The Speech of ChainX founder on Web3 Summit
ChainX started in China
In 2016, the other co-founders of ChainX and I had noticed the ParityTech team for their strong developing capabilities in blockchain area, so we began to study the Polkadot whitepaper as soon as it was released and translated it into the first non-English version. We gave it a Chinese name pronounced as Boca which sounds similar to Polka, and we have set up communities and organized meetups dedicated to the Polkadot network as well as the Web3 ecosystem. Now there are strong community bases for the Polkadot investors, developers and users in China.
Built on Substrate.
The Gateway of Inter-chain Crypto Assets
Polkadot’s goal is to freely send and receive arbitrary data between chains, instead of focusing on any user-level applications. Given the fact that most of the data on blockchain is still assets, ChainX announced last year that we would cooperate with Web3 Foundation, and take the responsibility of building a gateway of crypto assets to connect Polkadot with other blockchains, so that mainstream assets such as Bitcoin can be relayed into the Polkadot ecosystem, and ChainX can incubate subsequent financial services.
The classification of asset gateways
Every chain is an independent system with its own consensus, which essentially indicates that assets on one chain cannot be transferred into other chains. In order to do inter-chain transactions, the real native assets need to be locked on original chain and issuing shadow assets on target chain; or destroying shadow assets on target chain and unlocking the real assets on original chain to undo it. In the past, inter-chain transactions were undertaken by centralized systems: such as individual agent, multi-joint custodianship or exchanges, which are not transparent and not secure. About 10 years ago, Satoshi Nakamoto designed the light-client protocol in the Bitcoin whitepaper, which is not yet fully explored. Only by integrating the light-client of the original chain in the target chain can we issue inter-chain assets transparently, safely and efficiently, so that inter-chain asset can be secured by the consensus algorithm of the original chain instead of some centralized systems.
Bitcoin Light-client Bridge in ChainX
Thanks to the powerful smart contract in Substrate, for the first time, ChainX had successfully integrated Bitcoin’s light-client in a pure Web Assembly virtual machine environment. Everyone can submit a Bitcoin header, then ChainX will verify it by its PoW difficulty. Eventually, ChainX will reach conclusion of the longest chain of Bitcoin in a decentralized way. Therefore, all transactions included in Bitcoin can be verified by its Merkel proof in ChainX. This bridge is accepting BTC deposits, waiting for 4 blocks of confirmation, and issuing X-BTC as shadow asset at 1:1 ratio. This also qualifies ChainX as a new side-chain for Bitcoin, but unlike Liquid and RSK using Bitcoin native codebase to integrate light-clients. Bitcoin bridge built by Web Assembly makes ChainX fully compatible with Polkadot’s shared security framework, so that we can serve directly as a para-chain in Polkadot.
ChainX multi-signature Bridge in Bitcoin
Bitcoin doesn’t have smart contract, and the developability of smart contract in other existing blockchains is still low. So, it is impossible to integrate the consensus algorithm and cryptography base of Substrate in the existing chains, which means there will be no light-client bridges in the opposite withdraw direction. That’s why there is only one way left: multisig notary. Every few month, ChainX community elects 6 to 15 validators according to their institutional qualifications and collateral assessments. These trustee validators are big asset management corporations, famous crypto wallets and exchanges. They had generated hot and cold two multisig addresses, holding BTC reserves and processing X-BTC withdrawals.
Fast payment system for Bitcoin
Bitcoin has been the largest market value blockchain system and the largest range of consensus network. But Bitcoin has been restricted in single-digit TPS and 10 minutes of confirmation time. Lightning network is a C2C-guaranteed trading system with fast response, but the network structure is too complex and not transparent. ChainX produces a block every 2 seconds, so X-BTC settles a transaction in 2 seconds, with fees as low as 0.1 cents and throughput up to 1 thousand TPS, which is the technical support from Substrate. X-BTC will also be sent into the Polkadot network in the future to become the most trusted inter-chain asset. Based on the multi-chain structure of Polkadot, X-BTC can achieve even greater throughput and more wider application scenarios. Most importantly, this is all secured by the GRANDPA BFT consensus.
Smart contract system for Bitcoin
Bitcoin main chain itself is designed to maintain security and simplicity, and the limited OP_CODEs cannot support complex business logic, so developers want to give Bitcoin the ability of smart contract outside of the chain. RSK and BTC-Relay are very good attempts. Substrate has the best Web Assembly smart contract technology and ecological support, so it is currently the best smart contract function incubator for Bitcoin. ChainX had implemented a completely on-chain DEX to enable free exchange of X-BTC with other tokens. This DEX is just our first DApp attempt, but it can represent the ability of connecting Bitcoin and Turing Complete smart contract. In short, ChainX connects Bitcoin and Polkadot, the perfect match between the maximum consensus and the most powerful technology.
Native & Inter-chain Assets
Only PCX is our native asset, and there are three inter-chain assets. Inter-chain deposit transactions: users transfer BTC to the hot multisig address and attach the deposit information in OP_RETURN, then X-BTC will be issued into their ChainX account, and they can apply withdrawal at any time. If Bitcoin holders don’t need our fast payment and smart contract service, or they just worry about the security of our multisig address, they can do inter-chain lock-up transactions: users transfer BTC to their own address which themselves hold the private key and attach the lock-up information in OP_RETURN, then L-BTC will be issued, and they can unlock at any time. Inter-chain mapping transaction: Ethereum DOT holders sign a transaction and attach the mapping information in Data, then S-DOT will be issued, but S-DOT cannot convert into real DOT. ChainX has grown into the largest Bitcoin Layer 2 network or side-chain system, with the issuance reached at a peak of: 15 hundred X-BTC, 12 thousand L-BTC, and 1.4 million S-DOT.
ChainX didn’t raised any ICO, private or public offering. Our preliminary development was supported by our discretionary funds. ChainX issues the native currency PCX, 21 million in total, with issuance halved every two years just like Bitcoin. To maintain the decentralized nature of our system, the founding and developing team only gradually receives 10% of the total in the first two years. Half of the PCXs issued every day are distributed to the holders of X-BTC, L-BTC, S-DOT and other inter-chain assets according to a certain calculation rule. This is called inter-chain asset mining. PCX that the user mined can be used in validator elections to safeguard the network’s security, and users participating in staking share the other half of the newly issued PCX.
ChainX currently has 30 validators authoring new blocks and an unlimited number of candidate validators. The commission rate of all the validators are fixed and exactly the same to guarantee the fairness between big and small validators. Misbehaviors like missing blocks or double-signing will be punished with fines going to the council fund. The ChainX founding team had been renamed as PolkaX team which is one of the 11 council members. The other 10 council members are composed of the top 10 validators who receive the most votes. If a proposal is approved by more than half of the council members, then it will enter the referendum stage. If two of thirds PCX holders approve it, then it will be developed and upgraded by PolkaX team. So far six proposals have been passed, which are about the use of council funds and the refinement of the staking rules.
Connecting with Kusama and Polkadot
Limited by the factors like incomplete light-client of the existing chains, low market value or high development cost, ChainX will selectively build new bridges, including Ethereum, Zcash, Binance Chain, Libra and so on. The current chain of ChainX will be renamed as ChainX Genesis where users will not be able to deploy smart contract due to the complexity of the relay bridges. ChainX will experiment ChainX K1, a new smart contract para-chain in Kusama. Through a two-way peg light-client bridge, ChainX will gradually transfer assets such as PCX and X-BTC into ChainX K1 where PCX will be used as gas, and then relay these assets into other para-chains. Centering on these inter-chain assets, ChainX will incubate a range of DApps including spot trading, leveraged trading, lending, gaming and more. When Polkadot main-net is launched, ChainX will port the experimental para-chain ChainX K1 to the Polkadot main-net to start ChainX P1.
HashBang, a blockchain knowledge provider, established the PolkaWorld community together with ChainX. PolkaWorld is serving Polkadot ecosystem by organizing communities and incubating projects. PolkaWorld has produced more than 70 articles in 2 months, organizing 4 meetups with Web3 Foundation and 8 workshops all over China. Every week, there will be an AMA with different topics. PolkaWorld now has more than 10 thousand community members and growing rapidly.
Global & Partners
We started in China, but we are also moving towards internationalization. We currently have whitepapers in Chinese, English, Russian, and Vietnamese, some validators from Italy, Finland, and Estonia, as well as lots of community organizers from Japan, Korea, and Singapore. ChainX has established a good relationship with many wallets, communities, validators, and exchanges, but we hope to work with more international teams to explore numerous possibilities for cooperation. Welcome to contact us through our website chainx.org. Thank you!