Komodo has two weeks remaining in its ICO. So far, it has raised the equivalent of $1.7 million. This anonymous cryptocurrency has gotten relatively little coverage in the wake of the Zcash launch, Ethereum forks, and recent Bitcoin price activity. This is unfortunate: it has much bigger ambitions than being a Zcash clone. It will be the primary currency of SuperNET.
The Vision of SuperNET
SuperNET has existed as a project since 2014, when altcoins were taking off and people were still trying to understand the role of the myriad tokens being launched. Anonymous developer jl777 imagined SuperNET as “The Internet of Coins”–a world where people could seamlessly hold, trade, and use any cryptocurrencies. SuperNET calls these “assetchains.”
This vision hasn’t changed, but it now has different strategies. Realizing the SuperNET vision involves a couple components.
- Iguana: a codebase that underlies all aspects of the ecosystem. Iguana can serve as a node to Bitcoin and any other cryptocurrency based on the Bitcoin codebase. Iguana is also the basis of a multiwallet that can sync multiple different blockchains in parallel.
- InstantDEX: a decentralized exchange that allows native currency swapping without transferring coins to an exchange. An early version, EasyDEX functions like a decentralized Shapeshift.
- Komodo: a cryptocurrency that will replace Bitcoin Dark, the coin originally envisioned as a truly anonymous cryptocurrency. Komodo will also play a unique role in supporting the launch of other cryptocurrencies.
- Assetchains: multiple, easily launched blockchains based on the Bitcoin codebase and secured to Bitcoin’s blockchain through Komodo’s delayed proof-of-work.
The Role of Komodo
“SuperNET is the vision, iguana is the software, komodo is the coin” -jl777
Komodo brings two innovations to the cryptocurrency industry.
First, it brings anonymous transactions using the same zsnark technology as zcash. In fact, it is a modified fork of zcash.
Second, it introduces a new security process they call delayed proof of work (dPow). The Komodo blockchain periodically notarizes itself to the Bitcoin blockchain, allowing Komodo to benefit from Bitcoin’s established security and limiting any attacks on its chain to whatever hasn’t yet been notarized. The Komodo blockchain is mined using the same equihash function as in Zcash, but it has an added round-robin feature. KMD tokenholders vote on 64 notary nodes, who take turns getting a reduced-difficulty block–so anyone could technically mine any block, but the notaries periodically have an easier time.
dPow is imagined as a generalized notary blockchain: other blockchains can write themselves to the Komodo blockchain and be included in the notarization to bitcoin. Developers have an easy command that blockchains can include in their codebase to notarize themselves. It is part of the vision of SuperNET: allowing altcoins to flourish and in this case, piggy-back on the security of Bitcoin via the Komodo blockchain.
What is the KMD Token
The KMD token being sold will be used for fees on the network and as a general purpose, anonymous token. In some senses, it is a direct competitor to zcash that secures itself to the Bitcoin blockchain but has the disadvantage of less funding, a less visible team, and less hype.
KMD also has some other capabilities as a currency: it will be able to natively exchange with a variety of other currencies utilizing trustless atomic swaps. Atomic swaps refer to instant cross-blockchain trades that don’t rely on a trusted escrow service like an exchange. Currently, trading BTC for ETH requires either going through an exchange that serves as an escrow, trusting the the other person you’re trading with, or utilizing a contract that serves as an escrow. With an atomic swap, the two transactions are processed simultaneously. This is possible because Iguana enables nodes to interact with all networks from Bitcoin-derived protocols. So KMD will be able to swap with other currencies, enable them to swap with each other, and swap with fiat currencies if a fiat chain was launched.
However, the dPow protocol has value beyond anonymous transactions. Developer jl777 writes, “I see KMD more as an “OEM” [Original Equipment Manufacturer] instead of retail, so the mass marketing for KMD is probably not needed.” In other words, KMD allows others to launch their own altcoins (based on the Bitcoin protocol) while Komodo helps provide it security, similar to how Apple designs and markets the iPhone while Foxconn manufactures it.
The long-term value of KMD will more likely depend on usage of the dPow blockchain by other cryptocurrencies. At present, a cryptocurrency that doesn’t want to worry about the security of its own blockchain has several options as a metatoken on Ethereum (as an ERC20 token) or on Bitcoin as an omni token. There are two disadvantages with this approach.
- At the mercy of the parent chain hard fork: a metatoken has to follow the winning fork in the base blockchain.
- Pay fees in another currency: either BTC transaction fees or Ethereum gas fees makes transaction costs susceptible to the volatility of the ‘parent’ currency. The prices of both currencies fluctuate, so the actual USD value of the transaction fee can vary–particularly as a percentage of the amount spent. Below is an example of the cost of sending 100 Synereo AMPs throughout 2016, as a portion of the value of 100 AMPs.
Using the dPow method means that other currencies can periodically notarize themselves to a highly secure blockchain instead of existing on top of it. This would give it a little more autonomy and keep it as secure as the last notarized state. This has one important requirement: acquiring KMD to pay notary fees. Given that Komodo nodes will sync with the blockchains that might notarize themselves, this should be very easy using atomic swaps. This does keep other nodes dependent on KMD’s value, but presumably KMD will stay cheaper than BTC.
A world of multiple independent blockchains seems counter to the two prevailing visions: permissioned chains serving enterprise needs and other independent projects being built on top of Bitcoin or Ethereum. Before now, other chains (‘altcoins’) were highly vulnerable to 51% attacks. The delayed Proof-of-work notarization could make altcoins more feasible. Zcash also provides a Bitcoin-based codebase with an ASIC-resistant hash algorithm, and Komodo will be followed by other Zcash clones.
Of course, having enough hashing power to prevent a 51% attack and being notarized (‘backed up’) on the Bitcoin blockchain aren’t the same thing. One big question is how successfully a blockchain and its community could recover from such an attack.
Interested in participating in the ICO? Check out Smith + Crown’s summary.