TL;DR: Fuse network is live!, After months of testing, we are announcing the launch of the Fuse blockchain which is a DPoS network for everyday payments. and opening validator on-boarding.
Fuse network is a DPoS (Delegated Proof of Stake) blockchain that supports smart contracts can integrate to advanced payments logic. The network was designed to work as side-chain to Ethereum and plug into the DeFi ecosystem. The Fuse chain long term goal is to scale independently and plug into other networks.
The Fuse network was designed under the premise that:
- Blockchain throughput, which is currently very low, will grow slowly and incrementally over time as on-chain and off-chain scaling solutions which are being developed today, reach maturity.
- All smart contract ecosystems are interoperable and in the long run, value could be moved between them with no friction. Specialised chains will allow building highly custom and use-case specific functionalities and deliver cost reduction across entire verticals.
- In order to use a blockchain for everyday payments, our world’s payment stack with all of its intricacies needs to be rebuilt for the decentralised world.
To that end, we want to make sure we are building a strong foundation for the network which is made to last, by focusing on solving the problems that are unique to our mission:
How to create a system for payments where no single entity can make all the money from code, fees or data.
The Network Consensus
![](https://news.fuse.io/wp-content/uploads/2022/07/1_jSpHJ1bbBBu_9DkU364XYg-1024x576.jpeg)
We believe that a blockchain network works best when it’s maintained and governed by its stakeholders. The larger the stake you have, the bigger interest you you hold in the network, thus the more voting rights you should gain for governing the network. Participation in the network and governance should be made possible for all stakeholders, even ones without hardware or special know-how, in order to create a healthy and flourishing ecosystem.
A DPoS consensus algorithm helps us to achieve this goal. The beauty of DPoS is that by giving engaged users of the network the ability to help steer it, you creating a positive feedback loop and increase the chances of growing a healthy ecosystem.
After experimenting with different blockchain types and consensus mechanisms, we have decided to create an Ethereum based side-chain with a DPoS system, similar to the Tezos consensus mechanism, but implemented on top of Ethereum, using solidity contracts and the Pariy Aura consensus algorithm.
Network Overview
![](https://news.fuse.io/wp-content/uploads/2022/07/1_7zxAHclyz0J2F_ynpxgJkA-1024x385.png)
Validation & Rewards
There are two ways you can participate in governing the network, receiving rewards for doing so. If you have a technical background you can become a ‘validator’, if you are interested in participating but don’t have a technical background you can become a ‘delegator’.
Anyone can setup a node (similar to a mining node in a PoW network) to approve transactions on the network and become a validator. Instead of hashing power, a validator needs to lock (or stake) funds in order to get validation rights. The blocks validated by the validator are proportional to the funds staked. The validator will enjoy the block rewards and transaction fees for the blocks that they validate.
If you would like to participate and do not have special hardware or know-how, you can delegate your stake to a validator and become a delegator. A Validator cannot access the delegator’s stake (it is held in a smart contract) but that stake counts towards the overall validation rights of the chosen validator.. A validator can (and should) pay delegators dividends proportional to the rewards they got thanks to the delegators extra stake (minus a fee the validator might choose to charge them).
Network Attributes
As block times are 5 seconds, we create a ‘Cycle’ of blocks of transactions, this Cycle is a fixed amount of blocks. Each Cycle, a validator set is generated randomly from the eligible validators. The blocks being validated by the Cycle validator are set in a round robin way. The block reward creates steady inflation on the network supply. The validators (and the delegators) can stake their tokens to evade the inflation dilutions.
The network is connected to the Ethereum chain via a bridge. Users are able to transfer FUSE tokens between the two networks. On the Fuse chain, the FUSE tokens are native (like ETH for Ethereum). On the Ethereum network the FUSE tokens are ERC20 tokens. Each cycle, tokens will be automatically minted and locked in the bridge contract on the Ethereum end. This will reflect the new tokens that are created as a block reward in the Fuse chain by the validators.
Fuse tokens that were sent to a bridge contract on one end, will be unlocked on the other side, and sent to the sender. The bridge operators are the chosen validators of the network on that particular cycle. Operators listen to events on one end of the bridge, and sign the release transaction on the other end.
The validators can also vote on changing consensus logic and other parameters from time to time. If a validator misbehaves, anyone can submit proof of that to the network. A validator that is proven to be misbehave will have their stake slashed (given to whoever spotted and reported the infringement on the network rules). This creates a positive and transparent pressure for network validators to act in the correct way.
![](https://news.fuse.io/wp-content/uploads/2022/07/1_vbmJUCzkoznPG8RjhjKhGA-1024x576.jpeg)
Network economics
- Token Initial supply: 300,000,000 FUSE tokens.
- Inflation will be 5% yearly across all token holders and will be distributed evenly between Validators through the block rewards.
- Each block validated will reward its validator with block rewards and fees.
- Block reward is the inflation spread across the blocks:
Block reward = (inflation rate * total supply) / blocks per year - Fees are the transaction fee of the validated block , paid by users of the system.
- In order to be a validator, one should have at least 3,000,000 FUSE tokens staked at their address (directly or delegated).
- Tokens are staked by sending them to the consensus contract and specifying the validator (not specifying means that the sender is the validator).
- Validation rights can be delegated to a different address.
- The validator is the one that receives the fees + reward, however they can compensate their delegators in any way they choose.
- The validators set for each cycle are chosen randomly, ready for the next cycle to begin.
- One Cycle is approximately a day long — 17,280 blocks.
- Validators that misbehave will have their stake slashed.