The Lisk platform is a blockchain platform that has built its own network and token to serve as the foundation for building, distributing, and deploying decentralized applications (DApps).
SHowever, Lisk is much more than that, thanks to the fact that its structure is designed to be fast and scalable, thanks to the implementation of sidechains. In this way, its developers ensure a highly flexible construction. As a result, Lisk is optimized for high-volume DApp deployment, which has allowed it to become a widely used blockchain platform for this purpose.
Origin and history of Lisk
The history of Lisk begins in May 2016, at which time its founders, Max Kordek and Oliver Beddows, decided that it was time to create a platform for the deployment of decentralized applications that would overcome the weaknesses of Ethereum. Thus, since then, the development of Lisk began, which would be a blockchain platform with its own network and resources, building from scratch everything that was needed for the plan of its creators.
The idea to build Lisk was based on a completely modular and decentralized system. In its central part, Lisk would have a mainchain, while DApps developers could create sidechains linked to it. The idea was to keep the computing needs of the DApps separate from the computing needs of the main network, and to unite the ledger of these chains (mainchain and sidechains) through a secure consensus system. In this way, Lisk could easily scale to meet the needs of its users.
However, Lisk's innovation did not end there. In the world of smart contracts, developers are used to struggling with programming languages. Languages that, in many cases, require a complete study to know their characteristics and particularities. But in Lisk, the decision about the programming language to use to create DApps is radically different. Thus, instead of creating a new language, the Lisk developers opted to use JavaScript, a widely known programming language, and the most widely used in Web technologies.
The decision in this case had quite an intention: have a mature, well-known language and hundreds of tools that can facilitate the creation of DApps by developers. In addition to this, the development team had the use of the consensus algorithm DPoS, for the network, aiming for a high speed. As a result, Lisk had a lot going for it to accomplish its goals.
By February 21, 2016, the Lisk team started with the launch of their ICO to boost the development of their project. At that time, a sale of 100 million tokens was made with an average price of $0,07 and a raise of $6,5 million.
Thus, on August 29, 2018, after two years of development and testing, the Lisk Core 1.0 version was released. This day the Lisk mainchain would be launched to the world, and it would begin to show the world all its potential.
Knowing how Lisk works
First of all, you should know that Lisk has its own blockchain and network of nodes. That is, it does not depend on other blockchain projects (such as DAI, which depends on Ethereum, as this is an ERC-20 type token). That said, you already know that Lisk is its own blockchain network and that it has its own token, called LSK.
But how Lisk works is much more complex than this, and here we will show you its main parts.
A network of its own, decentralized and modular
First of all, Lisk has a decentralized network of nodes, in which each node can serve as a means of connecting to the network or as a validator. Currently, the Lisk network has at least 600 connected nodes all over the world. The installation of these nodes is completely free, that is, anyone can install a Lisk node without problems. To do this, what you have to do is download the Lisk Core software and install it on your computer, something you can do following these instructions.
Now, the main difference between the Lisk network and the vast majority of blockchain networks is that Lisk uses a structure of mainchain and sidechains by default. The mainchain or main chain is where the record of all the operations that are carried out within the Lisk network is kept. Whereas, sidechains are secondary networks, mainly created by DApp developers on top of Lisk. These are created in order to generate an alternate and exclusive operations report for those who are connected to said sidechains and the associated DApps. The idea of this system is to avoid saturation within the mainchain and allow fast use of resources within the network by dividing the workload.
Of course, the data and logs from these sidechains are then moved to the mainchain. This is precisely what allows you to maintain control over the resources that are mobilized throughout the network. This prevents cheating, double spending or any malicious activity within the network, providing security to its users.
DPoS, a high-speed protocol
On the other hand, Lisk has decided to take its scalability efforts a step further. While sidechains are fast, even on Proof of Work systems, Lisk has decided to use DPoS, to make the network much faster.
Delegated Proof of Stake or Delegated Proof of Participation (DPoS), is a fast consensus algorithm that makes it possible to produce blocks and validate transactions very quickly and without significant energy costs. DPoS forces the generation of blocks to be through a voting system, in which users who stake on the network can vote for a delegate or representative. Once the group of delegates has been chosen, they have the ability to generate a block, validate the transactions and submit said new block to a vote among themselves. If the block is accepted by the majority of the delegates, then this block will be taken as valid and will be taken to the blockchain for registration.
In Lisk, the delegates that can be activated for each generation process are 101 delegates, and they are the ones who have the power to create, verify and validate the new block, with which they earn a reward when they finish their work. Meanwhile, delegates who have not been elected for a generation period aim their computational power at keeping the sidechains secure, thereby also receiving rewards tailored to the characteristics of each sidechain. In any case, the Lisk network delegates always have a guaranteed job, in order to maintain the security of the network and all users.
A cryptocurrency of its own
Another important point in the operation of Lisk is its cryptocurrency, the LSK token. The LSK token is the native token of the platform and its functions include:
- The ability to allow Staking for the operation of DPoS (Registration and Voting of Delegates)
- The anchoring of sidechains and other tokens within Lisk.
- Configuration of multisig or multisignature accounts.
- Registration of a second password for the account.
- Send and receive value through the Lisk platform, including its use within the DApps of the system.
Thanks to the use of DPoS, sending LSK from one account to another is a very fast action, in fact, it only takes on average about 10 seconds for a transaction to be confirmed (block generation time). Plus, a transaction with two minutes (12 confirmations, can be considered immutable within the system).
This tells us that LSK is a very secure token, with a high confirmation speed and, additionally, very cheap to send, since the transaction fees are very low. In fact, on average a transaction can cost around 0,1 LSK (something like $0,3) per transaction.
Another important point of the LSK token has to do with the tokenomics of this cryptocurrency. First of all, LSK had a pre-mined supply where 100.000.000 LSKs were created and distributed during the ICO in 2016 for the development of this project.
This was possible since the total supply of LSK is not limited, and with each new block more LSK tokens are produced. This has meant that there are currently more than 128.166.445 LSKs.
On the other hand, the inflation rate of the currency has been adjusted throughout its operation. In fact, the inflation rate has been adjusted following these parameters:
- Block 1.451.520 – 4.451.520 5 LSK per block – 15,77% inflation in the first year.
- Block 4.451.520 – 7.451.520: 4 LSK per block – 10,9% inflation in the 2nd year.
- Block 7.451.520 – 10.451.520: 3 LSK per block – 7,37% inflation in the 3rd year.
- Block 10.451.520 – 13.451.520: 2 LSK per block – 4,58% inflation in the 4nd year.
- Block 13.451.520 – ∞: 1 LSK per block – 2,19% inflation in the 5th year.
A framework for developing DApps
The development of DApps requires the creation of tools that make it easy for developers to create such applications. And, in this case, Lisk has done perhaps one of the best jobs in this regard. First of all, Lisk has designed its entire SDK around the JavaScript programming language, which greatly eases the learning curve for designing DApps for this platform. Second, the SDK allows you to develop both DApps and sidechains that take advantage of the power of Lisk, to integrate DApps on top of them.
Thanks to these two features, Lisk allows you to develop DApps that integrate natively and without major problems with the web applications that we already know. For example, developing a cross-platform messaging app would be as simple as using your favorite JavaScript framework, adding it to the power of the Lisk SDK, and you would already have everything you need to make cross-platform messaging DApps that harness the power of the Lisk blockchain. Of course, this is not the limit, in fact, to synthesize we can say:
If you can imagine it, you can create it using Lisk.
Another very useful feature is that the Lisk SDK allows you to create alternative tokens that can have their own space on a Lisk sidechain. This type of functionality allows developers to create tokens with the properties they want at any time. But the best thing about this is that these tokens do not overload the Lisk network.
As such, the tokens run on their sidechains and are anchored to a series of Lisk tokens, so the developer can manage this token within the sidechains as desired, and ultimately post the actual moves on the Lisk blockchain with the as few transfers as possible, to avoid overloading the system.
At this point, the operation of Lisk tokens is very similar to what we can see on the Lightning Network, where you can move satoshis as many times as you want. But, only when the channel is closed are those movements finally settled in the Bitcoin blockchain with a transaction that synthesizes all those movements.
In addition to this, the developer of a DApp can add special functions such as:
- Control of actions. A security measure that prevents spam. To do this, both the mainchain and the sidechains set up a transaction cost that makes it possible to avoid this type of behavior.
- Operations can be performed between the sidechain and the mainchain, and vice versa. The anchor between the sidechain and mainchain tokens allows bidirectional sending and receiving of value. Thus, a user can transform LSK tokens into some special token within a sidechain, or do the opposite, to withdraw value in LSK. Of course, this is a special process and is controlled by network consensus rules and standard SDK programming.
- In the event of a sidechain failure (or abandonment), you will be able to withdraw your funds once the sidechain owner releases them. This is a controversial security model, but useful for cases in which the application requires this type of security process.
- Control of hard forks. Hard forks can be very problematic, especially when they require major changes to the way a chain works. However, Lisk offers the ability to easily update your sidechains without affecting the mainchain in any way. In a nutshell, developers have a tool to enhance their DApps that doesn't depend on updating or changing parameters on the mainnet, and all the hassle that comes with it.
Is Lisk really decentralized?
A controversial point in Lisk is if it really is a decentralized platform. Lisk has a network of nodes, a mainchain, and the ability to create sidechains that can be used to run DApps. It even has a token and allows the creation of new tokens. All of these are things that only blockchains can do. Certain? Well, the truth is that the short answer to that is: No.
All of the above can be done without the need to use a blockchain. For example, a DAG can do it, but it is the blockchain that allows us to be sure that nobody will change anything in its operation. Let's say that "blockchain" is our insurance that everything that is done and written will be set in stone and nothing and no one will be able to change it.
Well, at this point Lisk is something in between. For one thing, Lisk does not have smart contracts as we know them. Instead, its nodes are able to take the instructions that are given in JavaScript and translate this into actions within the mainchain or sidechain. Yes, it is the same thing that happens in a blockchain with smart contracts, but in Lisk that programming is not stored in the string. In other words, there is no blockchain address where we can see a "program or smart contracts" written and that is the last letter of the operation of a DApp.
Instead, programmers have the ability to use the Lisk SDK and write DApps associated with a sidechain. In that case, the user accesses the DApp and everything they do is recorded on said sidechain, they can verify everything from start to finish, and in the end that summary data is recorded on the Lisk mainchain. At this point, the assurance is provided that everything can be audited. But, the smart contract, its address and chain deployment is limited to access to the DApps, and we cannot read it as such.
Surely you will think: "What madness, this is not blockchain, it is a hoax". Lisk is intended to create free software DApps whose code can be freely viewed, audited, and reviewed. In fact, Lisk has featured several apps whose code is fully accessible on GitHub repositories, where anyone can look at the code and see if there's "something wrong with them."
Decentralization in any case is that the mainchain and sidechains are in the hands of the validators. They are the ones who ensure the safety of these elements. This prevents DApp developers, for example, from deciding to overwrite an entire history just because they want to. In short: the control of the data is ultimately in the hands of the community itself.
Admittedly, this is a very different model than what we see in Ethereum, EOS or other blockchains with advanced smart contracts, but Lisk has found a way to make it fast, adaptable and much more flexible than its counterparts.
Lisk, an ecosystem without limits of improvements
Do you remember that we had commented that:
If you can imagine it, you can create it using Lisk.
Well, that's not an exaggeration, and it's possible thanks to JavaScript and the powerful Lisk SDK. First of all, you can create things as simple as:
- Sovereign identity services.
- A decentralized storage system.
- Oracles.
- DEX platforms with cross-chain capability.
- Atomic Swaps with cross-chain capability.
When reading cross-chain, we are not mistaken, Lisk is capable of it. For example, it is possible to use Lisk to create a sidechain that has the ability to run an Ethereum Virtual Machine instance, and in this way interact with the Ethereum network from a Lisk DApp. The same can be done, for example, by creating sidechains compatible with Bitcoin, Litecoin or any other cryptocurrency you can imagine.
This is possible thanks to the potential of JavaScript and the open source development of DApps. In short, Lisk is a whole territory to explore and hence its enormous importance in the blockchain ecosystem.
The future of Lisk
Lisk is a project that does not stop evolving, its idea, controversial and unique as it is, offers us a unique opportunity to explore blockchain technology from another perspective, a more permissive and flexible one.
Today, the Lisk development team is working on version 3 of Lisk, a version that will come with important improvements at the SDK and Core level of operation especially focused on improving the speed of processes (JavaScript is not exactly a language valued for its great speed compared to other options), improvements in security (avoiding problems with the use of cryptographic and mathematical functions) and improvements in the network and its operation.
In any case, Lisk has achieved a good position in the world of cryptocurrencies, being a healthy project with potential still unknown to many.