Coreum: A Modern Layer-1 Blockchain — Fast and Smart

Backed by the Sologenic Development Foundation

Coreum Blockchain

Abstract

In this document, we present the upcoming new layer-1 blockchain network “Coreum”, its architecture proposal and the details of the upcoming $CORE Airdrop for the Sologenic community and the $SOLO holders as the initial backer and the most important use-case of Coreum.

Coreum is a 3rd generation, layer-1 blockchain built to serve as a core infrastructure of future Blockchain applications.

With No Initial Coin Offerings (ICO) or Token Sale, Coreum is an open-source project built to be 100% community-based, allowing this technology to support extensive future growth in Decentralized Applications (dApps) and DeFi space within the whole blockchain ecosystem.

Coreum’s native token $CORE will initially be airdropped to the Sologenic community and eventually, the community can decide how the distribution continues in future phases.

It’s notable to mention that Sologenic ecosystem and $SOLO will co-exist on both of the XRP Ledger and the upcoming Coreum blockchain.

Disclaimer: This document does not constitute nor imply a prospectus of any sort. No wording contained herein should be construed as a solicitation for investment. Accordingly, this paper does not pertain in any way to an offering of securities in any jurisdiction worldwide whatsoever. Rather, this paper constitutes a technical description of the functionality of the Coreum Blockchain and its various sub-components. The final White Paper is to be released in Feb 2022. Visit www.coreum.com for more information.

* This is not a Whitepaper for the Coreum Blockchain, a detailed technical paper will be released in Feb 2022.

*This document is under heavy modification and technical details are subject to change without notice.

Meet Coreum

Table of contents

· Motivation
·
Architecture proposal
·
Validators
·
Transaction Fees
·
Validator Incentives
·
Validator Rewards Pool
·
Burn Mechanism
·
Staking
·
Delegating
·
Slashing/Retribution
·
Governance
·
Fungible and non-fungible token Issuance
·
Smart contract (WASM)
·
Interoperability & bridges
·
Decentralized exchange (DEX)
·
Decentralized Apps (dApps)
·
Use cases
·
Token Economy
·
Allocation
·
Distribution and airdrop of $CORE for $SOLO holders
·
When will the Snapshot be taken and the CORE tokens be distributed to SOLO holders?
·
When/How will the CORE Airdrop be Distributed?
·
What if you hold your $SOLO on Centralized Exchanges?
·
When/How can I trade $CORE?
·
How to stay tuned for further updates?
·
Roadmap
·
Coreum Community
·
Open-Source Dev Contribution

Motivation

Sologenic was initially launched with the purpose of on-demand tokenization of assets such as stocks and ETFs that could be traded on a fast and reliable Decentralized Exchange. The obvious choice at the time was the XRP Ledger which enabled us to experiment with TrustLines (IOUs) and the native built-in Decentralized Exchange.

The Asset Tokenization Platform or ATP (https://sologenic.com) has been in simulator mode since early July 2020 and it has been used and pilot tested by many enthusiasts in the crypto industry. At Sologenic, we have a “product first” approach that can be used by the masses and be relied upon. Being able to build these products requires a reliable infrastructure without limitations.

Shortly after the launch, we started coming up with new ideas and products to be built on the Sologenic Ecosystem but we were instantly blocked due to the lack of underlying features provided by the XRP Ledger such as smart contracts and issued currency escrows.

We came up with different ways to avoid them, but many other ideas were dropped as they would introduce a centralization piece to the project.

We looked at many different blockchains and we could not find a perfect solution for our problems. For example, Ethereum is a great blockchain, but its current underlying infrastructure is not yet natively scalable. The high transaction fees make it almost impossible to be widely adopted by DeFi systems. Some other blockchains are fast and cost-efficient but lack modern architectures such as smart contracts and some are thought to be centralized due to massive node requirements that only a handful of operators can afford.

We decided to create a new layer-1 blockchain, that not only helps the Sologenic Ecosystem grow but to help other DeFi developers and to be served as a core infrastructure for the future of decentralized applications.

This is how Coreum was born!

Coreum Design Principles:

  • Highly efficient
  • Fast
  • Cost-effective
  • Green (99% Lower Carbon Footprint)
  • Support for Smart Contracts
  • Built-in Decentralized Exchange
  • Built for tokenization
  • Fully decentralized
  • Interoperable

Architecture proposal

As the blockchain industry grows faster every day, the amount of resources spent on developing this technology also grows at a rapid pace. Just like how software programming languages were primitive in the early days of computing, these days developers can use tools and abstractions to create very complex systems in a short period of time without worrying about, say, memory management.

The same concept goes with blockchain. In the early days, layer 1 blockchains had to be written from scratch to handling everything from storage, consensus, network and so on. Nowadays, modular technologies such as Tendermint Core make it possible for blockchain developers to focus on application logic rather than the basics of consensus protocols.

Coreum uses the Tendermint Core consensus protocol and the underlying IBC protocol, which integrates the Tendermint Byzantine fault tolerance (BFT) algorithm. In addition, the Coreum blockchain is built on top of a suite of applications called the Cosmos SDK.

Furthermore, the Coreum blockchain features the native capability to issue and mint fungible and non-fungible tokens, a built-in Decentralized Exchange (DEX) to trade on-chain issued tokens, Web Assembly (WASM) Smart Contracts as well as a Bridge system to empower interoperability across multiple chains.

Coreum is a fast layer 1 blockchain with dynamic block size and a transaction finality of 1.5 seconds.

Each block can handle a maximum of 10,000 transactions, which enables the network to process up to 6,666 transactions per second.

Validators

Securing the network and block validation is a key part of Coreum’s consensus mechanism.

When a transaction is submitted to the Coreum blockchain, validators are responsible to decide whether the transaction should be executed and be included in the current block.

Coreum relies on a federated committee of 9 validators at a time to conduct the validations. This committee is elected every 4 hours to make the consensus fully decentralized while having an extremely low transaction finality of 1.5 seconds.

By rotating the validators, the system gives a chance to all participants to take a seat in the committee and benefit from staking, delegating and governance. Validators are elected based on multiple factors such as their stake, behaviour and uptime.

Each validator must run a full node and participate in the consensus voting by signing each block with their private keys and in return be rewarded from transaction fees and validator rewards pool.

For a block to become final, a total of 6 validators must reach an agreement, making the validation quorum to be %66.66.

Transaction Fees

Unlike Ethereum and similar blockchains, Coreum uses a unique fee calculation model that is proposed to resolve the following problems:

  1. High transaction fees with increased transaction volume
  2. Low or no incentivization to validators with minimal network activity

Coreum has a number of different transaction types each with different complexity and cost of execution. Transactions can be either simple payments or complex smart contract executions. Smart contracts are weighted according to their size, complexity and execution time, while other types of transaction weights are mapped from an existing table with a predefined transaction complexity.

Coreum uses a unique model to calculate each transaction fee.

Coreum Transaction Fee

Whereas 0.5 is the lowest possible block complexity and 1 is the highest possible block complexity. 21,000 is the minimum unit of transaction weight (e.g. Payment).

This nonlinear model ensures the transaction fees are not exponentially multiplied when the network is processing a high number of transactions. In fact, the more transactions in a block, the lower the fees get.

For example, if a given block has only 1 transaction, the fee would be as low as 0.01 and if a block has 7,000 transactions, the fee would become even lower at 0.0527.

Each block will have a minimum of 0.01 and a maximum of 369 as transaction fees generated.

Validator Incentives

Validators play an important role in the Coreum ecosystem and as such are rewarded for securing the network.

60% of Block fees generated are distributed to the validators after each block is closed. Validators are also compensated for their work through the “Validator Rewards Pool” for every block that becomes final.

The ratio of reward from the validator pool is calculated as follows:

Validator Rewards Pool Calculation

Whereas 0.5 is the minimum block complexity and 1 is the maximum block complexity.

Total Block Validation Reward = Block Fees + Pool Reward

Each validator is weighed according to their stake, uptime and consistency and is given a percentage of the total reward. If all validators have the same weight (rank), the reward is simply divided by 9 (total number of validators)

Validator Rewards Pool

We believe that validator incentivization is key to decentralization and a sustainable blockchain economy. Coreum incentivizes validators through a protocol-based rewarding system.

In the Genesis block, the reward pool is filled with %10 of the total supply which equates to 50,000,000 CORE tokens.

20% of fees generated from each block are put back into the validator rewards pool ensuring the pool remains afloat.

Burn Mechanism

In an attempt to create a deflationary economy, Coreum burns 20% of the total fees generated after each block is closed. This ensures the value of CORE tokens increases over time and results in a better validator incentivization and economy.

Staking

Staking gives validators and delegators a passive income by staking their CORE tokens and getting rewards.

In order for an entity to become a validator, it must run a full node and have a stake of at least 10,000 CORE tokens. Alternatively, users can become a delegator by lending CORE tokens to validators.

Delegating

Users who do not wish or do not have the means to become a validator can become delegators. In short, delegators can choose a validator and stake their CORE tokens by paying a commission to the validator. Delegators are expected to actively participate in governance. A delegator’s voting power is proportional to the size of their stake with the validator and if they don’t engage in community voting, their power is shifted to the validators.

Slashing/Retribution

As important as it is to incentivize the contribution of validators by rewarding them, it is important to punish them on certain occasions for bad behaviour, this is called slashing and retribution on the Coreum blockchain.

These punishments include disqualifying a validator from the committee board, capturing or burning some of the validator stakes or disabling a validator for a brief period of time.

Governance

Coreum’s Proof of Stake consensus mechanism allows for an on-chain governance ecosystem that enables stakeholders to vote on various decisions to upgrade and improve the chain over time. The Coreum community can decide on protocol changes and vote on new proposals to the chain. As some blockchains like Ethereum do not offer any sort of on-chain governance features, Coreum engages the community to participate in key decisions.

A range of different proposals can be submitted through on-chain governance and be put up for voting, the list is including but is not limited to: The deflation rate of the network, slashing, staking, delegating, number of validators, block times, grants and airdrops.

The following is a life cycle of proposals on the Coreum blockchain:

  • Proposal submission: Stakeholders submit proposals with a fee. Once a proposal reaches a certain threshold, the proposal enters into a voting period.
  • Voting: Participants can vote on proposals that reach minimum fee requirements and are active for voting.
  • Inheritance and penalties: Delegators inherit their validator’s vote if they don’t vote themselves.
  • Claiming deposit: Users that deposited on proposals can recover their deposits if the proposal was accepted OR if the proposal never entered the voting period.

Fungible and non-fungible token Issuance

Creating and minting tokens (Fungible and non-fungible tokens) on the Coreum blockchain is supported natively. This built-in functionality even allows issuers to customize their tokenized assets with optional features such as wallet whitelisting, burning and freezing for when it comes to the heavily regulated financial markets like Stock and ETFs.

Users can create their own tokens on Coreum by initiating a “create” token transaction with the specification of the token such as the address as to where the newly minted tokens will be transferred. Each token in Coreum is uniquely identifiable by a combination of its code and issuer.

This operation mints specified tokens instantly after the execution of the transaction. Depending on the configuration, a user can specify whether this token can have “mint”, “burn” functionality in the future. If yes, the user can mint new tokens using another transaction at any time. Alternatively, users can burn any amount of the issued token given the token is burnable. At the time of token issuance, the user can also specify whether holding (sending/receiving) and trading of this token can be allowed by anyone or should be restricted to users who are whitelisted. To authorize an account, the token issuer must initiate a transaction with the account of the requester as well as a “limit” amount (Limit indicates the maximum amount of this asset the whitelisted account is allowed to own).

For example, user A issues a new token called “ABC” and sets the configuration in a way that the newly minted tokens are transferred to user B. User A also restricts holding of this token by setting a config setting called “require_whitelisting”. After this transaction, user B instantly gets whitelisted and is delivered the “ABC” tokens. Now user C wants to receive “ABC” tokens from user B. They now must ask user A (creator of the token) to whitelist them to be able to hold the token. After whitelisting is done, user C can receive tokens from user B. This feature enables some token creators to comply with regulations that require KYC/AML.

The creator of the token (user A) can also freeze anyone “ABC” tokens held in their wallets (given that they set the configuration that allows them to do so when they minted the token). The same user (user A) can also set a global freeze to all holders of the “ABC” token at any time (again, given that they set this config when minting the token).

The token creator/owner (user A) can also change anyone’s limit at any time given the new limit is not smaller than the current user balance.

It is important to note that users can also issue tokens without the whitelisting feature. This creates tokens that can freely move around the blockchain, such as $USDT, or wrapped $BTC and $SOLO.

Token issuance is a built-in feature of the Coreum Blockchain, this means that minting tokens are not conducted through a smart contract, but rather natively on the Blockchain. Relatively, the token issuer can set a “transaction fee” and a “burn fee” in percentage so that for every movement (either through trading or sending/receiving tokens) this amount is deducted from the sender and either be burned or distributed to a chain according to the token settings. This is useful for modern NFT ecosystems that incentives existing holders of NFTs. Alternatively, the burn mechanism is on-chain and is beneficial for deflationary tokens such as $SOLO.

All issued assets (tokens) are tradable on Coreum’s built-in DEX. However, tokens that require “whitelisting” can only be traded by those who are authorized (whitelisted).

A user can obtain any token either by receiving it or trading it on the Blockchain. For both methods, the Blockchain must check whether the token requires whitelisting, and if so, whether the user is authorized to receive it through trading or not, or if authorization is not required, then the user can obtain these tokens.

Smart contract (WASM)

Ethereum has revolutionized the way code and smart contract execution takes place on the blockchain by pioneering the Ethereum Virtual Machine (EVM). While EVM was great at the time for smart contract execution, it has many limitations and lacks support for modern smart contracts.

We believe WebAssembly is a much greater engine for smart contract execution and has much greater scalability and support. It was developed by the W3C (World Wide Web Consortium) with support from companies such as Mozilla, Google and others.

While being portable, Turing-complete and efficient, developers can write their smart contracts in many different programming languages such as C/C++, C#, Rust, Javascript, Typescript, Haxe, and Kotlin.

WASM is fast, efficient, open and debuggable, platform-independent, memory-safe and is perfect for smart contract execution.

More info on WASM can be found here: https://webassembly.org/docs/high-level-goals/

Interoperability & bridges

With hundreds of Blockchains currently being used, Coreum deploys a bridge functionality to interoperate with various chains through the collateralized wrapping. This allows for other cryptocurrencies to flow into Coreum’s Ecosystem seamlessly.

The system of bridges will allow operators to create a gateway and allow for other assets from other Blockchains (Such as Ethereum and ERC20s) to be wrapped in the Coreum Blockchain. This brings a huge value to the users of the Coreum Blockchain by allowing them to trade such assets on the Decentralized Exchange and benefit from DeFi functionalities for a fraction of the main chain.

The bridge system is fully decentralized and its development is based on Cosmos SDK Gravity Bridge.

Decentralized exchange (DEX)

The Decentralized Exchange is a native, built-in exchange functionality within the Coreum blockchain. Although by using smart contracts it is possible to achieve swapping or trading, Coreum aims to build this feature directly in the blockchain core system to allow for a low-fee, secure and fast trading activity with support for all modern trading features.

The DEX can facilitate the trading of any issued asset as well as the CORE within its function. Users of the Blockchain can choose any asset as base and quote pairs and a market will automatically be created for such pairs. The dex features a full-featured synthetic order book, Market orders, Stop orders, Stop-Loss orders, Take-Profit orders, One-Cancel-Other (OCO) orders, and Trailing-Stop orders.

The DEX will also support advanced features such as “Fill or Kill”, “Immediate or Cancel”, “Good Til Time” and “Good Til Cancelled”.

The decentralized exchange will be based on the synthetic order book, allowing users to create orders on any possible pair. An order consists of a currency pair, direction, execution price, size and additional conditions for execution and closing.

When a user creates a new order, the system will find opposite orders not only in the pair that was chosen but also in other currency pairs, simulating the order executing chain after which the user’s order will be executed. For example, a user created an ETH-BTC buy order, but there are no opposite orders in this pair through which the user’s order can be executed, however, two suitable limit orders in ETH-CORE and in CORE-BTC pairs exist that will be executed delivering the user the volume they placed through the order with the price specified.

Decentralized Apps (dApps)

Since Coreum is using WebAssembly, it’s opening a new corridor for Decentralized App developers, and DeFi applications by allowing them to write smart contracts with their favourite programming language.

Coreum is taking the initiative to help and grow the WASM smart contract developers community and as such has 10% of the total supply of CORE tokens designated for grants to developers.

Use cases

Coreum provides developers and financial institutions with a complete essential infrastructure to build any DeFi applications. Coreum even incentives qualified developers to build intuitive dApps. Some of the proposed use-cases of Coreum blockchain are:

  • Tokenized Securities (e.g. Sologenic.com)
  • Liquidity Providers (LPs) and Market Makers
  • Cross-border Payments, Banking and Remittance (e.g. Swift)
  • Stablecoin Ecosystems (e.g. USDC, USDT, …)
  • Lending Platforms (e.g. Blockfi, Nexo)
  • Wrapped Cryptocurrencies (e.g. ERC20, BEP20)
  • Decentralized Exchanges (e.g. Sologenic.org, UniSwap, …)
  • Metaverse Applications (e.g. Decentraland, The Sandbox, Meta)
  • NFT Marketplaces (e.g. Sologenic.org, Oopensea.io, …)
  • Gaming and Play-to-earn apps (e.g. Axie Infinity)

Token Economy

Token Information

$CORE Token Information

Allocation

$CORE Token Allocation

Distribution and airdrop of $CORE for $SOLO holders

Coreum’s ecosystem and technology are built by the community for the community. In order to engage the community to participate in the new coreum ecosystem and proposed governance utilities, the CORE Team has proposed to conduct an airdrop equal to 20% of the total supply of $CORE tokens (100M) to the Sologenic community as the initial backer and the most important use-case of Coreum blockchain according to a 371-day distribution schedule.

The remaining 30% of the total supply will be airdropped to the $CORE holders gradually based on a 12 to the 36-month distribution plan. The timing will be decided by the community and $CORE holders through a voting mechanism available within the Coreum ecosystem.

When will the Snapshot be taken and the CORE tokens be distributed to $SOLO holders?

The Coreum airdrop will take place after capturing a snapshot of the account balances on the XRP Ledger, which established a TrustLine to the Sologenic Gateway.

The system will take one snapshot at a random day/time, each month for a full year.

A total of 100,000,000 $CORE will be distributed to those wallet addresses holding $SOLO at the time of each snapshot. A total of 13 snapshots will be taken within the next 371 days.

Initially, $CORE tokens will be distributed via an IOU on the XRP Ledger and once Coreum’s mainnet is launched in August 2022, users can conduct a token swap through a Gateway designated for the $CORE. Alternatively, the tokens can remain and co-exist on the XRP Ledger and be traded on the Sologenic DEX.

Example: Let’s assume the final amount of $SOLO which are qualified for the $CORE airdrop at the time of each snapshot is as follows:

Snapshot 1: 10,000,000 $SOLO

Snapshot 2: 12,000,000 $SOLO

Snapshot 3: 15,000,000 $SOLO

….

Snapshot 13: 20,000,000 $SOLO

Then the number of $CORE Airdrops for the holders of $SOLO will be calculated and deposited as below:

CORE Airdrop Amount “Example”:

Snapshot 1: (100,000,000 ÷ 12) ÷ 10,000,000 ≈ 0.834 $CORE per each $SOLO holding on first month

Snapshot 2: (100,000,000 ÷ 12) ÷ 12,000,000 ≈ 0.70 $CORE per each $SOLO holding on second month

Snapshot 3: (100,000,000 ÷ 12) ÷ 15,000,000 ≈ 0.56 $CORE per each $SOLO holding on third month

….

Snapshot 13: (Remaining $CORE Airdrop Pool) ÷ 20,000,000 ≈ Amount of $CORE per each $SOLO holding for the last distribution

A total of 100,000,000 CORE will be distributed to the $SOLO holders within the next 371 days.

When/How will the CORE Airdrop be Distributed?

Each month’s airdrop will be distributed at the time of next month’s snapshot at a random date and time to the $SOLO holders.

Since all $SOLO holders automatically have a TrustLine with the Sologenic Gateway, they are NOT required to take any action to participate in the $CORE Airdrop.

At the time of the initial $CORE IOUs distribution on the XRPL, all participants must create a trustline with the Coreum gateway to be able to receive the $CORE tokens deposits. More information on this will be released in late January 2022.

At the time of the initial $CORE IOUs distribution on the XRPL, all participants must create a trustline with the Coreum gateway to be able to receive the $CORE tokens deposits. More information on this will be released in late January 2022.

Here is the schedule for Snapshot and distribution of the $CORE Airdrop for the $SOLO holders:

$CORE Snapshot and Distribution Schedule

What if you hold your $SOLO on Centralized Exchanges?

$SOLO holders who hold their assets on exchanges will need to periodically check and see if their exchange is supporting the $CORE airdrop.

We will initially reach out to exchanges and ask them to distribute the $CORE tokens to their respective users. However, the $SOLO community may help in asking their favorite exchanges to consider participating in the airdrop.

When/How can I trade $CORE?

Initially, $CORE tokens will be distributed via an IOU on the XRP Ledger and once Coreum’s mainnet is launched in August 2022, users can conduct a token swap through a Gateway designated for the $CORE.

The $CORE tokens can remain and co-exist on the XRP Ledger and may be traded on the Sologenic DEX, other XRPL DEX and Partipcating Centralized Exchanges after the first distribution is completed in February 2022.

At the time of the initial $CORE IOUs distribution on the XRPL, all participants must create a trustline with the Coreum gateway to be able to receive the $CORE tokens deposits. More information on this will be released in late January 2022.

How to stay tuned for further updates?

If you wish to receive more updates about the upcoming $CORE airdrop, we suggest you follow @CoreumOfficial and @realSologenic on Twitter.

Roadmap

Coreum Roadmap

Coreum Community

Coreum is a 100% open-source project created to enable a decentralized web and a better future of blockchain. Anyone can contribute!

We strongly invite all the open-sourced developers to join the CORE team and help build a better, more advanced and green blockchain.

The Coreum community is the home of all the open-source developers, token holders, validators, and members supporting the protocol.

All developers, validators and token holders will be participating in different voting vents within the future life of the Coreum blockchain. Some of the examples of voting events are:

Token Holders: To decide about the future time, date and amount of remaining CORE airdrops

Developers: To decide about the future amendments to the protocol when the changes are essential to make the Coreum blockchain ecosystem simply better.

Validators: To decide about the future fee schedules, number of validators in the federation and…

Open-Source Dev Contribution

Coreum is an open-source blockchain built on the Tendermint Core BFT and utilizes many of the Cosmos-like modules. Our community needs to grow, therefore our foundation incentives developers, companies and partners who develop and build the ecosystem and eventually Decentralized Apps. If you are interested to join please check this site:

https://join.coreum.com

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Sologenic

Sologenic is disrupting the asset trading industry: Tokenized Securities, Crypto Assets & NFTs. www.sologenic.com and www.sologenic.org