Lisk began as a fork of Crypti, a previous cryptocurrency project started by the Lisk founders, Max Kordek and Oliver Beddows. The LSK tokens were first offered to the public through an Initial Coin Offering (ICO) in order to decide the initial coin distribution and raise development funds. The ICO raised 14,000 BTC and, at the time, it was the second most successful crypto-currency crowd-fund. On May 24, 2016, Lisk’s main network became operational and the LSK tokens became available for trading on major stock exchanges. Lisk was relaunched and rebranded on February 20, 2018 with a new logo and website; the name and the LSK network remained the same.
A sidechain functions as a regular blockchain. It has a genesis block that determines its initial state. Blocks are added to the blockchain by authorized parties and validated by private agents on the network. The sidechain protocol defines which transaction types are supported. The sidechain is connected to the blockchain at the point of bifurcation, but subsequent changes on one sidechain do not affect the main blockchain, which is running in parallel. Due to this, potential problems with speed and security on one of the sidechains do not affect the main network.
Lisk’s protocol of choice is the Delegated Proof of Stake (DPoS), a consensus algorithm in which a number of delegates are responsible for maintaining the irrefutable agreement of truth across the network, validating transactions.
Delegated Proof of Stake uses real-time voting combined with a reputed social system to achieve consensus. It acts as a form of digital democracy since each token holder can exert a degree of influence over what happens on the network by voting for “delegates”. In Lisk, the top 101 voted delegates in the network become the Active Delegates.
The voting power that the token holder has, also known as vote weight, is determined by how many tokens the account is holding. The theory behind this consensus is that token holders will vote for delegates that have a good reputation in the community, as they are responsible for keeping the network secure.
Lisk Blockchain Applications
The Lisk Blockchain Applications are composed of four main parts:
- Consensus Algorithm: Delegated Proof of Stake (DPoS).
- Sidechains: Allows the creation of a similar autonomous blockchains linked to the Lisk main chain.
- Back-end: Customizable code for developers to create DAPPS independently.
- Front-end: The user interface (UI), which are the public facing components
New LSK tokens are created in a non-standard way for cryptocurrencies; the process is called forging. To achieve this, the network uses the Delegated Proof of Stake (DPoS) algorithm. Not all platform users are able to engage in mining, only a certain number of individuals, the 101 active delegates, are able. Other users may only participate in the selection of these representatives.
Delegates have the right to create their own pools and engage in mining, the reward will be distributed to all pool participants.
Lisk uses a forged inflationary reward system that creates a new LSK for each successfully discovered block. During year 1, forging rewards are set at 5 LSK per block. Each 3,000,000 blocks (~ 1 year) forging rewards are reduced by 1 LSK, ending at 1 LSK per block after 5 years. Forging rewards will remain at 1 LSK per block indefinitely. Forging rewards will also be distributed among all active delegates (top 101) in the same way as any network fee.
Time between blocks
The Lisk network generates blocks in 10-second intervals. In case a delegate does not properly forge the assigned block, the transactions move to the next block of the round, causing the block forging time for that round to be extended by 10s. Each subsequent lost block results in a 10-second delay for processing and transaction confirmations.
Sidechain Development Kit (SDK) Tools
The SDK consists of five tools: Lisk Core, Lisk Commander, Lisk Hub, Lisk Elements and Lisk Nano (eventually will be replaced entirely by Lisk Hub). Used together, these tools will enable application developers to create and maintain their own decentralized applications running on the Lisk network.
Lisk Core enables delegate forging, provides synchronization to access key blockkain data from the Lisk network, and offers the complete network API to developers. Lisk Core is for advanced technical users looking to build on top of the Lisk Platform, protect the network infrastructure, or gain forging access as delegates. Lisk Core allows the user to explore the data recorded in the Lisk blockchain, post transactions to the Lisk blockchain, and enable and disable spoofing for a registered delegateIt consists of three main back-end components, Node.js, PostgreSQL and Redis.
Lisk Commander is a tool intended to help developers who need to run commands against the Lisk Network. It allows the user to communicate with a remote or local node and carry out Lisk-related functionality. In this way, it allows users to use a command-line interface (formally known as CLI) in order to interact with the Lisk Core APIs.
Lisk Hub is the front-end package, a solution to managing the Lisk ID, accessing the Lisk account, sending LSK tokens, and voting for delegates, from a single place. It combines and expands the functionality of the Lisk Nano Wallet and the Lisk Blockchain Explorer. Kordek and Beddows have said that the Lisk Hub will feature a Decentralized Exchange (DEX), sidechain record, and the ability to launch an ICO in the future.
Lisk Elements is a collection of libraries that include functions such as shared encryption, API representation, transaction logic for local signing, and Lisk ecosystem constants. Lisk Elements has an API client for interacting with nodes on the Lisk network, mnemonic passphrase assistants, a set of Lisk related constants, relevant cryptographic functions, and functions to create, sign and verify transactions.
Lisk Nano is the light-version of the Lisk wallet that allows the user to send and receive transactions on the Lisk network and provides features like delegating a poll or registering a second secret phrase. Lisk Nano does not require blockchain synchronization as it connects to the Lisk nodes hosted by the Lisk Foundation. It is not possible to use API calls and other features in Lisk Nano, if this is required the user must use Lisk Core.