What Is Core DAO? Features And Tokenomics
Tech Deep Dives

What Is Core DAO? Features And Tokenomics

Created 1yr ago, last updated 1yr ago

CoinMarketCap Academy takes a deep dive into Core, a layer-one blockchain utilizing a novel mechanism termed Satoshi Plus, developed by the Core DAO.

What Is Core DAO? Features And Tokenomics

Table of Contents

Core (CORE) is a turing-complete and EVM-compatible layer-one blockchain. It claims to leverage the Bitcoin hash rate and the delegated proof-of-stake (DPoS) consensus mechanism to create a blockchain that is secure, scalable and decentralized. Core uses a novel consensus mechanism labeled “Satoshi Plus” to “combine the optimal features” of the two.
Core launched on Jan 14, 2023. According to its own data, it has processed 5.7M transactions at the time of writing. That adds to 2M unique addresses created, as well as a significant social following of 1.6M Twitter followers and 210K Discord members.
Core attempts to solve the blockchain trilemma, which posits that a blockchain cannot be decentralized, secure and scalable at the same time.
The proposed solution is the Satoshi Plus consensus. It is supposed to guarantee decentralization through Bitcoin computing power and scalability through the DPoS consensus mechanism. As Core DAO is the first chain to implement this new algorithm, it aims to achieve the necessary network effects to serve as an accelerator for broader web3 adoption.
The Core blockchain is currently managed by the core team through control of the DAO. In the future, the governance process is supposed to progressively decentralize and task CORE token holders with creating and maintaining a community that believes in the project’s mission. The DAO foresees three stages of development for decentralization:
  1. Off-chain governance, which passes resolutions with a majority of DAO voters.
  2. Limited on-chain governance, which allows changing fixed parameters with on-chain voting.
  3. Full on-chain governance.
A precise timetable has not been established. Core also plans to become fully EVM-compatible to leverage scaling solutions like Zk-rollups. The team behind the blockchain is also considering a hub chain model, which would see the Core blockchain function as a layer 0 chain.

How Does Core DAO Work?

Core DAO pioneered the novel “Satoshi Plus” consensus mechanism, which is a complex mixture of Bitcoin’s proof-of-work and Ethereum’s proof-of-stake. The following illustration explains the intricate web of relationships of Satoshi Plus:

Major Roles in the Core Ecosystem

Validators: They are responsible for block production and checking transactions. Validators register and stake CORE to be eligible in the validator election.
Relayers: They are in charge of sharing information from Bitcoin to the Core network. Relayers also need to register and stake CORE.
BTC miners: They help secure the Bitcoin network. BTC miners can join the Core blockchain if they delegate their mining power to a validator.
CORE holders: They own CORE and can also join staking by delegating their holdings to a validator.
Verifiers: They check for any bad behavior on the network and can report it. Misbehavior of validators can lead to their stake being slashed.
Validator Election: The validator election is a way to pick the top 21 validators by using a score based on how much BTC hash power and CORE currency the validators have. It is updated every 200 blocks.
Round: A round is a period of time where validators take turns making blocks. At the end of each round, the rewards are distributed and new validators are picked.
Slot: A slot is a small part of a round where a validator gets a chance to make a block.
Epoch: An epoch is a time period when the system checks to ensure all validators are behaving correctly. Misbehavior can lead to removal from the validator group.
The Satoshi Plus Consensus: The Satoshi Plus mechanism uses the delegated hash power of BTC miners to Core validators to sync the blocks mined by the BTC miner with that of the Core network. Moreover, the DPoS consensus allows token holders to vote and elect the validator set. This allows small holders to participate in the network’s governance.

The validator election process follows an intricate formula, which selects validators from both the PoW and DPoS consensus mechanisms. The 21 validators with the highest score in the formula are elected for a period of 200 blocks. Validator misbehavior leads to slashing and jailing mechanisms. Blocks are mined every 10 minutes like in the Bitcoin network.

The rewards are distributed among validators and the System Reward Contract. 90% of the rewards are currently paid out to validators. The System Reward Contract pays out rewards to the relayers and the verifiers.

The Core DAO Team

The Core team remains anonymous. According to Core DAO, the idea was sparked by “a debate between two friends.”  The veracity of this claim cannot be confirmed at the time of writing:

View post on Twitter

Core DAO Tokenomics

CORE is the native utility token of the blockchain. It is used for staking and paying gas fees. Core follows Bitcoin’s token model, with a total supply of CORE of 2.1 billion. It also promises to burn a percentage of the block rewards and gas fees, similar to Ethereum's model. The token emission schedule will be paid out over 81 years. The network hopes to incentivize Bitcoin miners to delegate their hash power to the network after significant mining rewards on Bitcoin stop around the year 2040.

The token supply is allocated as follows:

  • Node Mining (839.9M CORE tokens; 39.995% of the total supply): distributed over 81 years.
  • Users (525.6M CORE tokens; 25.029%): Core launched a first airdrop in February 2023.
  • Contributors (Existing and Future) (315M CORE tokens; 15%)
  • Reserves (210M CORE tokens; 10%)
  • Treasury (199.5M CORE tokens; 9.5%)
  • Relayer Rewards (10M CORE tokens; 0.476%)

Core Compared To Other Blockchains

Core DAO stresses that it significantly improves upon other blockchains and combines the strengths of each while mitigating the weaknesses. The proof is in the pudding, but here is the comparison of Core to other blockchains.

Core vs Bitcoin

Bitcoin was the first popular blockchain and the first blockchain to introduce proof-of-work. It has become the most decentralized chain but can only process seven transactions per second. According to Core, the Core blockchain improves upon Bitcoin with higher throughput.

Core vs Ethereum

Ethereum is the most popular smart contract blockchain and invented the Ethereum Virtual Machine. Ethereum can also process more TPS than Bitcoin but still remains constrained to 15 TPS. Core aims to improve upon Ethereum with better scalability and less centralization, which it claims remains a risk even with Ethereum’s scaling plans.

Core vs Solana

Solana is a high-TPS chain with short block times. However, the requirements for validators far exceed those of other blockchains. Moreover, the network availability has lagged behind that of other chains. Core aims to do better in both regards.

Core vs Polygon

Polygon is a layer-two chain for Ethereum and leverages proof-of-stake and sidechains to achieve higher throughput. However, it is not as decentralized and stable as it could be, something that Core promises to tackle.

Core vs BNB Chain

The BNB Chain was originally forked from the Ethereum chain and uses a Proof of Staked Authority consensus mechanism. It has faster transaction times and higher throughput, although that comes at the cost of decentralization.
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