Zilliqa the first sharded network (how eth 2.0 is solving its scalability and many others like elrond) but after using it since I have found issues with the network

Crypto Currency: Zilliqa (Anquan Capital and Zilliqa Research)
Trading Ticker: ZIL (gZIl governance token)
Date last Reviewed: 28/12/2020

Objective Of Product:
Zilliqa is a layer 1 crypto currency that has Defi, high scaling, smart contract capabilities and is working on an ERC20 token bridge which is due to be launched in Q1 of 2021.

It is Zilliqa’s mission to support highly scalable computations such as automated auctions, financial modelling, advertising supply chain, shared economy to name just a few. Zilliqa focuses on such specific applications (dApps) with throughput and scalability requirements that cannot be met today.

White Paper Notes:

  • Open permissionless network
  • 10,000 nodes will match transaction capabilities of Visa/mastercard with lower fees
  • Proof of work to establish identities to perform sharding
  • Estimated cost of running a node 1/10th of eth
  • Consensus does not need PoW
  • PoW can be carried out on ZIL every few hundred blocks so miners reach consensus on several blocks leading to more stable payout.
  • Smart contract language is smart contract friendly
  • For instance, the Zilliqa platform will allow users to build distributed advertising networks, decentralized exchanges, conduct parallel auctions, deploy MapReduce-style trading algorithms, run a shared economy, etc.
  • Suggests that scalability on eth and bitcoin are limited due to potential issues with legacy transactions.

Potential Limitations of existing blockchains to service digital supply chains:

  • High volume : would need to process billions of ads and impressions per day eth limited to 1 million (pre eth 2.0 sharding) bitcoin 50,000.

  • Paralell bidding: existing blockchains are issuing new bid tokens to prevent this however in advertising this is not possible. When demand for token bids arise it can lead to capacity spikes of 1000% in minutes which many platforms cannot cope with.

  • Correctness : In existing smart contract platforms it is hard to guarantee that the right price has been given the bidder has to trust the seller even with honest exchanges contract code can have vulnerabilities that may lead to an incorrect outcome of auction.

  • Fairness : None of the Buyers or sellers get disadvantaged in the auctioning process. It is not clear how to argue about fairness in existing smart contract set ups.

  • To resolve such gridlocks, Zilliqa leverages an orchestrated secure network sharding scheme that can automatically divide, say, bidding requests into a subgroup of nodes. All subgroups can simultaneously process different ad space auctions. They also lock the deposit from different bidders before the final bidding results are obtained. This significantly improves the throughput of such an application.

  • This means that the price fairness is guaranteed aby both the consensus as many blocks are processing the transaction due to sharding and on the contract level. This Vs other system that have single nodes calculating the outcome loses this advantage.

  • Zilliqa has computational and network level sharding

  • PoW is used to prevent sybil attacks and perform sharding

  • This can be easily replaced with PoS due to is not being used on the consensus level. PoW has been chosen at this stage due to existing comprehensive research about its security capabilities. PoS is still young and needs further study.

  • Consensus protocol is Byzantine Fault Tolerance. This ensures blocks are definitive without long conf. times and eliminates the need for “longest-chain” rule.

  • BFT need a large bandwidth however so do not scale well to large number of nodes,

  • Looking at scalable signature scheme CoSi to resolve this however it is not designed for hostile environment like blockchain. Zilliqa is developing ways around this.

  • Transaction sharding:

  • Account based design. Allows sharding based of sending accounts.

  • Zilliqa provides atomic transaction commits without cross shard communication which is costly and complex.

  • Transactions processed a-synchronously with consensus off the blockchain. With a reject and retry to do this when the majority of the nodes become up to date.

  • Computational Sharding and sharding-friendly smart contract language:

  • Existing forms are too cost prohibitive to carry out computations at scale.

  • Computational sharding allows contract creators to allow a tolerance level for example ¾ of shards must reach consensus to execute.

  • Gas fees are tied to computational power required and contract creators can choose how many nodes are required to calculate each element of the contract. For more complex algorithms they may want more and simple will want less. So cost scales with the complexity of the financial derivative being used.

  • The Scilla Program language is not commonly used which could stifle future Defi projects coming to the platform as such they have made a front end language similar to Solidarity.

  • Profitable Mining:

  • Once the identities are established, nodes can reach consensus on several blocks in a row. As a result, a PoW can be performed after, say every few hundred blocks. This is in contrast with the use of PoW as in Bitcoin and Ethereum where, a new PoW solution is required to reach consensus on every new block. As a consequence, the energy cost often associated with PoW per block will on average be very low in Zilliqa.

  • Since miners can reach consensus on multiple blocks during an epoch, they are guaranteed more stable rewards with low variance.

  • Zilliqa due to high throughput for miners means a lower payout per transaction but more volume so miners make good money still on volume and users have lower fees thanks to sharding and consensus happening off the block chain and PoW needed to be done once every few hundred blocks instead of every time.

  • Comparison to Existing Techniques:

  • Many proposals have surfaced to scale up the transaction throughput of existing blockchain protocols, for instance, re-parameterizing the original Bitcoin protocol (e.g., increasing block sizes), moving as much computation off-chain (e.g., micropayment channels and lightning network), creating hierarchy of blockchains (e.g., sidechains). None of these protocols directly make the blockchain protocol itself more scalable. Zilliqa targets the heart of the scalability problem — its own blockchain. Having said that, any of these scaling mechanisms can be used on top of Zilliqa to further scale its throughput.

  • Sample Applications Enabled By Zilliqa:

  • Automated High-Volume Auctions: Ideal for token DApp suite with parallel autions

  • Decentralized exchanges: Will allow decentralised exchanges to run almost all major components on the blockchain itself. this prevents the need for centralization or slow transactions

  • . Applications Requiring Highly Reliable Results : Due to sharding complex contracts that require precise outcomes to prevent large costs can allocate large number of consensus groups coupled with sharding for accurate results.

Real World Applications including existing partnerships:

  • Increased marketing efficiencies blockchain would eliminate malicious actors and middlemen making advertising delivery cheaper.
  • Middlemen who only sell ad impressions would be eliminated.
  • Would also allow to look at the success of the marketing campaign through the blockchain.
  • BAT, aDChain, AdEx have plans to run digital ad supply chain on blockchain.


  • The Zilliqa team consists of computer scientists with PhDs from some of the world’s best universities and research institutions including Princeton, Berkeley, Inria and NUS. The team also consists of developers with many years of secure software systems-building expertise. The advisors to the project include established academics in cybersecurity, technology entrepreneurs, bankers and leading experts in the cryptography community. The Zilliqa team proposed the theory of sharding in an academic paper in 2015, and since then the protocol has been under research, refinement and active development (through Anquan Capital Pte Ltd, a Singapore-based deep technology company). Zilliqa’s infrastructure has been trialed in the financial services sector, for example enabling transparency and efficiency that were hither to not possible in the Over-The-Counter (OTC) securities markets.
  • Xinshu Dong (CEO) PHD, NATIONAL UNIVERSITY OF SINGAPORE Xinshu is a scientist and practitioner in building secure systems, ranging from blockchains to web browsers and applications. He was a technical lead for several national cybersecurity projects in Singapore. The outcome of his research has been published at top international conferences. More recently, he led the research and development of Anquan’s proprietary scalable and secure blockchain, deployed for financial and ecommerce applications. He is currently leading the Zilliqa team for developing a new public blockchain, Zilliqa, for high-throughput applications.
  • Prateek Saxena (Chief Scientific Advisor) PHD, UNIVERSITY OF CALIFORNIA, BERKELEY Prateek Saxena is a research professor in computer science at National University of Singapore, and has a PhD in Computer Science from UC Berkeley. He works on blockchains and computer security. His research has influenced the design of browser platforms, web standards and app stores widely used today. He has received several premier awards such as the Top 10 Innovators under 35 (MIT TR35 Asia) in 2017.
  • Yaoqi Jia (Head of Technology) PHD, NATIONAL UNIVERSITY OF SINGAPORE Yaoqi gained his Ph.D. in Computer Science from NUS . His research interests span web security and privacy, network security, distributed systems and applied cryptography. He has proposed solutions to addressing consensus and privacy issues in P2P systems. His work has been published in top-tier security conferences, got acknowledged by various vendors including Google and Apple and has received attention from the media including Dailydot, Gizmodo and Techspot.
  • Amrit Kumar (Head of Research) PHD, UNIVERSITÉ GRENOBLE-ALPES (FRANCE) 13 Amrit holds a PhD from Université Grenoble-Alpes , France and was hosted at Inria’s Grenoble center. Prior to his PhD, he obtained an Engineer’s diploma from Ecole Polytechnique, France, where he studied Computer Science and Mathematics. His research interests broadly span security, privacy and applied cryptography.
  • Juzar Motiwalla (Chief Strategist) PHD, UNIVERSITY OF WISCONSIN - MADISON Juzar Motiwalla has investment and board-level experience with global technology startups. He was a venture capitalist responsible for investments in Asia and Silicon Valley. M&A exits with leading US and Japanese companies were secured for companies he was involved with. Prior to his venture capital journey he was the CEO of a 350-person computer science research lab in Singapore.
  • Max Kantelia (Chief Evangelist) BSC (HONS) ENGINEERING SCIENCE Max is a financial services entrepreneur with 25 years’ experience of building professional services and technology firms in Europe, the US and Asia. He is a Co-Founder of Anquan Capital in Singapore and is on the board of Aeriandi (Oxford) and untapt (New York), both fast growth deep technology companies in the areas of voice technology and artificial intelligence. Max is an engineering graduate and started his career at GEC Marconi designing airborne radar systems. He was selected by EY as one of Asia’s Top 100 FinTech contributors in 2016 and is a part of the London Mayor’s Internationalisation programme.
  • Jun Hao Tan (Core Dev) BACHELOR OF COMPUTER SCIENCE (HONOURS), NATIONAL UNIVERSITY OF SINGAPORE Jun Hao is a practitioner in various areas in the Computer Science domain including blockchain, web security, trusted computing and program analysis. He was also awarded the National Infocomm Scholarship and graduated from the National University of Singapore (NUS) with a bachelor degree in computing science with specialisation in information security. At NUS, he co-founded NUS Greyhats, a cybersecurity interest group, which has won numerous cybersecurity events. He also co-founded Edgis, a non-profit special interest group provides a platform where infosec enthusiasts can meet, exchange ideas with others and contribute to community.
  • Advisors to Zilliqa:
  • Evan Cheng M.S., SYRACUSE UNIVERSITY 14 Evan is an engineering director at Facebook, where he oversees development of programming languages, runtimes, and compilers. He received the 2012 ACM Software System Award for his work on LLVM at Apple.
  • Aquinas Hobor PHD, PRINCETON UNIVERSITY Aquinas Hobor got his undergraduate degrees from the University of Chicago and his PhD in computer science from Princeton University in 2008. He does research in computer theory, including semantics, verification, machine-checked proof, logic, complexity, and algorithms. From 2008-2011 he was a Lee Kuan Yew Postdoctoral Fellow in the School of Computing, National University of Singapore. Since 2013 he has been an assistant professor with a joint appointment between Yale-NUS College and the School of Computing.
  • Alexander Lipton PHD, MOSCOW STATE UNIVERSITY Alexander Lipton is Founder and CEO of StrongHold Labs, Partner at Numeraire Financial, Co-Founder and Advisor of Distilled Analytics, Connection Science Fellow at MIT Media Lab and Visiting Professor of Financial Engineering at EPFL. He is an Advisory Board Member at UCL Centre for Blockchain Technologies, Clearmatics and Numerix. His prior experience includes Managing Director at Bank of America Merrill Lynch, leading the quant group. Earlier, he also worked for Citadel Investment Group in Chicago, Credit Suisse, Deutsche Bank and Bankers Trust. While working full time as a banker, Alex held several prestigious academic appointments, including Oxford-Man Institute, Imperial College London and the University of Illinois. Before switching to finance, Alex was a Full Professor of Mathematics at the University of Illinois and a Consultant at Los Alamos National Laboratory. He received his undergraduate and graduate degrees in pure mathematics from Moscow State University. In 2000 Alex was awarded the first Quant of the Year Award by Risk Magazine. Alex is the author of two books and a hundred papers on hydrodynamics, magnetohydrodynamics, astrophysics, chemical physics, and financial engineering.
  • Loi Luu PHD, NATIONAL UNIVERSITY OF SINGAPORE Loi is a researcher working on cryptocurrencies, smart contract security and distributed consensus algorithms. He is also a regular invited speaker at Bitcoin and Ethereum workshops such as DevCon2, EDCON. Loi believes in the force of the Ethereum and Blockchain technologies and much of his work revolves around this community. He developed Oyente, the first open-source security analyzer for Ethereum smart contracts. Loi also cofounded SmartPool, another open source project which embraces decentralization of mining pools in existing cryptocurrency. He continues to champion decentralisation and 15 trustless properties of the Blockchain with KyberNetwork, taking inspiration and developing value for the community.
  • Stuart Prior Stuart Prior is a Fintech veteran with 20+ in Corporate and Investment Banking . Stuart specializes in leading corporate banking initiatives for the adoption of blockchain technology and Crypto Finance. Throughout his career he has focused on the development of banking technology applications including Ultra High Frequency / Low Latency trading and the development of large scale data management platforms. Over the years he has worked with many of the largest banks in the world, including Credit Suisse and Deutsche Bank, and will bring his expertise to help guide Zilliqa’s development and practical applications.
  • Christel Quek BSc SOCIAL SCIENCES, NATIONAL UNIVERSITY OF SINGAPORE Christel has built brands and digital businesses since the advent of the digital economy. She is a Co-Founder of BOLT, a live TV & gaming service (over 3M users in Kenya, Southeast Asia, and Latin America), and the Founder of pin8cle, a strategic consultancy to turn start-ups to rev-ups. Previously, Christel founded Brandwatch’s first office in Asia-Pacific (fast-growth, digital intelligence and analytics), was the Head of Content at Twitter across their International Markets, and led Social Business for Samsung Asia. Christel was selected by The Guardian as one of the top global digital strategists, Campaign Asia-Pacific as a Woman to Watch, and Business Insider as one of the 30 best executives to follow on Twitter. More recently, Christel delivered the commencement speech at the National University of Singapore in 2016, and has contributed articles to Harvard Business Review and Huffington Post.
  • Ilya Sergey PHD, KU LEUVEN Dr Ilya Sergey does research in the area of programming languages, program analysis, and formal verification. Prior to joining academia, Ilya has spent a part of his career in industry, working at JetBrains Inc., a world-leading company in creating integrated development environments for software developers. His joint research efforts with the members of Zilliqa team have already resulted in the inception of Scilla, a programming language for mechanically verified smart contracts.
  • Vincent Zhou Vincent is founding partner of FBG Capital , with extensive experience in digital assets trading and investment. Vincent is also an early investor of a broad spectrum of blockchain companies and projects. He is considered as one of the most well-connected and visionary crypto hedge fund managers in Asia.

Git Hub Activity and road maps:

  • Good levels of activity
  • Primarily coded in C++ 86.9%, Python 4%, CMake 2.3%, Shell 1.8%, C 1.6%, Cuda 0.6%, Other 0.1%
  • Activity seen as recent as 21 days ago (21/12/2020)
  • The focus of Zilliqa Research is to lead the research and development of the platform from an initial implementation to a full public blockchain platform. The mission of Zilliqa will remain to further increase the scalability of the blockchain and dApps running on it to gain 100x to 1000x over today’s public blockchain platforms. To achieve that, there is a long journey of innovation and development. We briefly outline some of the research ideas that we would like to explore.
  • State Sharding The first release of Zilliqa achieves scalability without state sharding. In essence, state sharding will alleviate full nodes from storing and receiving all blocks and transactions. This way it can further reduce the storage and communication load for blockchain nodes, and thus constitute another scaling-up factor to the throughput. However, it is non-trivial to design a secure and efficient state sharding scheme, as cross-shard communications arising from state sharding may outweigh the performance gains. More research needs to be done to address such additional complexity
  • Secure Proof-of-Stake (SPoS) Proof of stake ( PoS) schemes are a promising direction for efficient blockchain consensus protocols. However, at Zilliqa security has always been a top priority. We believe PoS schemes are still at an early stage, and the security and decentralization of such schemes are still to be further studied and analyzed. Thus, we base Zilliqa’s building blocks on schemes that have been shown to be secure over time, e.g., proof-of-work and byzantine fault tolerance. However, given the significant performance gain from PoS for consensus algorithms, it is worthwhile investigating further into the PoS paradigm, in search for a secure and efficient PoS scheme for Zilliqa.
  • Storage Pruning We will also explore ways to securely prune the dated blocks stored on the blockchain to reduce the storage requirements and ease the joining process for new nodes. We may consider multi-grade storage, compression of blocks and transactions as possible solutions
  • Cross-Chain Support Zilliqa has every intention to complement other public blockchains and build a healthy ecosystem to provide end users a broad spectrum of platforms of choice for their applications. To this end, Zilliqa will seek technical solutions to support gradual cross-chain communication and potentially enable cross-chain applications.
  • Privacy-Preserving Computation It is desirable by financial modeling applications to have strong privacy and intellectual property protection when running on Zilliqa. We will conduct more research into leveraging efficient cryptographic schemes that can render such protection. For instance, we plan to explore solutions that re-encrypt different pieces of sensitive data with operation-specific homomorphic encryption schemes and dispatch the data to specific consensus groups for performing a single operation on it. For instance, certain consensus groups are tasked to only perform addition, while others multiplication, for greater efficiency
  • [6] Scilla: a Smart Contract Intermediate-Level LAnguage, Ilya Sergey, Amrit Kumar, and Aquinas Hobor, https://arxiv.org/pdf/1801.00687.pdf

Tokenomics (supply, Rewards, Centralisation, Staking, transfer speeds and costs):

  • One of the most solid parts of the whole project they are based on one of the most forward thinking free market capitalist societies on the planet and it shows in spades here.
  • All tokens are either full de-centralised and distributed already or are being mined.
  • The Tokens have a supply cap that’s not too high and the staking rewards go up the less people doing it due to the circular economy. Currently staking has a 16% yield but it has been above 50%. This also mines the 600k Gzil governance tokens in the short term leading to encourage people to stake over speculating as this token could be worth thousands of dollars due to its key role in the system and low supply.
  • Tokens are burnt on use then sent to a 0x0 pool to be circulated back in though staking and mining rewards.
  • In the short term to establish the network liquidity and reduction in circulating supply for price appreciation is needed this is done through the above staking rewards removing the total circulating supply.
  • Along with such incredible fundamentals I am bullish on this being as a minimum a top 20 token.

Sharding have evidence of 2800 TPX vs visa and master card at 8000. However the more nodes and users it gets the faster it is so can easily surpass this.

Competition and moats

  • The main moats are the way sharding is done in an entirely decentralized manner vs Polkadot and Etherium 2.0 they are also the first mover with years ahead of the others.
  • Polkadot, Neo, Cardano, Etherium, Elrond, Algorand competitors.

Corporate Remuneration and source of profits
The initial capital raised gave them finding for a minimum of 3 years which would bring them to July 2021. They have partnered with Pepsi co I have yet to discover if they are profiting from this or not so further funding will need to be accessed in the near future assuming they don’t have existing revenue streams through the platform already. ( further investigation required)

Capital investment/ funding
thanks to the tremendous support from all over the world, we successfully concluded our Token Generation Event (TGE) by January 2018, having raised roughly US $22,000,000 from early and community contributors. We estimate such funding will be able to support the research, development and operations of the project for at least 3 years

Pre mined/ Mined/ amount held by developers

  • 60% pre mined launched as a token sale for $0.003 per token in January 2018 originally an ERC20 token. Other 40% added to supply through mining.
  • 80% in circulation withing 4 years 100% in 6 is the teams target.

Security of platform/ potential weaknesses or malicious manipulation including from development team (see XRP Ripple)

  • As shown in the white paper the decentralisation of the token, Byzantine Fault tolerance consensus protocol and sharding all add to the platforms security.
  • This combined with the teams cautious approach (not jumping on PoS until its further tested) makes this a really secure platform.

Liquidity and trading volume:

  • This coin has just gone through a pump and dump cycle however it sits at $575 million in volume over a 24hr period which is good for a sub top 20 coin and has a market cap of £693 million.
  • The coin is up 1,687.38% Year 2020 to date (28/12/2020) driven largely by the tokenomics and fundamentals until the recent pump which was entirely price speculation. It has since retraced to the 4 hr 20 day trend line it has held and is steadily growing in price which is encouraging. It is still yet to reach is previous all time high of 17 pence (23 cents) which was achieved in a 2018 bull market. I am confident it will achieve at least these levels in the medium term however it will face major resistance around these levels.
  • Its also has an upcoming ERC20 token bridge to be launched Q1 of 2021 depending on both the success and how close they are to the deadline will have a strong influence on investor confidence and price action going forward. See Cardano (ADA) for the effect on endless delays and missed deadlines despite a very strong product on how this can suppress price and investor confidence.

Current and potential price/ market capitalization:

  • As stated above it sits at £693 million ($934 million)
  • With Cardano and Polkadot at £3.8 billion ($5.12 billion) and this being a more established project with just as strong a team with a similar scientific paper approach design principle I would expect it to align with these projects.

Legislative concerns:

  • With the SEC pursuing Ripple for the XRP scandal the premined tokens could be a problem however many platforms have used this. Also Ripple had other issues with token dumping
  • This is based in Singapore the financial centre of Indonesia and very capitalist free market this is a very good location the country is also very pro crypto.

Current Market sentiment
The market seems to be looking more and more at this project for what it is and will steadily install itself as one of the premier projects. I believe the reason this has been under the radar for so long was it launch into the peak of such a parabolic bull market and the subsequent catastrophic loss in price leaving many investors with a bad taste in their mouth. (out dated)

As mentioned in the title there has been a lot of issues especially with the binance node with halted transactions and withdrawls and deposits being stopped. I’ve not looked at it in a while so this may have been resolved as the team were working on it they are pioneering sharding to be fair. I do hold 1 GZIL (100k max supply) and a few zil tokens still but not much.

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