This article was contributed by Alex Boyd
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I last wrote about the Oasis Network back in March 2021. The article was titled “A Rose on the Rise: A Quiet Crypto Contender”. At the time, the native cryptocurrency, Rose, was hovering around the $0.2 mark. By November 2021, and in a matter of 8 months, the price had more than doubled to $0.41 (as shown in the below chart). Then, along with the rest of the crypto market-wide bullish surge, an all-time high was recorded on January 15, 2022 — $0.6.
Naturally, this exciting price action prompted some questions — I found myself thinking about why I was initially drawn to the Oasis Network in the first place. Here are some of the factors that had caught my attention:
- The Oasis Network has the largest university network in the blockchain sector with over 25 universities and clubs operating in 5 continents.
- More than 6,700 investors participated in Oasis Network’s “ROSE Garden” token drop according to the initial token sale platform CoinList, making Rose the second-largest offering on the US-headquartered platform by the number of participants.
- Prominent names in the smart money space were involved: a16z, Pantera, Binance Labs, Huobi Capital and SalesForce Ventures to name a few.
Why did I think that Rose was on the rise? Fast-forward a year to 2022, I figured it was time to write an update article and delve into the following:
- Significant Updates.
- How the Oasis blockchain works.
- A quick look at tokenomics.
- The network’s ultimate use case.
5 Significant updates
- $200M Ecosystem Fund — In addition to Binance Labs, other notable VC firms have shown support including Hashed, Jump Capital, Dragonfly Capital and Draper Dragon. This means extremely well capitalized and connected firms have a vested interest in Rose’s success.
- Wormhole integration — Wormhole is a message-passing protocol that unites multiple chains including Ethereum, Solana, Terra, Binance Smart Chain, Polygon, Avalanche and Oasis. You can now bridge blue-chip assets across to the Oasis Network, boosting the interoperability and usability of the network.
- Exponential community growth — Since mainnet launch in November 2020, the community has grown 10x in size (according to Ekin Tuna, Head of BD at Oasis). The metrics include 160K network users spanning 24 countries and including 300 global ambassadors.
- DeFi plans — Recently the automated market maker (AMM) decentralized exchange (DEX), Yuzuswap, reached a total value locked (TVL) of +$180M (at the time of writing Cardano’s Sundae Swap had a TVL of $117M). Apparently, this is just the beginning. Ekin Tuna mentioned that the network’s aspiration is to build a huge DeFi ecosystem where the focus will be around play-to-earn gaming and NFTs. It seems like they’re targeting the areas with the biggest total addressable markets.
- Smart money is bullish — The Rose token was the second most commonly held asset by crypto funds in Q4 of 2021, according to Messari. This confirms the growing institutional interest in the Oasis Network, as highlighted in point 1 above.
How does the Oasis blockchain work?
This section is for the blockchain geeks out there. For those of you who are newer to crypto or simply fancy a refresher on some of the jargon, I’ve made a point to expand on some of the more technical terms.
What is the Oasis Network?
The Oasis Network is a Layer-1, privacy-focused, proof-of-stake, smart-contract blockchain which is built using the Cosmos SDK. Let’s unpack these terms.
Layer-1: A base layer blockchain like Bitcoin, Ethereum, or Terra.
Privacy-focused: Unlike Ethereum where all transactions are publicly available, on the Oasis blockchain, it’s possible to shield transactions/computations so that users and applications are always in confidentiality mode.
Proof-of-stake: This describes a type of consensus mechanism (i.e. a way to validate transactions). In proof-of-stake, validators stake tokens to secure the network and earn rewards.
Smart contract: Also known as decentralized applications, you can think of smart contracts as apps in the Apple AppStore. In the way that apps run on your phone, smart contracts run on the blockchain.
The Oasis Network architecture
The consensus layer is separated from the contract execution layer (ParaTime Layer). There is a built-in interface connecting the two layers for privacy-preserving computation.
Similar to Polkadot, the two layers allow for many computational environments called ParaTimes to exist in parallel — each communicating their own transactions to the Consensus Layer.
The Consensus layer is a scalable, high-throughput, secure, proof-of-stake consensus run by a decentralized set of validator nodes. This layer focuses on blockchain security and scalability, primarily concerned with the enforcement of network rules.
The ParaTime layer is where applications run their computations. It is versatile and flexible in order to support different computational environments. This means that each ParaTime can implement its own logic. For example, what transactions look like and how data is stored can be different for each ParaTime.
Let’s look at an example of a ParaTime. The above image shows “Emerald” the EVM (Ethereum Virtual Machine) compatible ParaTime. The benefit of this compatibility is easy integration with EVM-based dApps (decentralized apps) and >1000x lower fees than Ethereum. It is also somewhat decentralized with 56 Oasis validator nodes. Ethereum is a considerable leader in the smart-contract arena and compatibility with Ethereum’s network is crucial to optimize users, liquidity and marketability.
Built using Cosmos SDK
Since Oasis was built using the Cosmos SDK, it will eventually be able to connect to the broader ecosystem of Cosmos-enabled chains (called zones) using the IBC (Inter Blockchain Communication). The IBC can be thought of as TCP/IP (the protocol that enables the internet to function) but for a network of independent blockchains. This is exciting because the Cosmos network is growing rapidly bringing a wealth of new users and liquidity — some of which are likely to use Oasis for its privacy offering.
In his recent article, Haseeb Quereshi (Managing Partner of Dragonfly Capital) wrote that one of the ways that blockchains are going to be able to scale in the future is through “interoperability networks” — like Cosmos. A pattern is emerging where high-quality blockchains choose to be part of the Cosmos network due to its interoperability characteristic.
A quick look at the tokenomics
Rose is the native token of the Oasis Network blockchain. It has three main utilities:
- Transaction fees.
- Staking (currently around 10% per annum).
- Delegation at the consensus layer.
The maximum supply of the ROSE token is 10 billion. This supply will be distributed among 6 groups of people over time:
- Approximately 2.3 billion tokens (23.5%) will be used to pay staking rewards over time.
- 23% of tokens were sold directly to backers, before launching the mainnet in 2018.
- 20% of the tokens were distributed among the core contributors of the project.
- 10% of the tokens were allocated to the Oasis Network (Foundation Endowment).
- 18.5% of the tokens were (or will be) distributed by Oasis Network, as developer grants, or community incentives to Community & Ecosystem.
- 5% of the tokens are dedicated to funding programs and services provided by key strategic partners in the Oasis Network.
At the time of launching the mainnet, only 1.5 billion tokens out of the max supply of 10 billion tokens went into circulation. According to the Oasis Network roadmap, the remaining tokens will go into circulation over a 10-year schedule (see the following image).
What is the network’s ultimate use case?
I recently wrote an article on a privacy application called ‘Void Protocol’, the importance of privacy, and why it is not open to discussion.
Here’s a snippet from it:
Privacy is a fundamental human right (laid down by the UN), essential to autonomy and the protection of human dignity, serving as the foundation upon which many other human rights are built.
A society where privacy is absent is a society where power imbalances thrive. Inevitably, certain groups can either monetize or weaponize your data as occurred in the two recent geopolitical events (Canada and Russia), leading to an invasion of financial privacy.
It is your choice whether you control your financial data.
Now, back to Oasis and how it enables privacy as a design principle.
In terms of the implementation mechanism of privacy protection, Oasis Network uses a trusted execution environment (TEE).
A TEE is simply an impenetrable black box, where computation is carried out. For example, if a user interacts with an application and issues a transaction, this transaction request and the user’s data will be sent into the TEE for computation. No developer or validator can see what goes on inside the TEE and so there is no data spill. When the computation finishes, the data is encrypted and sent for validation (addition into the blockchain).
The Oasis Network achieves scalability in two key ways:
- By separating the consensus layer from the application layer.
- By means of parallel processing of ParaTimes.
It’s important to note that Oasis is able to achieve this partly due to its low number of validators (110 in total — by virtue of the Cosmos Tendermint design) in comparison to Ethereum V2 with >200K. That said, some projects/users may not mind this so long as the blockchain is immutable and the cost of manipulating it is high enough to discourage bad actors.
At the time of writing the total staked value was $1.2B, which means a bad actor would need to acquire more than a billion dollars’ worth of Rose to even have a chance at corrupting the network (which is an extremely slim chance due to misbehaving validators getting their tokens slashed).
Oasis versus competitors
Essentially, the Oasis Network’s unique selling point (USP) is that it offers versatility (you can build both permissioned and permissionless ParaTimes), built-in privacy and instant finality.
A permissioned blockchain requires user approval to join and is generally used for enterprise purposes, whereas a permissionless blockchain is used for public purposes that require less transparency and control.
Privacy has been covered above.
Instant finality is quite a strong USP. Finality is the assurance or guarantee that cryptocurrency transactions cannot be altered, reversed, or canceled after they are completed.
To put this into perspective, if you were to have to wait for 10 minutes every time you wished to purchase anything, it would quickly become very inconvenient to go shopping. Also, in the financial sector, companies need to know, within the shortest possible time frame whether they own certain assets.
Given, the Oasis network can offer instant finality and has the option for permissioned blockchains, it makes the blockchain practical and usable by enterprises.
There is no surprise then to see Oasis has commercial relationships with companies such as BMW and Nebula Genomics.
From a trend perspective, the privacy narrative will provide fertile ground for the Oasis Network to blossom in the coming months/years.
To reiterate, from an institutional perspective, the Rose token was the second most commonly held digital asset at the end of Q4 2021. There is clearly something unique about this project (acknowledged by smart money).
If you’re reading this, you’re still early in the game. Given the international ambassador team, global partnerships, huge financial resources and sound technology — it seems likely that the Rose token is going to keep on rising.
This article was contributed by Alex Boyd