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Infrastructure for Privacy-Preserving Computation and Distribution Platon (LAT) Market Analysis

Source: CoinMarketCap

I. Introduction

Platon is expected to launch the main network in late April to early May 2021.

Platon is a privacy-preserving computation and distributed economy infrastructure (public chain) based on blockchains and cryptography technologies. It aims to promote the trading of data while protecting data ownership and privacy, and to establish data and computation markets based on blockchains.

In general, Platon is a privacy-preserving computation and business-based public chain. The core founders Xiao Feng, chairman of the Wanxiang Blockchain, Sun Lilin, founder of Matrix Elements, and Zou Chuanwei, former Chief Economist of Bitmain.

In addition, Vitalik, the founder of Ethereum, is the chief scientist of Wanxiang Block Chain Labs. Liang Xinjun, co-founder and former president of Fosun Group, is the chief consultant of LatticeX, Platon’s parent company.

In addition to the background of the management and team, this project is mainly interpreted from Platon Whitepaper and Redpaper.

II. Technical Information

All public chains cannot bypass the issues of de-centralization, efficient scalability, and security.

In terms of the consensus mechanism, Platon abandons the Bitcoin and Ethereum PoW Proof-of-Work mechanism, and also does not directly use the PoS Proof-of-Stake and DPoS Delegated Proof-of-Stake consensus mechanism, but introduced PPoS instead.

Platon believes that there are 2 core problems in the above consensus mechanisms, namely, the waste of computing power and the centralization of computing power.

The consensus cost is the sum of the technical cost and systemic cost. Therefore, there is an optimal ratio between the 2 dependant factors, in order to minimize the consensus cost.

Platon’s PoS consensus mechanism uses a verifiable computing scheme, in which the consensus is separated from the computation, to ensure both efficiency and de-centralization.

In terms of efficiency, computation power is used only to perform calculations of actual trades, not for mining. The blocks packaged by consensus nodes directly contain trade results and proofs. Validation nodes are validated by cryptography, not by local replay of trades. To improve the efficiency of the consensus, Platon selects some nodes by election to participate in the consensus. Candidate nodes are weighted according to the calculated contribution value.

In terms of de-centralization, the probability that an alternative node will become a validation node depends not only on the number of votes it gets, but also on the randomness introduced by VRF. The final selected validation node is not necessarily the one with the highest number of votes.

In terms of security privacy, Platon uses cryptography technologies such as homomorphic encryption, secure multiparty computing, verifiable computing and zero-knowledge proof to encrypt and synchronize all information and data on the network. Its computational model decouples consensus from computations, extends computations off-chains, supports linear computational expansion, verifiable computations, and parallel computations.

In terms of data scalability, Platon introduces smart contracts to support access to data on- and off-chains. Smart contract calculations are compiled as Boolean circuits. The purpose of this is to split the calculations into smaller computing units, distribute them to different computing nodes, and implement parallel computing. The computing logic is executed in dedicated hardware.

III. Tokenomics

The specific Token distribution model for LAT is expected to be publicly available in the Platon Redpaper. This section focuses on the general distribution of LATs and whether they have unique application requirements.

LAT is divided into initial releases and following releases, with no limit on total releases. There is currently no public information on total and initial releases. According to the Platon Whitepaper, LAT will be distributed the founding team, Platon Foundation, academic fund, ecology fund, and private institutions in proportion to its initial circulation and will introduce appropriate locking schedules.

In the following LAT continuous release phases, which occurs during each run of PPoS, is distributed in a pre-determined proportion based on the previous year’s total issuance. Most of the block awards are used to validate the nodes, a small portion are allocated to the Staking awards for the selected nodes, and the rest are deposited in a trust fund to reward the Platon developer community, which is managed by the Platon Foundation. Within a few years after the launch of the main network, the Platon Foundation will manage the allocation of subsidy to selected nodes and trust funds of validation nodes, in which the subsidy will gradually decrease to 0 year by year.

Platon’s economic activity is divided into two layers, one is the operation of the public chain itself, the other is the public chain-based DApp, Layer 2 solutions and DeFi etc

The economic activity of the public chain itself can be understood through three stages of PPoS operation:

1. Alternate Nodes: When a LAT holder becomes a validation node, he or she must lock in more than the minimum amount of LATs previously determined in order to be candidates for the candidate nodes; the LAT holders can participate in PPoS votes by locking LAT, with one LAT representing one vote, which can be unlocked after the election.

2. Select validation nodes: VRF selects a certain number of validation nodes from all the candidate nodes. The higher the number of votes, the greater the probability of becoming a validation node. However, VRF introduces randomness, and the final selected validation node is not necessarily the node with the highest number of votes. This is the difference from the EOS super node election mechanism.

3. Validation nodes that rotate out of blocks and run the Byzantine protocol: each validation node is assigned a window to continuously generate blocks within the time frame, and the number of blocks generated within the time frame for each validation node is predetermined. Thereafter, all validation nodes run Concurrent Byzantine Fault Tolerant (CBFT) on candidate blocks until a consensus is reached.

Validation nodes and alternative nodes, as well as supporters, receive revenue at pre-agreed rates, while validation nodes receive additional trading fees.

Platon public chain design follows the principle of consensus on-chain and computation off-chain. Core computing takes place off-chain, and public chain nodes can verify trades without duplicating the computation. The major players (nodes) in the data and computing circulation market, including computing coordinators, data providers, and computing providers, can receive LAT awards.

Since Platon is a homogeneous multi-chain system, economic activities outside the public chain uses an economic coupling mechanism, such as DApp in Platon, which can issue its own tokens. However, DApp’s token must deposit LAT as a reserve in the smart contract.

In terms of collateral, Platon will support minting a stable asset with LAT as the collateral, but LAT is not the only option. In data and computing markets, some participants may prefer to settle in stablecoin rather than LAT.

Summary: The above is the main applications of LAT in the public chain economy itself and in the public chain multi-layer network. Its economic coupling purpose is to increase the rigid practical value of LAT.

IV. Financing Situation

At present, Platon has completed two rounds of $50 million public financing, with HashKey Capital, Youbi Capital jointly leading the first round, followed by Hash Global Capital, SNZ Capital, Fundamental Labs and other investment institutions participating as well.

The second round of financing amounted to $12 million, initiated by Liang Xinjun, and led by Alpine Capital and Hash Global Capital, and joined by OUE Group in Singapore, a well-known insurance management agency in Asia and other family offices.

V. Application Scenario Analysis of Platon

The practical scenarios for LAT come from:

1. Staking and voting when verifying nodes by node election
2. Cost of node operation
3. Rewards for stand-by and validation nodes
4. Miner trading fee rewards

The selling pressure of LAT comes from:

1. Unlocking or cash out by investment institutions
2. Possible unlocking or cash out by the team and foundation
3. Cash out of node rewards

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