The pNetwork is the increasingly decentralised layer powering and governing the cross-chain pTokens solution.
This is currently fueling the widest cross-chain system available to date:
- interconnecting 5 different blockchains (Ethereum, Bitcoin, EOS, ..)
- wrapping 11M+ USD in liquidity
- expanding 20+ tokens beyond their native blockchain
- enabling 3,000+ holders to stay local on their blockchain of choice while thinking global
As part of the project’s progressive decentralization roadmap, a growing number of components are being introduced to the system.
Today, we are announcing pNetwork Dawn, a network of node operators tasked with powering interoperability for dApps, and enabling cross-chain trading, lending, and collateralization.
➡️ Looking for a TL;DR? ⬅️
- The first pNetwork nodes will be able to go live next week, moving the pNetwork a step forward in its progressive decentralization roadmap
- Anyone who stakes 200k PNT in the pNetwork DAO can run a pNetwork node and be entitled to earn fees generated by the system (+ 42% APY given by the pNetwork DAO when actively voting to DAO proposals)
- A peg-in/peg-out fee structure for pTokens will be proposed in January 2021 for community discussion and DAO approval, enabling pNetwork nodes to start earning fees
pTokens bridges enter Phase 1
In their initial stage, pTokens was underpinned by Trusted Computing as a way to provide auditability to the system. In the case of general-purpose cross-chain systems, this represents an unprecedented level of transparency. As the number of pTokenised assets grows larger, the underlying nodes structure powering the cross-chain bridges is being upgraded to reach an improved level of decentralization.
The first upgrade of the system sees the introduction of a network of node operators. The pNetwork is an open, public and independent network with an inbuilt governance structure.
pNetwork node operators are the backbone of the pNetwork. They operate the crucial cross-chain infrastructure to ensure that smart contracts and dApp users across every blockchain have access to assets’ value and liquidity. For example, pNetwork node operators will collectively power a wide range of cross-chain connections live-in-production, which currently contribute to the $15+ Billion DeFi market.
Anyone can set up a pNetwork node and secure the movement of BTC (and other non-native assets) into the DeFi ecosystem!
PNT, the cryptocurrency native to the pNetwork, is used to govern the system and coordinate node operator incentives. PNT holders can contribute to the success of the project by participating in the pNetwork DAO and by joining the network as node operators. Nodes can benefit from DAO staking rewards as well as peg-in and peg-out fees.
As planned, the pNetwork open protocol will undergo subsequent upgrades for it to achieve the best possible level of decentralization and security. The first to arrive is pNetwork Dawn — an open network that enables the secure transfer of value between any blockchain.
pNetwork Dawn hosts two types of node operators, one contributing to the validation of pNetwork-powered operations (example: cross-chain movement of assets via pTokens) and the other constantly verifying the security of the network, challenging the correct behaviour of validators.
Cross-chain transfers are continuously verified by the network to ensure the transparent and secure execution of the asset switch.
Introducing pNetwork Dawn — security and progressive decentralization
As the underlying architecture for pTokens and other features (such as the upcoming pNetwork Portals), the pNetwork provides the foundation for a truly decentralized system, and is, in fact, a realisation of its progressive decentralization aims.
The first system upgrade sees a major shift from a single node to a network of nodes. Such an upgrade effectively scales up the project to its “Phase 1”.
Moving into Phase 1, pNetwork Dawn introduces an improvement over the initial model as it strengthens the security of the pTokens’ bridges, while minimising various risks.
pNetwork Dawn introduces a fully transparent cross-chain interoperability solution supported by a network of node operators.
pNetwork is an open protocol built to grant interoperability and liquidity movement between different blockchain ecosystems. As the system upgrades for it to be supported by multiple parties (multi-node setup), the pNetwork project moves into being the most flexible transparent solution for cross-chain movement of assets.
These cross-chain node operators are responsible for watching the blockchain for new incoming requests for asset switches from one network to another and ensuring the requested asset tokenisation process happens correctly.
The upgraded structure makes use of both a network of node operators and Trusted Execution Environments to grant security over the network. A Trusted Execution Environment (TEE) is a secure sandbox that provides security features, guaranteeing the code and data loaded inside to be protected and remain confidential. A security-focused technology, TEEs have existed for almost a decade and currently have numerous real-world applications like smartphones. Institutions around the world, including the Massachusetts Institute of Technology (MIT) and Oxford University, have explored the topic as well as its uses. Its security features can be combined with blockchain technology in a complementary manner — because of this, projects and organisations including the EEA — Enterprise Ethereum Alliance, Hyperledger and the Polkadot ecosystem are experimenting in that direction.
As mentioned, decentralization and TEEs aren’t an either/or choice, but it is possible to use both in a simple, complementary way. Running TEE-enabled nodes in a decentralized system helps ensure that these nodes behave honestly. For the system to process unbacked tokenisations, a majority of node operators would need to act maliciously and the TEEs on their nodes would need to fail in a coordinated fashion. Quoting Ari Juels, Professor at Cornell University, “A decentralized system that uses TEEs is strictly stronger than a system that doesn’t”.
pNetwork node operators contribute various Trusted Execution Environments (TEEs) to the network, that represent an extra protection shield for the system.
Multiple TEE techniques are employed to safeguard the generation and management of the key-pairs used by the pTokens bridges. This benefits the entire system by making it more secure — for example, sybil attacks are made drastically more expensive thanks to the use of multiple TEEs (where different isolation techniques enforce the execution of the exact code the network has agreed on).
Unfortunately there are a lot of misconceptions about the use of TEEs, the simplest way to understand the security of such systems is asking ourselves whether using a shield in a hostile environment would be of any help: while TEEs don’t help make a system decentralized, a multi-TEE setup such as pNetwork’s makes attacks from malicious nodes expensive and extremely impractical. When there is a risk to be attacked, any additional protection helps.
pNetwork node operators are the backbone of the pNetwork. They participate within decentralized networks, contributing to securing the asset switch from one blockchain to another (pTokens peg-in and peg-out) as well as powering all of the features and services within the ecosystem. They cooperate to guarantee a high-level of security for the services they power, such as the cross-chain movement of assets.
At their core, pNetwork nodes run code that is continuously audited, fully open-source and supported by live attestations.
pNetwork Dawn hosts two types of node operators, one contributing to the validation of pNetwork-powered operations (example: cross-chain movement of assets via pTokens) and the other constantly verifying the security of the network, challenging the correct behaviour of validators. The former category is responsible for operating the system in an immediate and automated manner, while offering to release a proof of execution at any time. The latter set of node operators guarantees transparency and security of the network, by continuously verifying these proofs of execution and alerting the ecosystem of malicious actions should any of these happen. Many systems offer transparency guarantees, but are they of any good if no one ever checks them? pNetwork Dawn ensures the system integrity and correctness is always monitored.
pNetwork node operators execute their critical operations via TEE-enabled machines. The use of TEE-enabled machines allows node operators to issue and verify proofs that a certain operation happened as planned without tampering.
In this phase, two TEE technologies are used, namely Strongbox (backed by Google’s TitanM security CIP) and AWS Nitro system. Both technologies leverage hardware-backed attestation to secure their operations. In future phases, more TEEs will be supported.
The presence of multiple parties supporting the network itself contributes to increasing the security of the system, removing a central point of failure and reducing the control of the main development team over the system.
Different levels of decentralization have proven successful over the years. For example, Ethereum is currently supported by over 9,800 nodes, Chainlink hosts 107 nodes, the count of Bitcoin nodes is 11,500, while EOS has 21 block producers.
Following the introduction of its DAO governance system earlier this year, the pNetwork team is happy to bring the system a step ahead in terms of its security and decentralization.
Further upgrades aim to achieve full decentralization, promoting all nodes to executing both validation and verification functions. Additional security measures are planned to be added in future versions of the pNetwork, including support for a growing number of TEE techniques and Multi-Party Computation (MPC) distributed signing.
Incentives for running a pNetwork node
As mentioned, pNetwork nodes are a critical component for the security of the pNetwork. For this reason, the protocol aims to reward their operation by redistributing the fees generated by the system to its contributors. While the founding team is subsidizing peg-in and peg-out fees to make pTokens operations free for users, a fee system will be introduced to make it sustainable for nodes to operate.
pNetwork nodes are required to stake within the pNetwork DAO an amount of 200k PNT tokens for a minimum period of 3 months. Other than accruing pNetwork DAO staking rewards (accrued by all active DAO members), nodes will benefit from peg-in and peg-out fees once those are introduced.
Starting next week, anyone will be able to spin up and register a pNetwork node!
We expect a DAO vote to determine a system for fees distribution across node operators shortly after launch — more details on the proposed peg-in and peg-out fee structure will be published for discussion in the coming weeks and will ultimately be vetted by the pNetwork DAO.
Running a pNetwork node
To become a node operator in the pNetwork and begin delivering cross-chain assets, there are a few technical requirements within the pNetwork node setup to ensure a smooth and reliable operation. The core components include:
- PNT staking. A number of pNetwork Token (PNT) coins are needed for node operators to set up their operations (currently 200k PNT). PNT is used to govern the system and reward node operators. Currently, a 42% APY reward is distributed across node operators who stake within the pNetwork DAO. Additional rewards will be introduced to the system to guarantee successful operations for node operators (dependant on a DAO vote);
- pNetwork cli (pcli). A tool for managing the pNetwork node lifecycle. Through pNetwork cli, node operators can proceed to the initial setup of the node and subsequent handling of its operations.
Specifics on how to set up and manage a pNetwork node will be available on the relevant Wiki (a collaborative platform that details all-things pNetwork nodes) upon launch.
An important step is for operators to register their node so that it is effectively recognised as part of the pNetwork. The node needs to be connected with the Ethereum address staking the required amount of PNT within the pNetwork DAO. Registration of the node is a mandatory step that enables node operators to both be rewarded for their contribution to the system and be slashed to disincentivise malicious behaviours (future use). The pNetwork node and the Ethereum address are required to have a 1:1 connection, so that each Ethereum address holding PNT is linked to one node.
Stay tuned as pNetwork Dawn approaches launch. Coming December 2020.
🔗 For any blockchain project looking to integrate pTokens into their infrastructure, we have also built a pTokens JS library.
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