ICO, launch December 4, 2017 Davide Menegaldo No comments

Zen protocol – Smart contracts on Bitcoin blockchain

Zen is a protocol built with the aim to exploit smart contract functionalities using the Bitcoin blockchain. The instrument used to reach this goal is sidechain technology. Zen sidechain is a blockchain pegged with the Bitcoin blockchain, created in order to add features to Bitcoin and to exploit its characteristics, such as security and immutability, without altering its protocol.

The goal is to provide a platform where users can create and transfer advanced financial assets in a decentralized manner. With Zen it will be possible to create derivatives, for example an interest rate swap, a financial instrument in which two parties agree to pay each other interest payments calculated on the same amount of capital, one party with a fixed rate and the other with a floating rate. In this case two different tokens are created, one for the party entitled to receive fixed rate interest payments and another for the party receiving the floating rate interest payments. Payments are automatically managed by a contract that uses collateral in order to settle the obligations. If one party wants to close its position, it just needs to sell its token.

Zen protocol

Zen blockchain supports multiple assets: it is possible to create 2512 different tokens and send them with simple transactions. Among them there are Zen native tokens, the ones used to compensate miners, and Bitzen which represents Bitcoin credits on Zen.

Zen’s Proof of Work algorithm brings us a novelty: multi-hash mining. Every two weeks Zen native token owners vote in order to decide which hashing algorithm to use in the Proof of Work algorithm. This is a solution which tries to contrast mining centralization.

Transactions are not subject to the malleability problem, thanks to an infrastructure similar to Segwit. It lets assets to be transferred in a Zen-based Lightning Network and allows to exchange them with assets held on different blockchain through atomic swap transactions.

Smart contracts

Each contract source code is included in the blockchain, becoming immutable. In order to activate contracts users have to pay a sacrifice in the Zen native tokens. This sacrifice partially goes to the miner who activates the contract and the remaining to miners that check it during its execution.

Smart contracts are written in a dialect of the F* (F star) programming language. This allows to prove in advance how many resources a contract needs in order to be executed, avoiding to accidentally interrupt a contract because of lack of “gas”.

Zen smart contracts are pay-per-block, miners are paid only for blocks where contracts are active. A more efficient solution compared to Ethereum smart contracts, which pay fees during their whole lifecycle.

Smart contract on Zen protocol can read informations from Bitcoin’s and Zen’s blockchains, but when contracts need data from the real world, an oracle is needed.

Token Sale

Zen token sale started on the 30TH of November and will end on the 30TH of December. 20 million tokens will be created in the genesis block. 6.5 million tokens will go to the team, 1.5 million tokens will be stored as reserve for future use in support of the protocol and the other 12.5 millions are now for sale at a rate of 0.000284 BTC.

After genesis block other 80 million Zen tokens will be created through mining. 40 millions in the first six years, 20 millions in the second six years and so on, halving the money supply every six years.

 

Written by Gianluca Fant

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