Loom Network: Scaling Ethereum Through Sidechains

Paradigm
Paradigm
May 21 · 23 min read

Detailed review on the project

Table of Contents

Introduction

Technology

Consensus

Loom Network Is Now Running 3 Sidechains in Production

1. GameChain: A Highly-Performant Sidechain Optimized for Interactive Mobile Games

2. SocialChain: A Sidechain Optimized for Social Applications

3. PlasmaChain: A Plasma Cash-backed Hub for Transacting Between Sidechains and Ethereum Mainnet

How PlasmaChain Works

Team

Partnerships

Use case

Social metrics

Markets and volume

TA

Competitors

Roadmap

Token Mechanics

Token Metrics

Summary

Introduction

Loom Network is a PaaS (Platform as a Service) that allows Ethereum based Solidity applications to be run on main chain and on private, and semi public chains. The goal is to allow app developers to have smart contracts that can access more computing power when necessary, or the same computing at lower costs for tasks like free trials for onboarding new users or applications that don’t need the full security of the blockchain.

Technology

Consensus

Loom SDK has 2 layers of consensus. One at the P2P layer.

Loom Backend supports different BPFT engines, like Tendermint. In future we will support Raft for PoA chains.

Loom Consensus layer supports Loom DPoS or a configurable PoS/DPoS contract per Chain. Once Casper becomes available they will add support for this

Source

LOOM Delegated Proof of Stake

The delegated proof of stake algorithm allows token holders to elect witnesses. Witnesses act as validators of the blockchain, proposing blocks and verifying that transactions are correct. These witnesses serve a standard term length before being subject to elections again.

Candidate Registration

All candidates must register by specifying the public key matching their address.

Voting

Each coin account has up to a specified number of votes, generally equal to the number of witnesses. However, the power of each vote is proportional to the balance of coins the account holds. This ensures that accounts with more at stake have a greater voice in how the network is run. In the current implementation votes do not expire. This means that unless a vote is explicitly changed it is assumed that the account holder is satisfied with the job of the witness and will receive the account holder’s vote again in the next election. Unlike traditional elections, voting can be done any time so there is no “election day”, however votes are not counted until the election time.

Proxying Votes

In addition to voting directly for witness candidates, accounts can also proxy their vote to a trusted party. This means the proxy ends up with a vote power proportional to proxy balance + sum(balance of principals).

Elections

Any account can trigger an election if enough time has passed by sending a transaction to the network. Witnesses are elected by summing up the total voting power given to them and taking the top N candidates where N is the witness count specified in the initial parameters. This means that all witnesses end up with an equal chance of proposing a block no matter how many votes they received. If the minimum number of power required specified by the minimum power fraction is not reached then the witness set does not change.

Future Improvements

Bonding

In the future witnesses may lock up a specified number of coins that can be seized for bad behavior. This adds an additional incentive for good behavior beyond the witness salary.

Proof of Authority

Right now candidates do not have to proof their identity, but in the future it may be useful to enable on-chain notarization to verify candidates’ identities.

Alternating Election Cycle

Currently all witnesses are up for reelection at every election. It may be better to have an election cycle that differs from the term length.

Vote Expiration

Currently votes never expire, however, one can imagine a scenario in which votes expire after a certain time period. This would prevent lost or stolen accounts from having undue influence in elections. This can be done either by looking at the time the vote was cast or by looking at the last activity on the account.

Source

Loom Network Is Now Running 3 Sidechains in Production

1. GameChain: A Highly-Performant Sidechain Optimized for Interactive Mobile Games

GameChain is the chain that they’re currently using to run the Zombie Battleground. This chain is actually a sidechain to PlasmaChain, and doesn’t connect directly to Ethereum mainnet. This is because doing so allows users to earn new cards through playing, and trade them on the marketplace instantly, without needing to pay gas fees.

Users can choose to transfer their cards off PlasmaChain onto Ethereum mainnet whenever they want to, but having the PlasmaChain layer in between allows to provide a much better (and free) user experience — which is an ESSENTIAL step if Loom wants to onboard millions of new users into the crypto universe.

So what happens on GameChain itself? While the cards themselves are stored on PlasmaChain, GameChain is where everything else in the game takes place. Matchmaking, tournaments, ladders and player rankings, the individual moves in the matches themselves, and everything else that would traditionally happen on a backend web server happens on GameChain.

In the future, they will open up this chain to third-party game developers to deploy their games on, making it a dedicated sidechain for high performance mobile and PC games.

2. SocialChain: A Sidechain Optimized for Social Applications

SocialChain is the chain Loom is currently using to run DelegateCall. It was the very first sidechain Loom team has built, and is also their longest-running sidechain — in production since March 2018.

On DelegateCall, users can earn ERC20 tokens for their contributions (instead of useless karma points), which they can then withdraw to Ethereum mainnet. Loom detailed its infrastructure in this post.

In the future, they plan to open up SocialChain to other social network DApps that share similar feature requirements. (ERC20-based karma, sybil resistance, reputation-based transaction limiting, and so on).

Having dedicated chains tailored to particular kinds of applications allows us to optimize each chain for those types of DApps — whereas on Ethereum mainnet, you might have someone sending a Tweet competing in gas fees with someone sending a million dollars.

3. PlasmaChain: A Plasma Cash-backed Hub for Transacting Between Sidechains and Ethereum Mainnet

At first, ZombieChain was announced as “An EOS-like DPoS sidechain for Ethereum DApps.” Since that announcement, ZombieChain has evolved considerably. What happened is, Loom started building the marketplace for Zombie Battleground on top of ZombieChain — and as their feature list grew, they realized this chain had potential to become something much larger than originally intended. So it was decided to upgrade this chain to have it play an even more important role in the future of Loom’s vision: It’s going to become a central hub for token transactions, linked to Ethereum by Plasma Cash. Think of it like a bridge to Ethereum mainnet with a built-in Decentralized Exchange (DEX), that other sidechains can use for faster and cheaper transactions without ever touching mainnet. Such an important role demands an important name. Thus, Loom have decided to rebrand ZombieChain to “PlasmaChain.”

Here are some of the features that will be built into PlasmaChain:

  • Plasma Cash link to mainnet for native ETH, ERC20, and NFT (ERC721) support
  • Built-in DEX / marketplace functionality
  • Native payments in ETH and LOOM
  • Plans to integrate BTC payments in the future
  • Plans to enable Plasma Cash links to “Layer 3” chains, with PlasmaChain as the parent chain. (Think “sidechains of sidechains”, in which PlasmaChain is the clearinghouse that enables trading of tokens between multiple sidechains without hitting mainnet.)

Loom will also be deploying multiple testnets in the near future, which they will open to third parties to deploy their DApps. These testnets may later evolve to become their own specialized production chains. But in the meantime, they’ll help Loom test third-party DApps and experiment with new features to eventually incorporate into the production PlasmaChain.

As the central hub that acts as a bridge between multiple sidechains and Ethereum, PlasmaChain will be one of the most important pieces in Loom’s vision moving forward.

PlasmaChain: A Plasma Cash-backed Layer 2 hub that other sidechains can transact on more quickly and cheaply than Ethereum mainnet.

Source

Universal Transaction Signing in 3 Steps:

  1. First — PlasmaChain has been upgraded to be “multilingual” — meaning: it now has the ability to detect how a message is signed and use the appropriate elliptic curve to derive the correct identity. Plus, validators can vote to trust additional Layer 1s.
  2. Second — PlasmaChain contains a decentralized registry of wallet addresses that belong to the same user. So if a user can prove their identity using a Layer 1 wallet — it’s also sufficient proof on Layer 2.
  3. Finally — PlasmaChain and loom-js as special compatibility features that allow developers to sign universal transactions without having to change a single line of code in their dapp.

Source

How PlasmaChain Works

  • Depositing ERC20 Loom tokens into PlasmaChain Contract on Ethereum Mainnet:

As validation will be taking place on Loom Network’s PlasmaChain, ERC20 Loom tokens has to be transferred from the Ethereum Mainnet onto the PlasmaChain (which is based on Tendermint) before you can vote and delegate. As such, you will be required to create a Tendermint account and map it with an existing Ethereum address via Loom Network’s PlasmaChain Dashboard which will be launching soon.

The PlasmaChain Contract serves as a gatekeeper to ensure that the right amount of Loom tokens are available for delegators to utilize on the PlasmaChain.

  • Transfer Gateway picks up deposit event and pushes instruction for Coin Contract to mint Loom tokens on PlasmaChain:

A deposit event will be emitted after ERC20 Loom tokens are deposited into the PlasmaChain Contract. The Transfer Gateway Oracle will pick up the deposit event and push new instructions for the Coin Contract to mint the exact amount of ERC20 Loom tokens that have been deposited into the PlasmaChain Contract. These Plasma Loom tokens will be stored in the Tendermint account you created through Loom Network’s PlasmaChain Dashboard.

  • Delegators interacting with DPOS contract on PlasmaChain to delegate with a validator:

Through Loom Network’s PlasmaChain Dashboard, delegators will be able to search for the list of validator nodes and select their choice of validator. Once confirmed on the amount of Plasma Loom tokens to delegate and the delegation period, the delegate will query the Coin Contract to approve the desired delegate amount for use by the DPoS contract.

The delegator will be required to sign twice — firstly, to allow the DPoS contract to deduct Plasma Looms from your wallet on the Coin Contract; secondly, to allow the DPoS contract to transfer the stated amount of Plasma Loom tokens from your wallet to the validator’s address. Once the transactions goes through, you will be officially delegating and playing your part to bootstrap Loom Network’s PlasmaChain!

Source

Team

According to the Loom Network website, there are more than 50 members in the team.

Matthew Campbell — CEO & Cofounder

Experience:

  • Hyperworks Inc — Principal. Dates Employed: Sep 2006 — Present
  • DigitalOcean — GO Hacker. Dates Employed: Aug 2015 — May 2017
  • Thomson Reuters — Instant Messaging Server Architect. Dates Employed: Mar 2012 — Jul 2015. Eikon Messenger, top rate Financial Messenger. Wrote a ton of the Frontend in Coffeescript, Backbone and Rails. Currently rewriting Sip Backend in GoLang.
  • Errplane — Engine Mechanic & Co-Founder. Dates Employed: May 2012 — Sep 2012. Founded a new startup on making DevOps as simple as one click.

Education:

  • Georgia State University. Dates attended or expected graduation 2004–2007.

Luke Zhang — Co-Founder

Experience:

  • BlockMason Inc. — Lead Developer. Dates Employed: Nov 2016 — Oct 2017.
  • Elemica — Developer. Dates Employed: Jul 2014 — Jun 2016. Scala, Clojure, Javascript MVVM (knockoutJS, AngularJS), CSS3, HTML5, D3JS.
  • Workopolis — Developer. Dates Employed: Apr 2013 — Apr 2015. Front end developer. Html, css, javascript. Part of the UX team.
  • Shifthub — Prototyping. Dates Employed: Sep 2012 — Jan 2013. Specialize in rapid prototyping interfaces. Iterative design with testable MVPs at each stage.

Education:

  • York University — Bachelor of administrative studies. Field Of Study — Marketing. Dates attended or expected graduation 2009–2012. Specialized in marketing with digital media.

James Martin Duffy — Co-Founder

Experience:

  • Auragin — Founder. Dates Employed: Apr 2013 — Present. Built an herbal supplement brand from zero to 7-figures revenue within 3 years.
  • Cryptocurrency Trading Bot — Developer. Dates Employed: Jul 2017 — Dec 2017. After being invested in bitcoin since 2013, James took an interest in Ethereum and the explosion in the number of cryptocurrencies. After examining the markets, he discovered an arbitrage strategy for consistently making profitable trades with very low risk. So he wrote a bot that executes this strategy on autopilot. The bot was consistently profitable for a number of months independent of the rise in value of cryptocurrencies. But eventually he shut it down in order to focus all his efforts on Loom, due to counterparty risk and its need to be monitored daily.
  • KoreaJobFinder.com — Founder. Dates Employed: Apr 2012 — Aug 2015. KoreaJobFinder was one of the largest English-speaking job portals in Korea. James developed the site on top of Wordpress, and had it ranking in the top 3 in Google for its primary keywords for years. In 2015 he shut it down in order to focus on Auragin.
  • Casual Steps Inc. — Lead Developer. Dates Employed: Sep 2013 — Feb 2015. James was lead dev of a team that built an ecommerce platform which allowed Korean customers to buy fashion products directly from US merchants, avoiding the markups charged by importers and local distributors.

Education:

  • Virginia Tech. Degree Name — Bachelor of Science (B.S.) Field Of Study — Mathematics. Dates attended or expected graduation: 2004–2008.

Michael Cullinan — Head of Business Development & Partnerships

Experience:

  • Canopy Innovations, Inc. — CEO. Dates Employed: Aug 2016 — Aug 2017
  • Thomson Reuters — Sr. Product Manager, Platform & Mobile. Dates Employed: Feb 2012 — Jun 2015
  • Skunkworks.vn — Product Manager. Dates Employed: 2010–2011
  • BNY ConvergEx — Connectivity Manager. Dates Employed: 2008–2009

Education:

  • Northeastern University. Degree Name — B.S. Business Administration (Management Info Systems & Entrepreneurship).
  • Northeastern University. Degree Name — M.S. International Affairs.

Georgios Konstantopoulos — Blockchain Scalability and Security Researcher specialized in the Ethereum platform.

Experienced in scalability and security research of applications in the domain of blockchain technology. Developing Plasma for scaling Ethereum via sidechains. Auditing smart contracts. Reading about applied cryptography.

Integrated Masters Degree in Electrical & Computer Engineering (specialization in Electronics & Computer Engineering) from Aristotle University of Thessaloniki. Also interested in information security, internet of things and autonomous vehicles. Dates Employed: Oct 2017 — Present.

- Leading a team of 5 engineers

- Currently researching applications of Ethereum’s Plasma in Loom Network DAppChains.

- Developed the first complete implementation of Plasma Cash compatible with Ether, ERC20 and ERC721 Tokens

- Authored a reference paper on Plasma Cash

- Writing technical articles

Parth Desai — Experienced Team Lead, Distributed Systems and Micro-services Architect

Framework or projects used: redis, tendermint, hashicorp vault, kubernetes. At Loom Parth is developing custom reactors in tendermint to enable distributed oracle and working on Loom Network’s DPoS sidechains which allows for truly scalable blockchain games and DApps with the security of Ethereum mainnet. Like EOS on Ethereum.

Experience:

  • Indus OS — Lead Software Engineer. Dates Employed: Nov 2016 — Jun 2018
  • Binary Garage — Lead Software Engineer (Founding engineer). Dates Employed: Jun 2016 — Nov 2016
  • Super.Jobs — Software Engineer II. Dates Employed: Aug 2015 — Jul 2016
  • Changer — Software Engineer. Dates Employed: Feb 2013 — Jul 2015

Education:

  • Bits Edu Campus. Degree Name Bachelor of Technology (B.Tech.) Field Of Study: Computer Science. Dates attended or expected graduation: 2008–2012
  • Windows Kernel — Bright School. Dates attended or expected graduation: 2006–2008

Suhas Aggarwal — Senior Software Developer

Experience:

  • Cuberoot Technologies Pvt. Ltd — Chief Data Scientist. Dates Employed: Oct 2015 — Nov 2018. Built Full Data Management platform from Scratch with real time capabilities. Technology Expertise, AWS, ElasticSearch, Logstash, Kibana, Java, Python.
  • Vdopia, Inc. — Lead Software Engineer. Dates Employed: Oct 2013 — Oct 2015. Won Hackathon Contest — Product Development in short span. Description — Vdopia ad platform development — Backend and FrontEnd. Worked on Aggregation Algorithms in Apache Hive and Google Bigquery. Working with large advertising data sets for optimizing ad serving/targeting, Experience in writing M/R (Map Reduce) jobs using hive scripts Worked on Alerting Architecture which gives Alerts at different checkpoints/stages of the system. Worked on Zabbix for monitoring and Alerting. Worked on Azkaban for job scheduling. Targeting/ Retargeting, geo-targeting(Max-mind), Device-targeting(wurfl). Worked on log analytics such as access logs, Ad serving logs, Big-data Processing Have a sound knowledge of working on Amazon Web Services ( EC2, EMR, S3).
  • Times Internet Limited — Senior Software Engineer. Dates Employed: 2011–2013
  • Universidade do Porto — Research Associate. Dates Employed: 2010–2011. Worked in CISTER (Research Centre in Real-Time Computing Systems) Worked on Sustainable Energy Optimised Datacenters (SENODs) project.

Education:

  • Delhi Public School — R. K. Puram;
  • Indian Institute of Technology, Guwahati. Field Of Study — Computer Science. Activities and Societies: IEEE, ACM, CACCS-2013: Served on Technical Program Committee.

Vadim Macagon — Senior Software Developer

Experience:

  • Hyperworks Inc — Contract Software Developer. Dates Employed: Oct 2017 — Dec 2017
  • Thailand — On sabbatical. Dates Employed: Nov 2013 — Oct 2017. Currently implementing an extensible multi-platform debugging framework using TypeScript, Electron, React, Polymer, RxJS, LLDB and GDB. Prior to that spent some time creating plugins for Unity3d and Unreal Engine 4.
  • General Systems Design Group, Inc. — Contract Software Developer. Dates Employed: Mar 2009 — Nov 2013

Education:

  • National School of Computer Science and Applied Mathematics of Grenoble. Degree Name — Master of Science (MSc). Field Of Study — Informatics. Dates attended or expected graduation: 2011–2012.
  • University of Auckland. Degree Name — Bachelor of Science (BSc). Field Of Study — Computer Science. Dates attended or expected graduation: 2000–2003

Phoorichet Thepdusith — Senior Software Engineer

Phoorichet is a software engineer with 10 years of professional experience in software development. Specialized in high performance software design, infrastructure platforms, security, network, and mobile development. AI and Machine Learning enthusiast.

Misha Yurchenkov — Senior UI/UX

Experience:

  • StartupCraft — UX Designer, UI Designer. Dates Employed: Jun 2017 — Jan 2018. UX-UI design based on marketing and business analytics
  • kudabi.kz — Executive Director. Dates Employed: 2006–2016
  • Ecosystem ltd — Executive Director. Design department. Dates Employed: 2001–2006. Multimedia virtual tours in google earth environment

Education:

  • Saint Petersburg State Mining Institute named after G. V. Plekhanov (Technical University). Engineer. Dates attended or expected graduation: 1994–2000
  • Ust-Kamenogorsk Fine Arts School. Degree Name — Licentiate degree. Field Of Study — Fine/Studio Arts, General. Dates attended or expected graduation: 2000–2003.

Wilfred Dajotoy — Senior 2D Artist

Experience:

  • Freelance 2D / 3D Artist — Video Game Artist: Jul 2015 — Mar 2018.
  • Boomzap Entertainment — Senior Artist. Dates Employed: May 2012 — Jul 2015
  • Gameloft — Senior 3D Artist. Dates Employed: May 2009 — May 2012. 3D Modeler, Texture Artist
  • Pixelstream Corporation — 3D Artist. Dates Employed: May 2008 — May 2009

Education:

  • Far Eastern University. Degree Name — Bachelor of Fine Arts — BFA (Major in Advertising. Field Of Study — Advertising. Dates attended or expected graduation 1997–2003
  • San Sebastian College — Recoletos de Manila

Nayeem Siddique — Project Manager

At Loom Network Nayeem manages software projects targeted to various platforms and tools.

Experience:

  • Utopiat — Task Manager. Dates Employed: Mar 2018 — Present
  • Fun with Games — CEO & Founder. Dates Employed: May 2017 — Present
  • Cobalt Play — Product Project Manager. Dates Employed: Apr 2014 — May 2017. Market analysis, Development Consultant, Management of employee
  • HamzaGames — Senior Game developer. Dates Employed: Aug 2012 — Jun 2015. Developed games for mobile platform. Did marketing analysis too on 3 main mobile app platform.

Education

  • NCC. Degree Name — IADCS. Field Of Study — CIS. Dates attended or expected graduation: 2010–2015
  • Rifles Public School and College, Dhaka. Greenwich University, Field Of Study — Computer/Information Technology Administration and Management. Dates attended or expected graduation: 2005–2009.

And others.

Partnerships

Several major projects building on Loom:

Validators that are up and running on PlasmaChain:

  • Mythos
  • Bitfish
  • Cobo Wallet
  • Blocktower
  • Staked
  • Chorus One
  • NGC Capital
  • Block Matrix
  • Blockware
  • StakeWith.Us
  • Hey Network
  • Bixin
  • Stake Capital
  • Certus One
  • CMCC
  • Cryptium
  • Multichain Ventures

Integrations with wallets:

  • imToken
  • Trust Wallet

They have also worked extensively with Consensys:

Loom has run several events with GameWith, a major Japanese gaming media outlet:

Additionally, they are now integrating with additional networks like EOS, Cosmos, and TRON on both technical and marketing fronts.

Use case

There are limitless use cases for Loom Network since at its core it is a platform to launch DApps. As long as someone has new idea for an App and want to launch a decentralised one on a blockchain — it will become a potential use-case.

Common DApp use-cases:

  • Games
  • Marketplace
  • Social apps
  • Supply chain
  • Digital collectibles
  • Voting
  • Decentralized Exchanges
  • Gambling
  • Finance
  • Development
  • Media
  • Wallet
  • Storage
  • Identity

Social metrics

Github metrics
Social media activity

Markets and volume

Information from Etherscan.io

Information from Coinmarketcap.com:

Information from Coinlib.io:

TA

On a daily time frame Loom appears to be forming a head and shoulders pattern, further confirmation is required. If true — decline should be broken soon with first target at 0.13$

Loom/BTC looks ugly with support broken. It is possible that Loom is forming wyckoff accumulation pattern and currently is in phase C “spring”, but in our opinion its a knife catching trade.

Roadmap

Top-Level Company Objectives:

  1. Staking: Maximize the percentage of the total LOOM supply that is staked on PlasmaChain
  2. End-User Adoption: Make PlasmaChain one of the most widely used blockchains in existence, measured by DAU (Daily Active User) count and TVL (Total Value Locked) on chain
  3. Interoperability: Integrate PlasmaChain with every other major blockchain network, to increase both user onboarding to PlasmaChain from other chains, as well as network utility for PlasmaChain developers
  4. On-Chain Fees: Generate additional on-chain fees to further incentivize PlasmaChain validators and stakers

Let’s break each one of these down in detail:

1. Staking: Maximize Percentage of LOOM Tokens Staked on PlasmaChain

In the short and medium-term, improving staking metrics will be one of the primary focuses of the company, as it will have significant benefits in securing PlasmaChain and injecting more value into the network.

Loom has a number of things in the pipeline to further increase token staking, mainly through further simplifying the delegation experience for existing token holders who haven’t staked yet:

a) Integrate staking with all the major crypto wallets (including mobile)

b) Signing PlasmaChain transactions using Ethereum wallets — the smoothest cross-chain UX possible

c) Other dashboard UI improvements

Loom has a number of other improvements under development that will improve the overall functionality and UX of staking, such as:

  • Automatic re-delegation of rewards, so the rewards you earn from staking can be automatically re-staked
  • Multiple delegations per user, so users can choose multiple delegation timelines with the same validator — e.g. you can choose to lock up some portion of your tokens for 1 year, and another portion for only 2 weeks

d) Onboarding more validators

2. End-User Onboarding: Becoming One of the Most Widely Used Blockchains in Existence

In the long-term, the success of any blockchain will be determined by metrics such as:

  • the number of users interacting with that chain,
  • the total economic value of tokens stored on that chain, and
  • the value of fees generated by transactions on that chain.

Loom’s goal is to maximize these metrics, as these will be the factors that will determine the “staying power” of a blockchain platform in the long run. (Much like the lock-in effect at social networks like Facebook, where users don’t want to switch to a new platform due to the strong benefits of existing network effects).

The ways Loom plans on raising first two metric:

a) Integrations with popular chains — adoption from the existing blockchain community

b) Developer onboarding

c) Bringing DeFi to PlasmaChain

d) Viral user onboarding through games — a trojan horse to being one of the most widely utilized blockchains

3. Interoperability: Integrations With All Major Existing Blockchain Networks

In the short-term, this will give Loom an edge by allowing developers on PlasmaChain to access the user bases of all major chains.

If standalone blockchain platforms follow Metcalfe’s law, then a platform that integrates with and connects multiple blockchain platforms (each with their own active user base) gets to take advantage of the network effects of all these platforms combined.

Interoperability brings additional value to each chain that is part of the network — and the hub that connects these chains will itself capture an immense amount of value.

Over the next year, Loom will focuses in this area will be:

a) Building out initial integrations with Tron, EOS, and Cosmos

b) Seamless wallet integrations on all platforms — sign with your native EOS / Tron / Ethereum account

c) Integrate with any other networks in the future that reach a critical mass of user adoption

4. Generating On-Chain Fees

In the short-term, Loom has allocated a large portion of the company’s token supply as guaranteed payments to PlasmaChain validators and those who stake their LOOM tokens, in order to incentivize users to stake their tokens and secure the network.

You can think of this like Bitcoin or Ethereum’s block rewards, which are essential in attracting interest from miners/validators in the early days of a network.

For PlasmaChain, as block rewards go down, Loom plans to generate fees for validators both from DApp hosting fees, as well as from some core services built into the chain that all DApps will share:

a) DApp hosting fees

b) Core chain services that generate fees

c) Fractional validation of child chains

Source

Token Mechanics

The LOOM token is used for all products and services offered by Loom Network. Loom has continued to add more and more uses for the LOOM token since they officially released it in March, and may add more in the future as they release additional products and services.

Here is a list of the use cases they have announced so far:

a) Developers: Token Staking & Payment to Run DApps on PlasmaChain (and other shared chains in the future)

Here’s how the LOOM token will come into play:

  • Developers who want to run a DApp on PlasmaChain lock a minimum number of tokens into a smart contract to power their DApp.
  • Each month, tokens are deducted based on how much shared “bandwidth” that DApp consumes (measured in Transactions Per Second). Developers can choose to cap their throughput at a certain tier to prevent unexpected costs.
  • The tokens that are deducted from developers each month get paid to the DAppChain validators as fees for running the DAppChain.

In this way, the token model is similar to EOS’s, except since the LOOM token isn’t inflationary, the real cost of running their DApps is more transparent to developers.

b) Users: Zombie Battleground Game Membership Benefits

In Zombie Battleground, a collectible card game on the blockchain, there are multiple ways to earn new cards.

You can earn new card packs simply by playing and getting rewards — the game is built to give “lots of loot” so free-to-play players aren’t penalized for not shelling out a lot of cash.

Players who are short on time can optionally choose to pay money for cards — either through buying random card packs directly from Loom, or buying individual cards directly from other users on native marketplace.

But there’s a third way you can earn cards — by staking your LOOM tokens.

Players who stake their LOOM tokens can get a “game membership” that will give them free packs of cards (and other benefits) each month.

When you stake the tokens, you don’t lose them — you can get them back whenever you want, at which point you’ll stop receiving the monthly rewards. And if you leave them staked, you’ll continue to earn in-game rewards each month.

c) Developers: Enterprise Support for the Loom SDK

The Loom SDK allows developers to easily build their own DAppChains.

For enterprises who want to run their own standalone DAppChain and want hands-on support from Loom dev team while running it, Loom will be providing premium support at a cost of 100,000 LOOM per year.

d) Users: Access to Loom Transfer Gateways

This was the original use case of the token: The LOOM token acts as a lifetime membership card to all DApps running on Loom Network.

DAppChains are free-to-use for users, but once the user wants to transfer their assets to Ethereum (or another DAppChain), they’ll need to own 1 LOOM token as a membership key.

e) Developers: Loom SDK License Tiers & Running Nodes

Developers will need to own a sufficient number of tokens to cover their license tier both for using the SDK and operating a node on a private DAppChain.

Source

Block Reward Payout Schedule

Each year, a maximum of 20% of the company’s remaining token pool will be paid out to validators. The payments will be made every election cycle (2 weeks), and divided between validators based on how many blocks each validator created, which is in proportion to how many tokens they have staked.

Here’s how that maximum payout looks over the next 5 years (assuming the maximum is released in each previous year):

Block Reward Percentages and Lock-up Bonuses

The amount of block rewards validators receive is calculated based on (a) the number of tokens they have staked, and (b) the length of time those tokens are staked or ‘locked up’.

Longer lock-up periods are rewarded with higher percentages, as detailed below:

The top 21 staking pools are elected as official validators of the network and will receive the payouts in exchange for their services.

Source

Token Metrics

There was no ICO — Loom Network was privately funded and part of Techstars NY. When Kucoin first made a secondary market in LOOM tokens, tokens initially started selling at $0.076 USD / 0.000122 ETH, according to CoinMarketCap.

Total supply of LOOM tokens is fixed at 1 billion tokens.

What is the circulating supply?

  • The company holds 35% of the total supply as a reserve fund.
  • 10% is held by team members and advisors with a lockup period ranging from 6–12 months.
  • The rest is in circulation, so somewhere between 55–65% depending on how much of the advisor pool has entered circulation.

Source

Summary

Team: Mainly consists of tech specialist of different level, some members have entrepreneurial experience. But team lacks specialists from tech giants.

Idea: Layer 2 scalability with sights on gaming, and plans to achieve interoperability
Development stage: Mainnet
Whitepaper: Nonexistent
Roadmap: No precise deadlines

Loom Network is a project that has been around for some time and it became known as a project that focuses on fast delivery. While the company says it’s focused on social and gaming, the dApps already on the Loom ecosystem cover wider range of use cases. Other than their own DApps, Loom already has 20+ project building on them right now.

As PaaS solution, Loom has a number of competitors, though Loom doesn’t views them as such, but as potential interoperability features. It plans add most major projects to their ecosystem, starting with EOS, Tron and Cosmos. We will see how successful this decision will be and will this help attract new users/developers/project as planned.

Loom has a lot of work to do to attract users and developers to its platform, since Ethereum, EOS, Tron are projects with much more DApps, active users and developers, Loom will have to create really desirable incentives, to grow its ecosystem.


This is not financial advice.

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Paradigm fund

Paradigm is a family office fund investing in crypto space since 2013. We are a group of industry experts & crypto enthusiasts consisting of PhDs and graduates from the top universities with experience in creating startups, trading on traditional financial markets and blockchain

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Paradigm fund

Paradigm is a family office fund investing in crypto space since 2013. We are a group of industry experts & crypto enthusiasts consisting of PhDs and graduates from the top universities with experience in creating startups, trading on traditional financial markets and blockchain