The common misconception the most people have about Blockchain technologies is that it has limited usability due to scalability issues and its very speculative nature. While the latter might hold, talented engineers have come up with viable solutions to tackle scaling issues – one of which is to change how blockchain consensus works.
Today, we interview the Co-Founders of StakeWith.Us, a secure Blockchain Infrastructure Provider for Proof-of-Stake based networks, to learn more about the Proof-of-Stake ecosystem as well as the services they provide. StakeWith.Us recently secured a USD 600k seed round funding from SGInnovate (Non-profit, Deep Tech fund backed by the Singapore Government) and LuneX Ventures (Blockchain arm of Golden Gate Ventures).
Thank you for taking time off for this interview on short notice. How did you guys venture into the blockchain space and how did StakeWith.Us come about?
Mervyn Chng: The three of us fell into the blockchain rabbit hole back in early 2017. It was the Initial Coin Offering mania with lots of projects raising money to fulfill the vision of building decentralized infrastructure or applications for the near future. We met each other at local community events and meetups that feature up and coming projects that are looking to raise.
Oliver Wee: Most people entered the industry as speculators and not for technology. The same was for us initially, but along the way, we learned to appreciate the value proposition blockchain tech brings to the table, such as immutability, censorship resistance, and security for a network.
Michael Ng: We made quite a bit of private investments along the way, and when these projects are ready to launch, they started asking around for validators to bootstrap their network. We decided to run these “validators” ourselves since we hold tokens and know others who might require such a service.
Are validators similar to miners? If I recall correctly, miners need to purchase hardware to “mine” Bitcoins, why do you need tokens in this case?
Michael Ng: Validators perform similar functions in a Proof-of-Stake (“POS”) network as miners in a Proof-of-Work (“POW”) network to produce blocks and validate transactions. However, the requirements of running miners VS running validators are very different due to how consensus is derived for each network.
Mervyn Chng: The action of adding new blocks to the Bitcoin network via computational power is known as POW. Together with a property known as the longest chain of work, consensus on finality is determined. Finality is a measure of how long one has to wait to be reasonably sure that transactions on the blockchain are irreversible.
On the Bitcoin network, it typically takes 10 minutes to mine a block and six block confirmations to confirm finality – which is long in this day and age considering that payment confirmations in the real world are convenient and fast. You can pay via credit card or an application on your phone, and the transactions get confirmed within seconds.
Oliver Wee: POS is a newer, innovative way to determine consensus on finality within a short time (5 seconds), which makes it perfect for real-world usage. Through a mechanism known as staking, individuals are allowed to utilize tokens with a validation node to validate transactions and broadcast new blocks – in return each staking participant earns a network inflation participation reward on every block. Computational resources on POS networks are utilized efficiently to process transactions as opposed to wasting it on processing cycles on mining node. POS networks are also less hardware-dependent, and together with delegation functions, you can effectively participate in bootstrapping any network as long as you have tokens, a computer, and an internet connection. POS networks are built for real-world applications.
Are there any tradeoffs for POS-based networks?
Mervyn Chng: POS networks are unproven at the moment and is susceptible to more potential attack vectors as compared to POW networks. Unlike POW networks, there are inbuilt punishment mechanisms known as slashing conditions for malicious actions. Slashing refers to the act of deducting staked tokens from a malicious validation node. If you try to attack a POW network and you fail, the only loss is money spent on the computational resources. But if you or your validator tries to strike a POS network and fail, you lose a portion of your staked tokens.
Oliver Wee: On top of malicious slashing risks, POS networks also have minimum service levels for validation nodes. Your staked tokens will also be slashed if your chosen validator did not meet the minimum service level. As such, running validation nodes on POS networks requires a high level of technical competency and emphasis on security for hardware, network, and application layers.
So what is your business model?
Michael Ng: As a validator, we take a cut of the network inflation yield, which is automatically deducted by the protocol itself. We also offer white label services where anyone can run validators under their branding while we handle all the technical stuff like upgrades, monitoring, etc., in a non-custodial manner. You can check out the supported projects on StakeWith.Us and drop an email to email@example.com if you didn’t see the project you like – we will consider supporting it if we see the substantial interest!
How can regular folks participate in staking and learn more about the projects?
Mervyn Chng: For folks who already familiarized with ways to purchase and manage cryptocurrencies, you can go directly to our Medium to read through project-specific delegation guides.
Michael Ng: Or join our Telegram group and drop your questions! The barrier of entry to stake tokens are still relatively high – for folks that are brand new or curious to learn, it’s best to talk to us directly. We also post and retweet essential news concerning the projects, so give us a follow on Twitter and subscribe to our monthly newsletter: Staker Digest.
Oliver Wee: That being said, we highly suggest that you do your due diligence on each project before staking your tokens with us.
Cool, thank you the StakeWith.Us team for your time again!
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