The collaboration between CasperLabs and BitMax.io represents a unique go-to-market approach for high-caliber blockchain projects which have historically restricted access to seed and private token sales to a selective niche of institutional investors.
The EVO, facilitated by BitMax.io, will allow the platform’s global userbase to sign a non-transferable Validator Future Token Agreement (“VFTA”) to purchase CLX tokens, the native cryptographic token of the CasperLabs blockchain, at the “Genesis Block” – which means BitMax.io users will receive the earliest possible opportunity to acquire CLX tokens at the most favorable valuation. Ultimately, the EVO aims to provide the CLX token broad access to an otherwise untapped retail demographic as well as greater network decentralization at the project’s future Main Network (“Main Net”) launch.
Registration to participate in the CasperLabs’ EVO is currently live on BitMax.io, and the first of three rounds of the offering will be conducted on March 30, at 10:00 a.m. EDT.
The Vision of Proof-of-Stake Networks
Proof-of-Stake (“PoS”) was conceived as an alternative to Proof-of-work (“PoW”) for blockchain network validation as a means to address two critical shortcomings:
Significant energy consumption via allocation of computation power – Whereas PoW networks require allocation of computational power (draining energy in the process) to determine new block commits, PoS networks allow token holders to participate in consensus simply by “staking” tokens.
Prohibitive barriers to entry for prospective miners due to increasing hashrate difficulty – Maintaining top-of-line equipment to keep pace with increasing hashrate difficulty makes PoW mining costly and resource-intensive – whereas, PoS is accessible to both large and small token holders.
The vision of PoS networks is clear: create environmentally friendly blockchain networks that promote decentralization by permitting all token holders to stake assets, participate in the validation process, and earn block rewards. The success of PoS networks is undeniable. Over the past several years, the blockchain industry has seen significant evolution in the direction of PoS networks; just a few years ago, the vast majority of the top 20 projects were PoW forks of Bitcoin, whereas today almost half of the top-valued projects are now PoS.
Challenges of Consolidation & Monopolization of Consensus
Since first introduced, PoS blockchain networks have historically seen staking dominated by institutions and large token holders (“Whales”). Whales are often early-stage investors of a given PoS project with large allocations of tokens vested at Main Net launch. Such concentration of staking power and “Monopolization of Consensus” is troubling because it consolidates control of the blockchain network to a small handful of validators, which can harm the project in a variety of ways, including:
Concentration of voting power;
Single points of failure for malicious network attacks; and,
Network instability.
Each of the above runs counter to the proposed aspirations of many PoS to be truly permissionless, decentralized, and secure.
A Novel Approach to Decentralizing Staking Power
CasperLabs, together with BitMax.io, is taking a novel approach to challenge the status quo of staking power consolidation by conducting an exchange validator offering, or “EVO.” The collaboration between CasperLabs and BitMax.io will provide hundreds of thousands of small token purchasers with fair access to the project’s EVO at the earliest possible opportunity and the most favorable token prices.
Mrinal Manohar, CEO of CasperLabs, notes:
“Our goal in democratizing the distribution and holding of CasperLabs’ native token, CLX, is to encourage a new demographic of stakeholders to take part in the creation and initial validation of the underlying blockchain.”
To date, CasperLabs has not yet conducted any token sales, and all funding has been facilitated via an oversubscribed equity financing of $14.5mm completed in July 2019, with participation from high profile backers such as Acuitas Group Holdings, Hyundai Digital Asset Company (HDAC), RockTree Capital, Blockchange Ventures, Arrington XRP Capital, HashKey Capital, SNZ Holding, Consensus Capital, Digital Strategies and Woodstock Fund.
CasperLabs’ Lead Consensus Researcher Dr. Andreas Fackler notes:
“Working closely with renowned mathematician Dr. Daniel Kane, the CasperLabs team has built a provably safe and live CBC Casper variant that dynamically auto-adjusts to changing network conditions. It can be configured to minimize latency, maximize throughput or choose an intermediate tradeoff. Its core structure, the block-DAG, gives an intuitive picture of the progress towards consensus. And the era system allows running a permissionless proof-of-stake network, where the set of validators is frequently updated according to token deposits. The algorithm includes effective defenses against long-range and resource-exhaustion attacks.”
Fundamentally, a proof-of-stake system requires a significant stake to be bonded to the network at launch to ensure sufficient economic security; accordingly, BitMax.io along with a community of other staking-as-a-service (SAAS) providers will facilitate staking support for CLX on behalf of users at CaperLabs’ Main Net launch.
According to Manohar:
“We had significant interest from institutional investors to participate in our private validator token offering; however, we insisted on providing widespread access. Partnering with a top-tier platform like BitMax.io will be fundamental in facilitating availability to its global user base.”
This means all EVO participants will be part of the founding stake on the Genesis Block of the CasperLabs CLX network and an integral part of the initial security of the blockchain.
Said Shane Molidor, Global Head of Business Development at BitMax.io:
“The BitMax.io team is thrilled to partner with CasperLabs. We are also excited to provide technology support for the EVO as it will grant BitMax.io customers exclusive access to a financing round generally reserved for the institutional investors or ‘whales’ of the industry.”
Conclusion
Registration is now live on BitMax.io to participate in an exchange validator offering (“EVO”) for CasperLabs. $3mm worth of CLX will be offered for sale in the EVO which will be divided into three rounds, with bonus tokens available in the first and second rounds. The first round will be conducted on March 30, at 10:00 a.m. EDT.
The collaboration between CasperLabs and BitMax.io represents a unique go-to-market approach for tier-one blockchain projects that could signify a trend for future projects to follow in the pursuit of decentralization and network resilience.