With a record-breaking $13B Binance launchpool campaign and over 350 projects in its Innovator Program, we take a deep dive into Saga — a layer-1 that allows projects to launch their own L1s.
What Is Saga? The Appchain Developer Portal
In the beginning, most of the major blockchains were built as monolithic chains — a single chain to handle all core functions, from consensus to execution, to settlement and data availability. This model worked, at least in the early days, when usage was relatively low, posing no threat to the chains they operated on. The first issues started to show in the ICO boom of 2017 on Ethereum and then again later during the 2020-2021 bull market, where Ethereum gas fees spiked tremendously, pushing into the hundreds and on occasion, even into the thousand range.
This shifted the focus of blockchain developers towards scaling solutions.
The Scaling Wave
Ethereum’s roadmap had already laid out an idea of scaling Ethereum via rollups. Rollups took execution of transactions to a separate chain, known as a Layer-2 chain. As the name implies, rollups rolled transactions into batches before posting them to the Layer-1 chain, in this case, Ethereum, allowing significant reduction on gas fees for the end user.
Source: Peter Watts (link)
However, Ethereum was not the only one working on scaling. In the Cosmos ecosystem, the concept of application chains, or appchains for short, was also quickly gaining popularity. Appchains were chains built specifically for a single purpose such as a decentralized exchange (DEX) or a lending platform. This allows much more targeted customization and flexibility for developers when designing their appchain.
This concept later became popular in other parts of the crypto space as well with Avalanche releasing subnets, Polygon enabling rapid deployment of zero-knowledge Ethereum Virtual Machine (zkEVM) chains via their chain development kit, and even just applications deploying their own Ethereum L2 outright to meet their business needs.
Source: Avalanche docs
But even with the plethora of options available, developers still struggled especially if they were looking for highly customized solutions.
Enter Saga.
How Does Saga Work?
Saga is a one-stop portal for developers looking to deploy their own specialized appchains and realize their crypto vision. Saga provides the support required to easily deploy a dedicated blockchain, known as a chainlet, making it as easy as deploying a smart contract. In fact, that is exactly how it works.
A developer deploys their compiled smart contract binary to the Saga Mainnet, which will then be processed by Saga validators to automatically deploy the respective chainlet containing the smart contract.
Source: Saga Litepaper
Since each chainlet only contains a single set of smart contracts, this gives the developers much more flexibility in development. Each chainlet does not share blockspace with any other application, which also leads to a more predictable fee market on the chainlet. Additionally, chainlet components are virtual machine (VM) agnostic, meaning that developers can leverage any virtual machine out there, be it the Ethereum Virtual Machine (EVM), Solana VM, MoveVM and more. Moreover, each of the Saga components can be updated independently from each other and from the Saga mainnet, granting greater upgradability to the system.
Source: Saga Litepaper
One of the main struggles of appchains in the early days was the difficulty in securing the chain with their own validator set and token. With Saga, this is no longer necessary as Saga chainlets can rely on Saga’s validators to secure all of the chainlets via shared security. These validators are managed using Saga’s validator orchestration tools to ensure that the validators are able to automatically manage and process thousands of chainlets running concurrently on Saga.
Source: Saga Litepaper
Moreover, each chain is parallelized, meaning that chainlets do not compete with each other for resources and run independently of each other. Leveraging this concept, a single application could also shard their workflow into multiple chainlets too, for example, an automated market maker sharding their application into one chainlet for each of their liquidity pools, creating near limitless scaling.
Saga’s initial focus will be gaming and entertainment, due their urgent needs for high runtime environments, but DeFi applications are also welcomed to leverage Saga’s technology to unlock new primitives for the DeFi space.
Saga Airdrop and Tokenomics
Earlier in March, Saga announced the launch of the Saga mainnet, alongside the launch of their genesis airdrop.
The airdrop was designed to pay homage to their roots, granting tokens to the Cosmos, Polygon, Avalanche and Celestia communities by rewarding their respective stakers. This was decided due to each of the respective project’s commitments to the appchain future, namely: Cosmos with the initial appchain concept, Celestia for their contributions to data availability, Polygon for the Polygon chain development kit (CDK) and Avalanche for the innovation of Avalanche subnets.
On top of that, tokens were also granted to winners of the Play-to-Airdrop Season 2, which ran from January to February 2024, as well as the developer tournament which ran in the same period.
The SAGA token went live on April 9, alongside the Saga mainnet. The token’s max supply is 1 billion tokens, with an initial circulating supply of 90 million tokens, or 9% of the total supply. Majority of these tokens are allocated to Ecosystem and Development, Investors and Core Contributors, which will be allocated 30%, 20% and 20% of the token supply respectively.
Source: Binance Report (link)
For investors and core contributors, their allocations are subject to a 1 year cliff, and subsequently unlocks over the next 2 years. For the remaining allocations, the tokens will continue to vest over time, with the supply being fully unlocked after 7 years from the token generation event (TGE).
Source: Binance Report (link)
Binance Launchpool and Token Launch
Binance announced the launchpool for the SAGA token on April 4, as the 51st launchpool project. Users who stake BNB or FDUSD in separate pools for four days can farm SAGA tokens, with the pools until April 9. Depositors will receive their respective token allocations from a pool of 45 million SAGA tokens, or 4.5% of the total token supply. On April 9, the SAGA token went live for trading on Binance.
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