A distributed network allowing for trustless verification of data is crucial to any blockchain. There are many competing ideas as to the best way to design such a network. Some private chains use permissioning to restrict access to unverified users. Other public chains seek to be fault-tolerant and trustless, limiting the amount of damage a bad actor could inflict.
Dragonchain seeks to get the best of multiple approaches by combining private blockchains with the power of public blockchains via Interchain technology. This system creates a network called Dragon Net. Using Dragon Net, private business data is kept secure on a business chain (L1) and inaccessible to the rest of the network. Proof of existence of the transaction is broadcast to verification nodes until it reaches Level 5 (L5 - public checkpoint), where the proof of existence is ledgered on multiple public blockchains like Bitcoin and Ethereum. This lets every business chain leverage the combined hash power and security of public networks while maintaining the privacy of a private blockchain.
Validations and Rewards
In return for the processing power used to validate business chain (L1) blocks, higher level chains receive a share of the Dragons paid in transactions fees for that block. This share is based on the amount of TIME staked to the chain and is split across all participants in the verification. See more info about TIME below.
Dragon vs. DRGN
In Dragon Net, DRGN tokens are not mined and cannot be given out as block rewards the same way as Ether or Bitcoin. Instead, a randomized selection process takes place to choose which higher level chains will be selected for verification of business chain (L1) blocks, and those chains are paid in Dragon (credits on Dragon Net). Dragons are used only in Dragon Net, while DRGNs live on Ethereum and accrue TIME. Dragons are redeemable for DRGN, subject to legal limitations.
TIME and TIME Staking
TIME is a concept that can be leveraged within Dragon Net to reduce transaction costs for an L1 chain or to receive a larger share of the Dragons paid for validation of a block. DRGN tokens gain 1 TIME per DRGN for every day that they stay in an Ethereum address. Ethereum addresses can be claimed on the Dragonchain Console and the TIME accrued by that address can be “applied” or “staked” to a user’s chains.
L1 chains pay for Validations from the business node address of their Dragonchain account. The balance and transfer history of this address is available in the Dragonchain console Account tab. Dragons can be added to this address by purchasing more on the billing page or by transferring DRGN tokens into the account’s funding address to convert DRGN to Dragon. The Dragons can then be transferred to the business node address. All L1 chains on an account share the same business node address.
The price per transaction is dictated by applied TIME. By applying TIME to an L1 chain, the price paid per transaction can be lowered significantly. Higher level validations provide protection against tampering and pin transactions to powerful public blockchains.