Is Verus Poised to Challenge Ethereum?
After this initial deep dive into the Verus Project’s technology, you may agree that the Verus blockchain architecture, and use of smart transactions over smart contracts, are poised to position it as the strongest new force in emerging blockchain functionalities like DeFi and decentralized identities.
On May 21st, 2018, one lucky miner in the world somewhere mined the first VerusCoin to ever exist. Since then a vastly growing number of people have discovered the Verus Project. They are forming a lively and thriving community that has been participating in the network through mining and staking the coin, and are also contributing to its growth.
Verus has come a long way since more than two years ago. We are proud to share our achievements with you. In this article, you will reach a better understanding of some of the technology that has been built and what makes Verus unique and, in our opinion, superior:
- Fair Launch: No ICO, pre-mine or founder and developer fees.
- VerusHash 2.2: The hashing algorithm that was developed to lower mining barriers for everyone and create a naturally decentralized network.
- Verus Proof of Power (VerusPoP): 50% PoS, 50% PoW, a provable hybrid solution to 51% hash attacks.
- VerusID: Arguably the most advanced self-sovereign, decentralized identities; they are revocable and recoverable identities on the blockchain, packed with features and capabilities for everyone to use.
- Public Blockchains as a Service (PBaaS): Launch your own blockchain with customizable specifications, while using Verus infrastructure for security and continuity. PBaaS provides a roadmap for practically unlimited scalability.
- Multi-Reserve Currencies: Just one part of the Verus token/currency functionality, multi-reserve currencies are the foundation for a user-centric DeFi.
- Value for Miners & Stakers: Verus architecture provides rewards to miners and stakers, an entire economy that leads to a robust, strong and permanent infrastructure.
Fair Launch: No ICO, Pre-Mine or Developer and Founder Fees
An announcement was made 15 minutes prior to the launch of the blockchain [see BitcoinTalk announcement]. From the very first beginnings of the VerusCoin blockchain anyone had a fair opportunity to start mining and then staking the coin. Verus is a community driven project in the true spirit of Bitcoin — no ICO, no pre-mine, no founder or developers fees.
The Verus Coin Foundation pushes development further to accomplish its vision for the future [see Verus Vision Paper]. Anyone who wants to contribute to the project, in any capacity, is welcome. Join our ever growing community on Discord to find out more about the Verus Project.
VerusHash 2.2: Lowering Mining Barriers for Everyone
VerusHash 2.2 is the mining algorithm for VerusCoin. The algorithm was developed to explicitly equalize FPGAs and modern CPUs, and to create a naturally decentralized miner ecosystem.
No specialized mining equipment is necessary to mine VerusCoin, and it can even be solo-mined directly from the Verus Desktop wallet with just a few clicks, without any additional software requirements. Beginners can find an even level playing field to start earning VRSC.
Verus Proof of Power (VerusPoP): A Provable Hybrid Solution to 51% Hash Attacks
VerusCoin has a unique consensus mechanism: it is 50% Proof of Work and 50% Proof of Stake. This means that half of newly generated blocks come from mining (PoW), and the other half comes from staking (PoS). Verus’ staking algorithm solves the two major theoretical issues undermining other PoS systems, “nothing at stake” and “weak subjectivity” by leveraging its smart transaction capabilities to remove any incentive to attempt cheating, making it a losing proposition.
This mechanism is called Proof of Power or VerusPoP and provides a further decentralizing effect on the network, incentivizing holders to keep nodes online to support the network. Even if a change in network hashrate happens, the PoW/PoS ratio stays the same: 50/50%.
To successfully attack the VerusCoin blockchain, more than 50% of the validation power is needed, called Chain Power. On top of that, VerusCoin utilizes Komodo’s delayed Proof of Work. This means the chain is constantly being notarized into the Bitcoin blockchain on every bitcoin block, leveraging Bitcoin’s hashrate to help defend the Verus network.
In over two years of mainnet, VerusCoin has never experienced a successful 51% hash attack. Learn more in the technical whitepaper of VerusPoP.
VerusID: Self-Sovereign, Decentralized, Revocable and Recoverable Identities on the Blockchain
“Smart transactions” also provide the foundation to create decentralized identities with revocation and recovery capabilities that we have not seen with any blockchain project, not even on their roadmaps. Anyone can create a VerusID with our easy to use multi-currency wallet, Verus Desktop, or through the Command Line (CLI) [find both here]. A creator of a VerusID pays a fee of 100 VRSC, or 80 VRSC when using a referral. These fees go 100% to miners and stakers. Here is a list of the most important features of VerusID:
- Self-sovereign: you have complete ownership and control over your VerusID through the use of private keys. No one besides you has control over your VerusID unless you choose so. It is a permissionless system, so anyone in the world can create a VerusID.
- Revocable and recoverable: when creating a VerusID, you can specify a revoke ID and a recover ID. Verus believes that this functionality is critical for any system of self-sovereign identities; users need a path to recover their identities if their private keys are lost or stolen, otherwise there is just too much risk in a self-sovereign system where an identity can become inaccessible with a single mistake. It’s now possible for the first time ever that you can recover from private key loss or theft in a completely decentralized, self-sovereign way.
- Friendly name: a VerusID is a blockchain address that can also hold funds, and stake its VRSC. This is an improved system for holding and receiving funds, as users now have a friendly, human-readable name, e.g. Verus Coin Foundation@, to receive, send and secure all their cryptocurrencies. It means, too, that funds held in a VerusID address are recoverable in the event of private key loss.
- Multisig: each VerusID can function as a multisig address, thus making it possible to be controlled by multiple people. In this way, new methods are provided for organizations or groups of people to work together.
There is more: with VerusID you also have z-addresses (Sapling) for private transactions and messages, and you can create unforgeable signatures for messages and for signing files. Furthermore you can transfer a VerusID to another address, including all of its UTXOs!
Earn VRSC with Referrals
VerusID has a referral system in which anyone can earn VRSC. Referrals go back 3 levels as part of the blockchain rules. An unreferred VerusID costs 100 VRSC, all of which goes to the miner or staker of the block that contains that VerusID registration.
If someone has a referral, their VerusID costs 80 VRSC, and 20 VRSC goes to the referrer. If the referrer has a referrer, they also get 20 VRSC. Up to 3 referrers get 20 VRSC each and the remaining 20–60 VRSC goes to the miner or staker of the block.
Public Blockchains as a Service (PBaaS): Launch Your Own Blockchain
Verus sees a future where anyone can create their own blockchain in an easy fashion. Every blockchain in the ecosystem is independent and customizable. To create a chain one needs to have the VerusID name of the chain.
Chains can be nested to any level, so that a chain, say “NewChain”, that is launched with a VerusID on the main Verus blockchain, can be used to spawn an unlimited amount of new chains, each of these using identities on NewChain, which can be acquired at any cost as selected by the creator of NewChain.
New chains inherit the 50/50% PoW/PoS consensus mechanism. This percentage might be customizable in the future.
A newly created chain can be mined by the miners of VerusCoin. A miner in the VerusCoin ecosystem can mine up to 22 different PBaaS-chains without losing any of the original hash power. This is called Merge-Mining and means that a creator of the chain doesn’t have to worry about creating their own mining infrastructure.
PBaaS chains will form the basis for a practically unlimited scalability of the Verus system. Popular currencies and tokens can exist and be interchangeable on many Verus blockchains, so that they won’t be restricted or limited by the capacities of a single blockchain.
A chain can have certain characteristics like launches with Kickstarter-like minimums to activate or, if not met, automatically refund. Other options include dynamic coin launch pricing based on participation, pre-launch participation price discounts, pre-conversion reserve currency carve outs, and price-neutral launch pre-allocations. Additionally the creator can specify coin supply, coin emission with up to three era’s and define the price for identities. All specified in easy to understand commands and parameters, no programming necessary.
Multi-Reserve Currencies: DeFi Reimagined
Verus is currently in testnet with its system of currencies and tokens which can be optionally backed by reserves. There are many other options for currency/token creation that we will cover in future articles.
Here, we’ll focus on multi-reserve currencies, which we believe offers a new reimagined paradigm for the world of decentralized finance. Specifically, these multi-reserve currencies allow the creation of liquidity pools (like Uniswap, Bancor or Balancer) with a better cost and risk structure for providers than that witnessed in Ethereum-based systems (where providers must deal with high gas costs and risks of faulty smart contracts).
Liquidity providers can also benefit from volatility within a pool as the Verus system dynamically requires additional fees from conversions when the conversion ratios are volatile (in order to offset impermanent loss). A liquidity provider can earn good fees on a busy pool where the conversion ratios are consistently volatile, especially if the conversion ratios eventually return to ratios that prevailed at the time of the provider’s point of entry.
Users also benefit, since the Verus system does away with front-running, latency wars and gas price wars. Verus is an UTXO-based blockchain, with smart transaction capabilities, allowing for the parallel processing/solving of all DeFi transactions submitted in a block. This offers significant advantages to the Ethereum VM, which is perfectly designed to perpetuate races and zero-sum games, where the most savvy well-financed players gain all the advantage against the everyday user.
Verus has none of Ethereum’s downsides for users, like high gas fees and front-running. All users interact with the system knowing that they will get the fair price for their transaction: the exact same price for all buys and sells submitted by all users within that block.
Multi-reserve currencies are 100% backed by the currencies they contain in their liquidity pool. If they contain two currencies, the value is distributed 50/50%. If three currencies, 33/33/33%, and so on. Regardless of their price movement, this percentage always stays the same.
A primary use-case for the multi-reserve currencies is the conversion from one currency to another, without the need of any counterparty. Since there is always liquidity inside a multi-reserve currency anyone can convert at any time. For example: a person has ETH and wants to convert to VRSC. He converts first to the multi-reserve currency ETH*VRSC with ETH (one transaction), now he can convert the ETH*VRSC to VRSC (another transaction). Of course, in order for this to operate, ETH will need to be represented on the Verus blockchain. This will be handled by Verus’ decentralized bridging capabilities, and will be discussed in a future article.
There is a base fee for conversions of 0.025%, 100% of which goes to miners and stakers. There is also an additional implied volatility fee, which will be charged variably on imbalanced blocks of transactions, making blocks that change the price of a currency significantly pay more of an implied volatility fee, and ensuring that relatively volatile currency baskets offset any potential impermanent loss to liquidity providers risk with earnings from implied volatility fees.
At the same time, currency baskets that are less volatile relative to the constituent currencies will typically have lower implied volatility fees and lower earnings for liquidity providers to offset a lower risk of impermanent loss.
Value for Miners & Stakers: Economy of the Verus Protocol
Since Verus is an open, borderless and decentralised blockchain project, it is important to create value for the people who maintain the network; the miners and stakers. No value whatsoever goes to the Verus Coin Foundation, either through founder fees or developer fees. All fees are 100% recycled through mining and staking to create the groundwork for a thriving economy.
Mining and Staking VRSC
If a miner or staker on the Verus blockchain wins the competition to generate a new block, this is what’s included:
- Block reward of 24 VRSC (Halving to 12 VRSC takes place at block #1,278,000 [see halving countdown], with another halving every 1,051,920 blocks)
- VerusID: 20, 40, 60, 80, or 100 VRSC (What is paid to the miner or staker is dependent on referrals when creating a VerusID)
- Conversion fee of 0.025% (This is the cost of converting to and from reserve currencies, paid in the currencies of the conversions)
- Transaction fees of 0.0001 VRSC (For every transaction happening on the chain)
Miners of the Verus blockchain can choose to mine up to 22 other chains, simultaneously, created in the PBaaS ecosystem, without losing any of the hashing power if you were to only mine Verus. This practically multiplies your CPU or GPU power by 22! This process is called Merge-Mining and is available to everyone. When Merge-Mining and staking you can earn the following:
- Block rewards of 22 other chains
- Notarization fees in VRSC (To make chances higher that you will mine a chain, creators can choose to add VRSC to the block rewards)
Additionally, you can stake as many coins as you want in the PBaaS ecosystem.
To answer the original question: Is Verus poised to challenge Ethereum? If you consider all the technological advancements Verus is making, like the use of smart transactions for robust DeFi, scalability through PBaaS chain creation, the decentralized identity system that ties it all together and a thriving economy for miners and stakers, then, yes, Verus can challenge Ethereum.
Download the wallet now to try fractional reserve currencies on testnet. See the developments for yourself! If you need help or have questions, don’t hesitate to ask on Discord.
- Verus Website
- Get Verus Desktop
- Mining Software & Pools
- GitHub Repository
- Block Explorer
- CoinMarketCap, CoinGecko, CoinPaprika
- Download Infographics
Join the Verus Community
I thank community members allbits, Oink and miketout for their contributions