.
Stellar has a vibrant and rapidly growing community that continues to influence it’s roadmap. We were pleasantly surprised when we learned about Stellar’s efforts of evangelizing the technology. They have some amazing employees who are super helpful and generous with their time and resources to help and guide companies looking to launch their tokens on their network.
With the leadership at Stellar and the support of companies such as IBM, Stripe, Khosla Ventures and others, Stellar appears to be in great hands and well poised for growing it’s network of anchors, partners and token launches.
Our journey over the last few months for launching Kava Coin on the Stellar network has been quite uneventful barring some minor hiccups. Our confidence in Stellar as our core crypto stack continues to grow as we get closer to our full launch in late April.
