Zilliqa

What is Zilliqa (ZIL)?

Zilliqa is a public, permissionless blockchain platform that aims to be a portal into blockchain and for the ease and simplification of decentralized application (dApp) creation.

Zilliqa positions itself as a low-cost, highly scalable network designed with sustainability in mind. It gives developers a safe-by-design, novel smart contract language that simplifies the development process.

The Scilla programming language, short for smart contract intermediate level language, is easy for developers to pick up. It’s also a peer-reviewed smart contract programming language.

It has a strong type system, which makes it easier to write bug-free code. It has a static analysis framework and an automated scanner that allow developers to identify generic vulnerabilities easily.

Zilliqa positions itself as the world’s first sharding-based blockchain and plays host to a vibrant ecosystem of dApps. This way, it takes advantage of its ease of use and high performance.

When Was Zilliqa Launched?

Zilliqa was conceived in 2016, but the first version of its whitepaper was published in August 2017.

In this publication, the Zilliqa team outlined their ambition of building a blockchain platform designed to scale its transaction rates. Their eventual goal was to process a thousand times the transaction rates of Ethereum at its then network size of 30,000 miners.

Zilliqa was focused on a technique called sharing to attain this sort of scale. At the same time, it also proposed a novel, special-purpose smart contract language for greater efficiency.

ZIL, the native cryptocurrency of the Zilliqa network, was then issued as an ERC-20 token on Ethereum in a token generation event that ended in early 2018. After the Zilliqa mainnet went live in 2019, ZIL was swapped from Ethereum to Zilliqa in a token swap that ended in February 2020.

Zilliqa generated 60% of its token supply, or 12.6 billion ZIL, at the token generation event. 10% went to Anquan Capital, 12% was reserved for Zilliqa Research, and 5% went to the team. All of these tokens were distributed quarterly within three years.

Who are the Founders of Zilliqa?

Zilliqa was created by Prateek Saxena, an assistant professor at the National University of Singapore’s School of Computing. Along with several students at the faculty, Saxena published a paper outlining how a blockchain could optimize efficiency and speed if focused on sharding.

Saxena then joined forces with Juzar Motiwala, the former Singapore Computer Society president, and Max Kantelia, a finance and tech entrepreneur, to found Anquan Capital.

Anquan Capital incorporated Zilliqa Research in 2017 to develop the network. They hired previous NUS School of Computing research fellows Dong Xinshu, Yaoqi Jia, and Amrit Kumar as CEO, CTO, and Chief Scientific Officer, respectively.

How Does Zilliqa Work?

The commonly accepted blockchain trilemma of speed, security, and decentralization is a code that many projects try to crack in different ways.

Networks that are noted for high security and decentralization, such as Bitcoin, often have to compromise on speed. Centralized blockchains can easily offer speed and security, and blockchains that are both fast and decentralized have often been exploited.

Zilliqa tackles the issue of speed using a technique called sharding. It is a process where the network is divided into smaller “shards,” and each shard processes transactions individually in parallel.

As a result, when the network grows bigger, the number of operational shards also grows. Therefore, the network is able to process even more transactions at the same time.

What Makes Zilliqa Unique?

Aside from its use of sharding, Zilliqa stands out for its focus on concepts like the creator economy, Web3, and metaverse.

The creator economy is a term that refers to individuals being able to monetize their creations or content by engaging with their community on social media platforms. While this is nothing new, blockchain technology, NFTs, and dApps can revolutionize digital ownership.

By providing true ownership of digital assets, it is possible to eliminate the intermediary from the creator economy. Thus, both creators and consumers are empowered rather than letting corporate platforms dictate all the terms and take the lion’s share of the revenue.

The creator economy focuses on digital rights management. It proves unique ownership and intellectual property while monetizing content creators and also providing features such as digital content royalties.

Zilliqa already has several platforms that empower creators and their fans. These include the XCAD Network, which tokenizes creators and has the backing of the likes of Mr. Beast, a content creator with over 66 million subscribers.

Zilliqa also runs the Creator Fund, an initiative investing over $10 million to support innovation in metaverse and NFTs. The Creator Fund brings together art collectors, curators, and enthusiasts. It’s home to an artist DAO that invests in artists and curators featured in the Zilliqa marketplace.

How is the Zilliqa Network Secured?

The Zilliqa network uses a practical Byzantine Fault Tolerant (pBFT) consensus mechanism. In pBFT, at least two-thirds of all nodes must agree on a transaction to add it to the blockchain.

In other words, pBFT ensures that a blockchain is resilient even if up to 33% of its nodes aren’t behaving according to the protocol.

Since Zilliqa is sharded, each blockchain shard relies on a group of nodes to confirm its transactions. Then, once each shard has reached consensus, the second group of nodes confirms the shards’ collective block and adds it to the blockchain.

In addition to this sharded pBFT architecture, Zilliqa uses a proof-of-work (PoW) algorithm to assign node identities and generate shards. PoW is a common form of blockchain consensus used in blockchains like Bitcoin. It relies on nodes devoting their computing power to the network.

What is the Use of ZIL?

ZIL is the native token of the Zilliqa blockchain, powering its ecosystem of decentralized applications. These dApps range from financial services to non-fungible token (NFT) marketplaces and metaverse projects.

Every dApp and platform on the Zilliqa blockchain can be engaged using ZIL. It’s also a medium for the exchange of products, services, and NFTs on the network.

Each interaction with a dApp, platform, or product on the Zilliqa blockchain is subject to a small fee (normally 0.1 ZIL) paid in ZIL. These fees are reserved for future mining rewards, helping create a deflationary economic model for the ZIL token.

ZIL is also required for the minting of NFTs on Zilliqa. Minting is a simple process that requires you to download ZilPay, get some ZIL tokens, and create a Zilliqa marketplace account to start minting.

Zilliqa NFTs currently use the ZRC-6 standard. It includes support for royalty payments, batch minting, remote state read, and other features that deliver the best possible experience for creators and builders.

As a platform for many decentralized applications, including decentralized finance (DeFi) dApps, the ZIL token can also be staked and used in yield farming.

Who Controls Zilliqa?

Zilliqa is controlled by Zilliqa Research, currently led by CEO Dr. Ben Livshits. Livshits, formerly of Brave and Microsoft Research, is a Stanford Ph.D. in Computer Science.

Zilliqa co-founder, Dr. Amrit Kumar, still works as a Chief Scientific Officer and now also as the president of Zilliqa Research. Kumar also has a Ph.D. in Computer Science and was formerly a researcher at the National University of Singapore.

The leadership team also includes Sandra Helou (Head of Metaverse and NFTs), Matt Dyer (Head of Growth), Aparna Narayanan (Head of Communication), and Dr. Ilya Sergey (Lead Language Designer).

The Zilliqa network does have a measure of decentralized on-chain governance, though. Zilliqa Improvement Proposals can be made and discussed on Zilliqa’s forums. Proposals that make it through to the formal voting phase are voted on by gZIL token holders.

You can purchase these gZIL governance tokens on exchanges like Liquid.com and CEX.io or the Zilliqa decentralized exchange on ZilSwap.io.

The gZIL token was launched on October 14, 2020, with a circulating and maximum supply of 559,969 gZIL.

How Much Is ZIL In Circulation?

Zilliqa has a fixed maximum supply of 21 billion ZIL, 27% of which went to Anquan Capital, Zilliqa Research, and the team itself. 33% was sold upon the ZIL token generation.

The remaining 40% was scheduled to be issued via mining, with a decreasing block reward providing for ten years of mining in total. This stands in significant contrast to many other supply-capped cryptocurrencies, which have mining schedules reaching the year 2300 and beyond.

As per the Zilliqa whitepaper, 80% of ZIL was designed to be mined within the first four years. Currently, Zilliqa has over 16.5 billion ZIL in circulation.

How Do You Buy ZIL?

You can purchase Ziliqa on numerous top centralized exchange platforms worldwide since it’s often paired with top cryptocurrencies like Bitcoin. Stablecoin pairs such as USDT are also common, and ZIL is amply traded for fiat currency on many exchanges.

You can also purchase ZIL on Zilliqa-based decentralized exchanges (DEX), and it is the base currency on the platform’s native DEX ZilSwap, too.

Is It Possible to Buy Zilliqa Instantly?

Zilliqa is a high-performance blockchain, and DEX or p2p purchases will settle very quickly, if not almost instantly. Buying ZIL on an exchange is just as fast, but actually withdrawing it into your own wallet may take a while. This happens because exchanges don’t always authorize withdrawals immediately.

How Do You Store ZIL?

You can store ZIL on a centralized exchange platform, but a disclaimer on Zilliqa’s website reads: “in that respect, we suggest you move your ZIL to a secure wallet instead of leaving your ZIL on an exchange.” It’s also possible to store it in a wide selection of wallets, including Ledger, TrustWallet, Guarda Wallet, and Exodus. A full list of supported wallets can be found on Zilliqa’s wallets page.

Zilliqa Energy Consumption

Zilliqa uses proof-of-work consensus, but not in the same way pure PoW cryptocurrencies like Bitcoin do. Rather, Zilliqa does this to organize shards at the beginning of an epoch.

Therefore, while proof-of-work is inherent to Zilliqa’s inner workings, the network does not require entire farms of computers constantly hashing out PoW puzzles. This happens at the top of an epoch to figure out which node goes where. After that, validating nodes do the processing of transactions with minimal work.

According to analysts, Ethereum had a hashrate demand of 135 times that of Zilliqa prior to September 2022, when it was PoW.

It is difficult to target the Zilliqa network with any accusations of high energy consumption or a deep carbon footprint. This is because PoW is used only for the organization of nodes, with consensus managed by pBFT.

Is ZIL a Good Investment?

As far as performance is concerned, Zilliqa is a tried and tested blockchain platform. It can provide users with fast transactions at a very low cost in terms of fees thanks to its use of sharding.

In 2018, the Zilliqa team—including the Anquan Capital founders—released a position paper. It declared that Zilliqa “aimed to rival traditional centralized payment methods such as Visa and MasterCard.”

In 2022, however, the direction seems to have shifted. The network positions itself as an easy platform for dApps, embracing the creator economy and the metaverse.

If Zilliqa can dominate these market segments, aided by partnerships like Metapolis, the ZIL token could see significantly enhanced demand. Its main utility lies in paying for transactions and smart contract execution, so a growing ecosystem is key for the token’s prosperity.