Stakenet Light Paper
This is a non-technical and condensed article covering the main points of our White Paper. For the full White Paper please click here.
What is Stakenet?
The name Stakenet was created from merging Stakeholders Network, as we believe everyone within the network is a stakeholder and as such should be rewarded for assisting in providing security and services for the ecosystem. Stakenet is the overall name for our project and our digital asset is XSN.
Stakenet is an ambitious project aiming to make blockchain and it’s various technologies easy to use and accessible for everyone. We will do this by using a combination of refining existing technologies like Lightning Network and Masternodes as well as our own custom technologies developed in house like our Cold Staking technology Trustless Proof of Stake (TPoS) and Lightning Swaps.
Stakenet is comprised of 3 separate teams, the software and blockchain team is headed up by the X9 Developers, our website and cloud app is a different team and finally we have our hardware division who are building crypto asset and blockchain devices.
How will Stakenet achieve its goals?
To build an interchain economy you need to start with a solid foundation, for this foundation we use Masternodes. Masternodes in our network will be multi-function and host a wide range of services like our Lightning DEX as an example. By using our Masternodes as service providers this ensures we have a robust, decentralized and flexible platform to build on.
Our Masternodes will host all the various blockchains supported by the network as part of the interchain mesh. Using Lightning Network in addition to this it allows us to move across chains instantly for little to no fee. As Lightning Network is an off-chain scaling solution in addition to being near instant and feeless it is also theoretically infinitely scalable so is ideal for our purposes.
Through tokenization we can also support non-native Lightning assets and blockchains such as the entirety of the EOS, Ethereum and Binance Chain networks. This will allow you to access them all from one convenient location, our multicurrency wallet — Stakenet Wallet.
Stakenet supports the building of code-agnostic dApps on top of it, such as the XSN Dex. All dApps will be powered by XSN Masternodes, which charge fees for the services they provide. Unlike the vast majority of cryptocurrencies, Stakenet does not impose a brand new standard, but rather adhere to the existing BTC/LN protocol and existing smart contract solutions, which are both the present and future of the blockchain economy.
What does all of this mean?
When you put all this together for the end user it offers an unparalleled experience for utilising crypto assets. Users will be able to access what they want, when they want and use whatever they want whilst fully in control of their assets with full privacy in a truly decentralised fashion and all from one convenient location.
It is important to note that you do not need to hold/own any XSN at all to use any of the services provided. Fees for any services can be collected in any asset the user wants to use and in the background a Lightning Swap will convert the fee into XSN to be distributed to the Masternode owner for providing the service.
What is Lightning Network?
Lightning Network is a scaling solution to solve the issues with Bitcoin and other assets to increase the speed and capacity of the network by making transactions “Off-Chain” without compromising the base layer security and decentralization. A simple way to think about it is if you go to a bar and open up a tab, you get drinks all night and then at the end of the night you settle your tab in one transaction paying for all the drinks at once instead of paying for each drink individually throughout the night which would take much longer. Lightning network is pretty much the same but on a much larger scale. You open a channel and make all your transactions and then at the end when the channel closes it settles the balances to the chain. This is far more efficient than making lots of time consuming individual transactions and allows you to bundle them all together making it cost much less too.
Lightning Network is a great solution however it has its fair share of issues, the main criticisms being poor liquidity in the channels, lack of decentralisation and finding a way to incentivize WatchTowers. Stakenet has a network of over 2000 Masternodes at the time of writing, all of which are collateral backed with 15,000 XSN. By using our Masternode Network we solve all three of the main issues of Lightning Network in one by providing a huge, collateral backed, decentralized, trusted network which is perfect for Lightning Network.
Economic Incentive and Governance
Stakenet is funded through a governance system by Masternode voting. Each month Masternode owners vote to release funds from the treasury to the team to pay for development. If the vote passes the 10% block rewards are minted and released. This system ensures constant development of Stakenet and that no central entity has control over the treasury.
At the basic level we have block rewards which are distributed between Stakers and Masternodes. Stakers provide security for the network and Masternodes provide the services. Block rewards are split 45% to Masternodes, 45% to Stakers and 10% goes to the Treasury to pay for development. Additional to the block rewards Masternodes also have the ability to earn extra income by providing services.
To learn more about all of our various Staking and Masternode options please check the links below for in depth articles for each.
Privacy and Security
Privacy is something we take seriously at Stakenet and we want to ensure that it is there when a user needs it. As such we have implemented an easy to use “1 click” TOR Privacy activation method into our multicurrency wallet. This gives users a level of privacy for all assets supported by the wallet.
Further to that we will be adding coin-mixing and Mimblewimble to enhance that level of privacy. Additionally we are looking at privacy solutions that are unique to Lightning Network so that overall Stakenet will offer the highest levels of privacy.
For security we use the X11 Algorithm which uses a chained combination of eleven hashing functions part of which is known as SHA-3. SHA-3 alone is considered to be quantum resistant as based on recent studies it is estimated that it would take 10³² (thats 10 with 32 zeros after it) years to break so it’s safe to assume that during our lifetime quantum computing will not pose a danger to Stakenet.
Stakenet Wallet — The Stakenet Wallet is a non-custodial multicurrency light wallet and the main interface to interact with for the cryptocurrency world. It will be available in both desktop and mobile versions. As our Masternode Network holds the databases and full nodes for the blockchains the wallet doesn’t need too, this keeps it lightweight, fast and not just limited to basic functions like most multicurrency wallet solutions on the market. You can use it in combination with hardware devices to access things like Cold Staking, setting up Masternodes or managing Lightning Hubs for example. Additionally it has an in-house trading engine which will be connected to XSN Dex. Finally to ensure secure and private access to our interchain mesh it provides native TOR support which is managed by our Masternode layer.
XSN Coin — The XSN Coin itself is a state of the art cryptocurrency with many unique properties. XSN is open, permissionless, decentralized, trustless,
censorship-resistant, immutable, smart, interoperable, fungible, secure, and has a fixed emission rate. Each service that generates fees will be paid for in XSN either directly or in the background via a Lightning Swap. It is the gas that powers the entire ecosystem that everything runs on top of.
XSN Core — The XSN Core wallet is the open source component needed to run a full node within the Stakenet blockchain. It acts as the core interface for using the functions of the Stakenet Network and is required to operate a Staking node, Merchant node, Lightning node and Masternode. XSN Core is compatible with the most popular operating systems such as Linux, macOS and Windows. It can be accessed through the command line interface or GUI.
XSN Excalibur — Our open source private key management and storage system which is auditable by the public is called XSN Excalibur. It is based on Trezors reputable code and uses a seed to generate private keys within the Stakenet interchain economy. Thanks to XSN Excalibur, Stakenet users can backup and access all of their assets just by knowing one phrase.
XSN Dex — Our decentralised exchange (DEX) is called XSN Dex and is a true DEX with no centralized point of weakness. It is a dApp hosted on our Masternode Network and provides a means for users to trade crypto assets directly from their own Stakenet Wallet without having to hand over control of their assets to a third party. It utilises our Lightning Swap technology to make trades instantly. The assets never leave the users possession with XSN Dex unless the transaction is completed and as such users can benefit from the utilities, features and staking rewards of the coin.
Additionally users remain anonymous as they do not have to provide Know Your Customer (KYC) details to anyone providing complete anonymity and freedom to trade without fear or worry. All transactions are done on a Peer to Peer basis without the involvement of a centralised authority making transactions more secure and less expensive.
Another key point of the XSN Dex is it’s ability to aggregate other DEX solutions in it as long as the opposing DEX is truly decentralised. It is possible to add their validation nodes to the Stakenet mesh and bridge between different order books. In the end all Stakenet users can trade with any other compatible DEX through one interface.
XSN Viper — The XSN Viper is a specialised hardware wallet with integrated basic Lightning Network routing capabilities to provide the ability to run hubs for the Lightning Network and generate fees for Stakenet, Bitcoin and Litecoin. XSN Viper stores user assets safely in cold storage by using a separate microcontroller that holds private keys and remains offline and is powered by our open source firmware XSN Excalibur. This allows all Stakenet users to use all supported assets features from one hardware wallet.
XSN Cloud — XSN Cloud is a centralised application that offers blockchain services, designed to grant a better and easier experience for Stakenet users, thus helping with adoption. XSN Cloud has the following features:
- Staking-as-a-Service: This offers the easiest way to start staking by simple depositing your assets into the multicurrency Cloud wallet. After a maturity period your assets will begin receiving staking rewards.
- Masternodes-as-a-Service: This is our Trustless Masternode hosting solution. It allows you to effortlessly setup and run your Masternode while keeping your collateral in your own local wallet so is risk free.
- Monitoring Services: A real-time monitoring service for Masternodes and Trustless Proof of Stake contracts. Customers will immediately receive e-mail alerts if anything goes wrong.
- ROI Calculator: The relationship between Staking Nodes and Masternodes changes daily so the profitability of each does too. The ROI calculator is a tool to find the best choice for you.
XSN Cloud collects fees from the users for using some of these services. Fees are then sent to the XSN Cloud Treasury and used to cover costs and further development.
Stakenet is a distributed network for incentivized stakeholders; providing a trustless interchain economy. It is based on an enhanced Proof of Stake blockchain with several second layer solutions, like the Lightning Network, Masternodes, and dApps. It has one second confirmation time and up to 240 on-chain transactions per second. Over the Lightning Network, where the majority of the transactions will take place, the Stakenet blockchain can infinitely scale with instant and practically free transactions. Its use case is to provide a cross-chain architecture for cryptocurrencies, where individuals can easily operate with any blockchain simply by using Stakenet’s native coin XSN, as the blockchains are connected to each other through the Lightning Network and other cross-chain technologies.
Stakenet provides one of the highest levels of security among any Proof of Stake blockchain. Stakenet Masternodes create a massive decentralized network of computers that generate incredible amounts of computational power. They provide high-end network services and run the dApps that are built upon the blockchain.
Stakenet is the first Proof of Stake blockchain with Masternodes to successfully execute Lightning Network compatibility and is among the first, besides Bitcoin and Litecoin, to ever perform atomic swaps over the Lightning Network (Lightning Swaps). Therefore, the Stakenet blockchain can interact with any Lightning Network compatible merchant, application, wallet, or upcoming crypto device. Thanks to Stakenet’s cross-chain capabilities users will be able to pay anyone that accepts Bitcoin, or any other Lightning Network compatible coin, seamlessly with their XSN, improving adoption on a massive scale as thousands of merchants already accept Bitcoin payments over Lightning Network.
Stakenet is building the safest, fastest, and cheapest interchain architecture for the blockchain economy by combining Lightning Network, different smart contract solutions, privacy and cold storage to trustlessly stake, exchange and pay.