Cryptocurrency is getting easier to access and affordable to own. There’s a vast amount of projects with different value propositions that are creating new economies and business models. Revolution is everywhere, in every corner of every industry, blockchain is transforming the way things work. Problems like scalability, interoperability and regulatory frameworks are slowing down mass adoption of cryptocurrencies. But independently to the value proposition a project is presenting, the value proposition of cryptocurrencies as a whole is to bring security and transparency to transactions of money, data, time, etc. To control, determine and automate a monetary policy to sustain an economic model, and to decentralize this whole process through the use of blockchain. This is no easy task but projects that are focused in delivering a world-scale solution to this will survive but specially grow in the future. Today I want talk about Callisto Network and how this project is changing the cryptocurrency space through a self-sustaining ecosystem that secures smart contracts, presents a decentralized storage solution and brings innovative concepts such as cold staking.
What is Callisto?
Callisto is a project backed by the Ethereum Commonwealth. It initially surged as an Ethereum Classic sub-project to help design a side-chain as a scalable solution for ETC. The main objective of this project is to reach and implement a reference protocol for a self-sustained, independent, self-governed blockchain ecosystem. The point of creating such ecosystem is to be able to implement this in Ethereum Classic and potentially other smart contract based networks. The problem with Ethereum smart contracts (and this applies to other Ethereum forks), is the lack of tools to make them secure. Hacking a smart contract can potentially mean stealing millions of dollars. The retail investor, as well as the institutional, might not be able to verify the veracity of a project that easy. ICO projects are scamming investors all the time. But smart contract bugs can be easily exploited to drain money from a wallet just like what happened with the DAO hack in 2016, or what happened just in October with the Oyster project. In case you didn’t know, the Oyster project suffered a massive smart contract exploit, where the token issuance function was activated again so tokens where being minted out of nowhere and immediately being sold at a market price. This was done by the original developer, who had intentions to crash the project by selling up to 3 million tokens, created this way, in Kucoin. He was able to cash out $300k and permanently damaged the image of the company. For this, Callisto has taken the task to audit smart contracts to secure and optimize them and improve the industry project by project.
The importance of auditing smart contracts
The main benefit from Callisto audits, is that they are free! Callisto has a full-time team of smart contract auditors that will be compensated with CLO using a treasury fund that is funded with a certain % of the block reward. Audits are needed because smart contracts are not that “smart” in the end. They are coded by developers that can introduce mistakes into the rules deployed by a contract. Without proper monitoring and optimization, millions of dollars can be at risk in a vulnerable point in time. Callisto offers the following in an audit:
1.Overall smart contract architecture analysis.
2.Technical analysis of the interaction between smart contracts and the blockchain.
3.Full service smart contract audit solution
4.Identify potential bugs in the smart contract code and categorize them depending on severity.
5.Optimization of the smart contract code.
That’s pretty awesome considering that the audits are free. This is definitely an awesome opportunity for blockchain companies, to audit their smart contracts and improve the security in the industry. This is also creating job opportunities for smart contract developers that can become auditors and be rewarded CLO as a monetary incentive and “karma” points as a reputational system. There’s also a role for managers to help keep the audit submission organized and on time.
The opportunity for investors – Cold Staking
Investors can participate in the ecosystem by holding CLO coins in the cold staking program. This cold staking program allows you to earn a monthly return on your coins. Cold staking can be seen as the staking 3.0. The difference between cold staking and normal staking is that you don’t need your wallet to be connected to the network. The whole staking calculation is done with the help of smart contracts and it doesn’t represent a consensus vote to verify transactions such as is the case of a Proof of Stake coin. In cold staking, your coins are locked for 27 days, the cold staking contract accumulates a percentage of the mining rewards, and distributes them to the stakers in proportion to their stake. You are not receiving a stake as in proof of stake coming from verifying block transactions, you’re simply taking a share of block rewards.
Here are some technical details about the blockchain.
Proof of Work algorithm: Dagger Hashimoto (Ethash)
Block interval – 15 seconds.
Block reward – 600 (which 30% goes to the treasury fund)
Max Supply –
6,500,000,000
Current supply as of writing –
1,112,808,701.21
Block reward reduction – 32% each 5,000,000 blocks
A decentralized file storage system
You might think that the supply of coins is too much, they are being generated too fast and in big quantities so this can only put a selling pressure to the price. What’s the catch? The utility value of the CLO coin. CLO is not only valuable as a method of payment, it also gives you access to a decentralized storage solution based on the EOS.IO storage solution. The project will store the audit reports in a customized decentralized storage solution, to keep the reports immutable. Users will be able to take advantage of the private and decentralized system to store their personal files. There’s other projects out there currently with a file storage solution, like Filecoin, Maidsafe, Siacoin, Storj, Ethereum Swarm, Oyster (now known as Opacity), etc. Filecoin for example uses the IPFS (Inter Planetary File System) protocol to host the data. This protocol generates a trustless proof of storage and proof of replication system. The other solutions implement a similar concept. They all require micro-payments for both storage and retrieval of data using their own cryptocurrency. The problem with this is scalability. This model depends on home computer storage providers and the continuously required payment to access the system. This is not scalable. The general public couldn’t even have access to it via their browser for free. This works as a private solution, but in reality, the internet needs an open source, public solution that can store all internet data in a decentralized manner so we aren’t dependent of intermediaries like Internet Service Providers to access the internet. Callisto designed a file system using the EOS.IO storage proposal that aims to give everyone the ability to permanently store and host files. There’s no upfront fee or ongoing charge for storage or bandwidth, a user must lock tokens to gain access to a certain amount of storage and they can sell tokens when they don’t need it anymore. So EOS is not used as “money” or a form of payment. Is used as the “access” or key to a system. This is a much more innovative concept that EOS proposed, and that Callisto will implement.
So that’s what this project is all about. Very few coins are as innovative as this one so is definitely worth keeping an eye on this one for further development and potential opportunity to be an early participant in this ecosystem, which we all try to take advantage by being early adopters of disrupting technology such as blockchain.