Chainflip: Revolutionizing Cross-Chain Swaps with Advanced Node Operations
We are more than excited to announce that we are Node Operators for one of Chainflip’s validators!
Chainflip operates as a Cross-Chain Liquidity Network, fundamentally designed to streamline swapping between L1 crypto assets. This protocol depends on a unique system of 150 Validators. These validators collectively manage simple, yet efficient, smart contracts known as Vaults across multiple blockchains. This network forms the backbone of the Chainflip Settlement layer.
As part of this group of validators, Sensei Node leverages its technical expertise to enhance Chainflip’s network performance, ensuring robust and secure operations.
The State Chain: Chainflip’s Backbone
The base of Chainflip's framework is the State Chain, a Substrate-based Application Specific Blockchain. Developed by Parity, the State Chain operates independently from the Polkadot relay network, serving as the central repository for all protocol activities. It records, executes, and initiates protocol events, functioning as the core database for the Chainflip ecosystem.
Integrated Layers: Accounting and Settlement
Chainflip's design integrates the Settlement Layer with the Accounting Layer. The first one utilizes the State Chain to track balances, process events, and execute instructions. Chainflip’s accounting, inclusive of its Just In Time (JIT) AMM—inspired by Uniswap V3—operates entirely within the State Chain. This design allows for virtual trading of funds, settled using actual assets securely stored in native vaults.
Validators: The Pillars of Chainflip
The validators run the Chainflip State Chain node and the Chainflip Engine (CFE), an advanced off-chain processing module. Becoming a validator is permissionless, contingent on securing enough FLIP through auctions to join the Authority Set.
Each validator is integral to the consensus mechanism of the State Chain, contributing to the Threshold Signature Scheme (TSS) key generation and signing. Moreover, validators play a crucial role in witnessing, effectively serving as oracles for the network by monitoring supported external chains.
Validators within Chainflip have distinct responsibilities based on the network layer they operate in. In the accounting layer, their duties include maintaining the State Chain and executing critical events. In the settlement layer, validators engage in TSS key generation for vault control, sign transactions, and monitor external chain activities.
Critical Processes: Ingress and Egress
Validators are tasked with witnessing external chain events and integrating them into the State Chain, a process known as Witnessing. In the Egress phase, validators execute the broadcasting of transactions, strategically batching them to optimize gas fees and reduce the frequency of signing ceremonies.
Innovative Technology: Threshold Signature Scheme (TSS)
Chainflip's security is bolstered by the FROST multisig scheme, a TSS framework utilizing Schnorr signatures. This technology enables efficient multi-party computation, allowing the network's 150 Validators to secure all Vaults uniformly.
Broadcasting Mechanism
In Chainflip's system, Validators play a critical role in transaction broadcasting. A Validator is deterministically nominated from the Authority Set to broadcast the signed transaction to the target chain. In cases where the nominated Validator faces issues like insufficient gas or connectivity problems, they must report the failure on the State Chain. Subsequently, another Validator is chosen for broadcasting. The network monitors for the successful external submission of the transaction. A failure to witness the broadcast within a designated timeout leads to penalties for the nominated Validator and the selection of a new one. This process iterates until successful completion.
Validator Auction Dynamics
Validator slots in Chainflip are allocated based on Auction outcomes. Every Auction cycle concludes with the highest bidders who have completed Keygen being selected for the next Epoch's Authority Set. A rotational handover from one set to the next ensures continuity and integrity of the network. Bids are placed from Validators' State Chain accounts, with funding via the State Chain FLIP Gateway. Following Auction resolution, successful bidders are bonded to the minimum active bid value, with the option to withdraw excess stakes between Auction cycles.
Reward System
The primary incentives for Validators come from Authority Rewards, distributed each time a block is authored on the State Chain. These rewards are uniform across all Authority members during an Epoch, irrespective of individual stakes.
Governance Processes
To mantain the decentralized nature of Chainflip, they come out with a balanced process. The system is designed to prevent unilateral execution by any single entity. Governance keys, which can be part of various multisigature schemes, are nominated by the Validator network. These keys can be managed by a range of entities, from DAOs to individuals, known collectively as "Councils." Validators can propose new Councils, reflecting the protocol's decentralized ethos.
The protocol employs two distinct Governance Keys:
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The Governance Key: Managed typically by the protocol’s primary developers or a representative body, this key carries significant responsibilities.
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The Community Key: Serving as a counterbalance to the Governance Key, this key is held by community members separate from the developers. It lacks standalone abilities but is essential for authorizing the Governance Key's use of advanced security and governance features.
The dual key system ensures balanced representation of community interests, especially in scenarios where Validators might not fully align with the broader community of users, liquidity providers, and developers.
Conclusion
As Node Operators within the Chainflip network, we are committed to supporting this protocol's vision. Chainflip represents a forward-thinking solution for cross-chain swaps, balancing retail user accessibility with a strong emphasis on decentralized processes and robust security.
About SenseiNode
SenseiNode is the first blockchain infrastructure independent service provider in Latin America.
We automate and simplify the deployment and monitoring of nodes on leading protocols, providing access via our APIs to organizations looking to build their blockchain infrastructure with a high availability and low total cost of ownership.
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