Radix DLT CEO Piers Ridyard Q&A with Crypto Bureau
Q1. For some new members of Radix, Piers will give us a brief introduction about Radix.
Radix is the Smart Money Protocol, a next-generation layer 1 platform that does not have the limitations of current layer 1 platforms. Radix has demonstrated 1.4 million TPS in 2018. This is the world record still today. Our new consensus algorithm ‘Cerberus’ is able to theoretically scale infinitely. We will deliver this capability in 3 steps: from 50 TPS to thousands of TPS, to unlimited TPS. We have a strong team with backgrounds at ConsenSys, Microsoft, Nvidia and Y-Combinator who are experienced in delivering complex products. All of our last milestones were delivering ahead of time.
A big focus for us are developers. With Radix, developers can build fast without the massive security and exploit risks on Ethereum. Some information around this is already public, such as the Component Catalogue and Blueprints. We are excited to share more information soon. Also we think that we are incentivizing the right people in our network, the developers for creating valuable components and the validators for securing the network. Scalability is important of course, on Radix dApps can scale to millions of users without friction because we don’t have a built-in TPS limit thanks to our innovative technology.
At Radix we have big goals, we want to fundamentally change the current financial system, because we think it is not a fair system. It is time to build a new financial system and Radix wants to be the platform on which the new decentralized financial system is built. To help with this, Radix has founded the GoodFi Alliance (GoodFi.com). The goal is to bundle the industry’s resources to educate and onboard the next 100 million people from the traditional financial system to DeFi. Many big players have joined us, like Aave, Chainlink, mStable and dozens of others. We are very thankful and are confidently looking into the future. We have 3 major milestones coming up with our Cassandra research network, our Betanet at the end of April and our mainnet by end of Q2. Exciting times at Radix!
Q2. Achieving global scalability while maintaining security and decentralization” is known as the impossible triangle of the blockchain. Radix claims to solve this problem and maintain the composability of the entire platform. How to do it.
To achieve (practically) unlimited scalability Radix employs sharding of their network with 2²⁵⁶ shards, which is roughly comparable to the total number of atoms in the known universe. Each of these 2²⁵⁶ shards can process around 3000 TPS independently.
Due to the large amount of shards nearly all transactions are cross-shard transactions by default.
Radix’s cross-shard consensus algorithm Cerberus ensures atomic composability for these transactions across the entire plattform. Cerberus is highly parallelized, atomic and asynchronous which enables fast and atomic cross-shard transactions at global scale.
Cerberus dynamically braids the involved shards of a cross-shard transaction together and the whole transaction either succeeds or fails together in an atomic way.
Q3. Radix is positioned to build a Layer 1 platform for decentralized finance. Compared with other Layer 1 platforms on the market such as Near, what are the differences and advantages of Radix with the main sharding expansion technology?
The unique advantage of Radix’s sharding approach is that it is the only one which does not break atomic composability while achieving linear scalability. All other competing sharded layer 1 platforms sacrifice composability to get some scalability via sharding, which is not sustainable.
Near’s scalability is limited because it requires too many nodes (1 million nodes are needed for only total 10K TPS) and also breaks atomic composability.
Polkadot introduces sharding with parachains, but breaks atomic composability between parachains/shards, because a smart contract can only send messages to another parachain and Polkadot doesn’t support the concept of atomic cross-shard transactions.
Elrond has shards, but their metachain will become a bottleneck in the future, because every cross-shard transaction needs to be initialised and finalised on their metachain and also Elrond does not support atomic composability across shards.
Cosmos has shards, but dapps are separated on side-chains which breaks atomic composability between them.
Ethereum 2.0 canceled their layer 1 sharding efforts (or delayed it far away in the future) and are going for layer 2 scaling now. This means smart contracts will not be able to be executed in their layer 1 and their layer 2 scaling approach sacrifices atomic composability.
Avalanche, Cardano, Fantom, Solana, Algorand and Ethereum 2.0 are not sharded in the first place and therefore will run into bottlenecks sooner or later.
Without sharding there is an upper limit for the transactions per second, because every single node needs to process every transaction at least once and additionally there are storage issues, since the ledger state grows over time to a point where you either can’t handle it anymore on a single node or you need a supercomputer which leads to centralisation.
Q4. Even if Radix’s network, sharding technology, “components”, etc. can support dapp operations very effectively, why would dapps on other chains (such as Ethereum) migrate to Radix?
Radix believes in enabling developers to build fast without breaking things. This is not what is happening today. Every month millions of dollars of user funds are being stolen/hacked/lost, and developers are spending 90% of their time debugging and security testing rather than building. This is the legacy of Solidity based developmen
Fundamentally decentralized finance is dealing with people’s money. When you are dealing with people’s money it is really important that the system is secure. The Radix development environment, Scrypto, allows the developer to create programmable state machines (the same secure systems that is used in traffic light controls or nuclear power stations) that are much safer and faster than Turing based solidity smart contracts.
These finite state machines are pushed onto the Radix ledger as “Components” and can be used to create anything from simple tokens to full decentralized autonomous lending markets like Aave or Compound.
Once a component has been created, it can be re-used by any developer, short cutting development time from weeks to hours, and creating an ever-growing library of secure financial building blocks. This moves from every developer needing to deploy huge smart contracts, to developers only needing to develop the small pieces of extra functionality that makes their project special. This is already how most professional software development is done — open-source libraries form the bedrock of most commercial applications today!
Lastly, we firmly believe that the financial system of the future should reward those that make it better. Every time a component is re-used by a developer, the Radix component system allows a royalty to flow to the developer that originally created that component, making sure that components are more than just a great system for building dApps quickly: it is also an entire system of royalties that rewards great developers for their hard work in improving an ecosystem.
Q5. How does Radix make the defi dapp on Ethereum migrate to the Radix network?
Gas costs are killing the usability of the Ethereum ledger. Solidity is a nightmare for DeFi developers. Right now, most of the Ethereum ecosystem is actively looking for ways to mitigate the scalability issues, and every single project is constantly trying to mitigate the security issues of solidity. Layer 2s break the composability that is so critical to DeFi, and projects like Polkadot, Avalanche and Ethereum 2.0 do no better on this front.
To ease the transition from Solidity to Scrypto, one of our partners, Noether, is creating a system that allows people to migrate their Solidity code across to the Radix network: https://www.radixdlt.com/post/object-computing-and-noether-dlt-develop-ethereum-based-smart-contract-platform-for-the-radix-ledger/
In addition to this, Radix recently launched the GoodFi initiative with some of the leaders in the DeFi space to help bring 100m users into DeFi by 2025: https://www.radixdlt.com/post/radix-launches-goodfi-alliance-with-chainlink-aave-messari-mstable-more/
Q6. Will the Ethereum node be built to be compatible with EVM, solidity, ERC20 asset cross-chain operations?
We are building a number of bridges between the Ethereum and Radix ecosystem, including supporting the renVM for decentralized bridging services, and services such as Copper to bring many more assets across to the Radix ecosystem from Ethereum ERC20s and beyond:
Q7. Radix mentioned in the white paper that Radix proposed a new consensus mechanism Cerberus. Can you explain to you what is the difference between Radix’s “Cerberus” and others?
Cerberus, the Radix consensus algorithm, is a cross-shard consensus algorithm. This means that inherently to how it functions it is working across multiple shards, rather inside a single shard only. Non-cross shard consensus algorithms on the other hand process the transaction in one shard first then packages and broadcasts it. All implemented as different steps.
To explain — let’s say that there is a transaction that touches three shards in the network (as the shard space is SO large, all transactions will always touch at least two shards). Because all transactions are deterministic, the submitting node can see which three shards the transaction is touching. Because validators are deterministically mapped to the shard space and must report what shards they are servicing as part of their staking process, the submitting node also knows ALL the validators that are involved for the transaction to be confirmed.
Note: a submitting node is just a full node that the user happened to have connected to as the entry point into the ledger to submit a transaction. Submitting nodes are not a special node type in the network, and any full node can be selected as a submitting node by the user.
The submitting node broadcasts the transaction to the relevant validator nodes for those three shards. Next Cerberus consensus is applied to the transaction. This consensus operation checks that the relevant transaction is valid across all three shards before all nodes in the validator set commit the transaction. If the transaction fails on one shard, then it fails on all shards.
This is how Cerberus ensures atomicity between shards for complex transactions like flash loans or other DeFi native operations.
Crucially — as this is NOT a blockchain, any other transactions that also touch these validators do not have to wait for this consensus operation to be finished. Validators can process hundreds or thousands of consensus events in parallel, meaning that these cross shard operations do not intrinsically slow down the network as a whole.
Q8 We have seen the introduction of the developer royalty system function in the Radix network. How does the system work? What problem does it solve?
On Ethereum there is no developer royalty system and also no catalog for smart contracts. This means smart contract developers can only share the source code of their smart contracts and everyone can use that but the original developers are not paid for their efforts.
On Radix smart contract developers can develop components, publish them in the component catalog and others can use these components in their smart contracts. If their components are used by others the original developers are paid by the users of their components and are therefore encouraged to develop and publish high quality components others like to use.
Q9. After the explosion of DeFi, security vulnerabilities have attracted much attention. Radix claims to reduce hacker attacks and vulnerabilities on DeFi. What technology is this based on?
Radix uses finite state machines instead as smart contracts which are much more secure by design than standard turing complete smart contracts like on Ethereum. Finite state machines (FSM) are not new and already used in security critical areas like traffic controls or nuclear power stations.
The main difference is that in a FSM you are explicitly defining states with transitions between them and most importantly these states are finite. On the other hand turing complete based smart contracts like Ethereum’s Solidity have an infinite amount of states which is obviously much more prone to errors and exploits.
Q10. The last question is believed to be of concern to the audience. As the platform token in the Radix project, eXRD, please introduce the economic model of the token. Where else can we obtain eXRD tokens?
The eXRD token will be swapped 1:1 for the Mainnet token XRD. XRD has a fixed supply, and thanks to Proof of Stake around 50% of the tokens are expected to be staked and out of circulation. While you stake XRD you will still be able to have the capital liquid and available for you, this is possible via Stakehound’s Liquid Staking. Stakehound is a very promising project incubated by Radix. Various DeFi use cases will also lock up some of the remaining circulating tokens. Additionally there are many on-ramps to EXRD, such a partnership with REN for wrapping tokens and a partnership with major custody player Copper. We have also decided that a percentage of each Tx fee will be burned. As you can see there are many dynamics in play to make XRD a valuable token.