Finding the major aspects defined by the blockchain trilemma — security, decentralization, and scalability — is difficult in a single chain. The race to engineer a blockchain that hits all three points is ongoing. Many web3 engineers are hard at work figuring out how to create the perfect network. Might the team behind Aleph Zero (AZERO) be the ones that finally crack it?
This guide will look at this innovative enterprise-grade, privacy-enhancing blockchain project and its native coin, AZERO. At first glance, innovation at AZERO suggests the altchain may quickly become a key competitor for its layer-1 peers.
What is Aleph Zero?
Aleph Zero (AZERO) is an enterprise-ready, privacy-focused, proof-of-stake (PoS) layer-1 public blockchain. It’s built with the Substrate stack — an open-source technology kit that enables projects to develop customized blockchains. Blockchain infrastructure company Parity Technologies is behind Substrate.
Aleph Zero seeks to solve the speed, scalability, validation time, and security issues that current blockchains face. The blockchain also uses a novel, peer-reviewed Directed Acyclic Graph (DAG) consensus protocol. AZERO is its native cryptocurrency.
The Aleph Zero Foundation released the first version of its mainnet on Nov. 10, 2021. Prior to this, the founding team began bootstrapping the project in early 2018. They concluded a seed round in 2020 and a public sale earlier in 2021.
Aleph Zero’s co-founders are Adam Gągol, Michał Świętek, Antoni Żółciak, and Matthew Niemerg. The team working on the project consists of over 40 people at the time of writing.
The Aleph Zero project is currently working on tasks grouped in phases. According to its roadmap progress, the project is in phases 4 and 5 of development. Stage 3 enabled transfers of the native token between accounts, a partnership with polkadot.js, and Rust implementation of the network. Phase 4 consists of plans to add smart contract capabilities, a node update mechanism, and the reassigning of validators.
How does Aleph Zero work?
Aleph Zero’s two main components are a proof-of-stake AlephBFT consensus mechanism and a Directed Auxiliary Graph (DAG) auxiliary structure. Let’s take a look at how they work.
Proof-of-stake (PoS)
Aleph Zero merges PoS and DAG. In the PoS consensus mechanism, a rotating committee of validators is responsible for validating transactions and securing the network. Similar to other PoS blockchains, Aleph Zero validators stake AZERO for a chance to validate transactions and add them to the blockchain.
Aleph Zero implements a rotating committee of validators, giving more people a chance to participate in the validation process. Elections make the rotation mechanism possible. Hence, validators change, but their number remains the same. Validators not currently residing in the committee also receive rewards for their support and work.
The electoral process encourages validators to remain active to improve their chances of being voted into the committee one election cycle at a time. Conversely, disincentivizing rules discourage validators from malicious actions against the network. This guarantees network security. Aleph Zero has adopted a manual slashing mechanism until the decentralized governance system is up and running.
Aleph Zero chooses a fixed committee of validators every fifteen minutes. That means 96 committees are chosen every 24 hours (one era). The network rewards participants for their contributions. They can request their payouts after the completion of one full era. 90% of the reward goes to validators and nominators (people that stake tokens through the validator of their choice). The network allocates the remaining 10% to the treasury and the ecosystem fund.
The staking rewards for validators and nominators are proportional to the amount staked. However, nominators get their rewards minus the validators’ commissions. Stakers — also known as nominators — can access their bonded stake after 14 eras. Aleph Zero currently has a total of 104 validators and over 8,000 nominators.
Directed Acyclic Graph
The DAG in Aleph Zero is an auxiliary structure that gathers information on transactions. It acts as an intermediary data structure in reaching the consensus and, therefore, in building the blockchain.
DAGs are generally used in computer science but have made their way into the blockchain space. Blockchain networks are using them to boost transaction throughput and lower transaction fees.
Aleph’s consensus protocol is built on top of the asynchronous byzantine fault tolerance architecture (aBFT). This way, the project ensures that communication among nodes remains effective to an extent, even if malicious nodes are present.
What makes Aleph Zero unique?
Aleph Zero strives to deliver the promises of blockchain technology. These include security, decentralization, high transaction throughputs, and low fees. Below are the features that make this blockchain unique:
- Hybrid consensus protocol: Aleph Zero combines PoS and the intermediary data structure DAG. It also uses the aBFT architecture in its consensus protocol. The project calls this peer-reviewed hybrid consensus protocol AlephBFT. The team presented it at a 2019 conference in Zurich titled Advances in Financial Technologies (AFT).
- Smart contract capability: Aleph Zero supports private smart contracts. The blockchain uses WebAssembly (WASM) instead of Ethereum Virtual Machine (EVM) and the smart contract language ink!
- Liminal: Liminal is a multichain privacy layer. It can be used across all blockchain networks that bridge to Aleph Zero. Liminal was under construction at the time of writing and is based on zero-knowledge proofs (ZKPs) — a technology that allows someone to prove knowledge of information without disclosing related data. Liminal also includes another privacy-related solution called secure multi-party computation (sMPC).
- Cloud storage: Aleph Zero leverages a decentralized file storage system supported by InterPlanetary File System (IPFS).
- Substrate integration: The blockchain integrates with Parity’s Substrate Stack to facilitate widespread adoption. The team has also concluded Parity’s Substrate Builder’s Program.
- Common: The Aleph Zero ecosystem also features Common, a decentralized exchange (DEX) built on top of the blockchain.
- Dynamic fee adjustment: This solution works as an organizational tool during peak network traffic. Moreover, it provides adequate fees based on user participation. A tipping option can also help users prioritize transactions during network congestion.
- Oracle: This bridge allows real-world information that is external to the blockchain to be brought on-chain and thus into the Aleph Zero ecosystem. The project seeks to integrate with most oracle providers on the market to enable greater choice for developers.
What are the benefits of Aleph Zero?
Aleph Zero is an innovative blockchain that offers features beneficial to both individuals and enterprises. Here are the advantages it provides:
- Low transaction costs: On average, transactions on the Aleph Zero network will cost about $0.0003.
- Highly decentralized: Aleph Zero claims it will be the first decentralized DAG-based platform. The project is boosting its level of decentralization through a mechanism of rotating its committee of validators.
- Fast transaction speeds: Aleph Zero’s AlephBFT processed 89,600 transactions per second in a lab test. It achieved a validation time of 416 milliseconds. The project is yet to determine how the network will perform in the real world, especially under heavy user traffic. However, this lab test is encouraging. The possible high transaction speed makes Aleph Zero a suitable blockchain contender for enterprises.
- Privacy for enterprises: Aleph Zero helps enterprises keep their transactions and smart contract computations private while enjoying the speed and security of a public blockchain.
- Large developer team: Aleph Zero has a large team of around 25 developers working on the project. This signals that the network is in a position to continue innovating and improving, thereby attracting more users.
Aleph Zero coin (AZERO)
AZERO is the native coin of the Aleph Zero blockchain. It has a total supply of 300 million coins and annual inflation of 30 million. Through the reward system, the network will add 2.5 million coins to the supply. 10% of this amount will go to the ecosystem fund. The network will distribute the rest to validators and nominators.
Distribution
The Aleph Zero Foundation received 23% of the coins, while the team got 10%. Also, 80% of the coins dispensed to the team have a locking period of one year and are then vested linearly over four years.
Pre-seed funding, contributors in 2018 got 16.667% of the coins. The project vested 50% of these cryptocurrencies for 15 months. During this funding round, the AZERO price was $0.04. In the seed round, the project dispensed another 16.667% of the coins. 28.57% of the coins were vested for six months. The price was $0.057 per coin.
A special early community round saw the team allocate 5% of the coins. All AZERO coins went through a vesting period between 14 to 64 days after the mainnet launch. The price was $0.07. Later, the team distributed 18.33% of the total token supply during the public pre-sale with a 12-month vesting period.
The 2021 public sale price was $0.1, and all allotted coins were unlocked upon the launch of the mainnet. At the time of writing, AZERO was trading at $1.043 with a market cap of $213.5 million.
Wallets & Staking
Users can store their AZERO coins by creating a wallet on azero.dev. Coins can also be stored in third-party wallets, including Vulture, Talisman, SubWallet, and Nova.
Anyone that wants to stake on the Aleph Zero network needs AZERO. The minimum stake for validators is 25,000 coins and 10 for nominators. Staking is possible on Aleph Zero’s dev website or Nova and SubWallet. Additionally, AZERO could become a governance token in the future, allowing holders to participate in the network’s decision-making process.
How to purchase the AZERO coin
AZERO is listed on several exchanges, including KuCoin, Gate.io, Huobi, MEXC Global, Bitrue, and Uphold. Here’s how to buy AZERO on any of these centralized crypto exchanges:
- First, acquire an AZERO wallet, either by creating one on the project’s dev website or using any of the other aforementioned options.
- Once you have a wallet, create an account with the exchange of your choice. Check to see that it supports purchases and trading in your country.
- Complete the identity verification process.
- Deposit fiat currency, or a cryptocurrency, to facilitate your purchase.
- Go to the buy feature and enter the number of AZERO coins you desire.
- Complete the purchase and wait for the exchange to send your digital assets. They should appear in your AZERO exchange wallet.
- Upon receiving the coins, withdraw them by pasting the address of the wallet you created. This will move your coins from the exchange to your AZERO wallet. You can now stake or HODL them.
Aleph Zero may answer the blockchain trilemma
Aleph Zero is a promising blockchain that could give existing layer-1 blockchains a run for their money. Its ability to deliver a high transaction throughput might make it an ideal enterprise-grade blockchain, able to support private transactions and smart contracts. Of course, Aleph Zero is still in its nascent stages of development. For now, it remains an exciting but speculative project to watch.
Frequently asked questions
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