1protocol, or One Protocol Inc., is a blockchain project that aims to build markets for digital services on the Ethereum blockchain. Find out how it works today in our review.
What Is 1Protocol?
1protocol, found online at 1protocol.com, is a platform that enables users with idle tokens and machines with idle computing power to collaboratively perform work for staking protocols on Ethereum like Casper. The project was announced in May 2017.
Using 1protocol, users can trustlessly earn interest on their token holdings and machines can perform work for staking protocols without actually putting up stake.
Today, participating in staking protocols on Ethereum requires capital in addition to computing power. 1protocol serves as a platform for Ethereum users with idle capital and workers with excess computing power. These parties can jointly perform work for staking protocols, thereby solving one of the biggest problems in the Ethereum staking community. If a worker has lots of computing power but a shortage of capital, for example, they can use 1protocol to access that capital from a willing counterparty.
What Are Ethereum Staking Protocols?
1protocol won’t make much sense if you don’t understand how Ethereum’s staking protocols work. Instead of relying on central servers, Ethereum protocols can provide digital services by employing decentralized networks of machines (like for file storage, computation, and block production). These protocols ensure correctness using economic incentives. They compensate machines for accurately performing tasks, then financially penalize them for violating protocol rules.
To enforce financial penalties, these protocols often require worker machines to submit security deposits or stakes. That’s why workers that lack capital for deposits cannot fully utilize their computing power. That’s why it’s called a staking protocol.
How Does 1Protocol Work?
1protocol allows users with idle capital (i.e. coins you wish to invest) and workers with excess computing power to jointly perform work for protocols requiring capital. Using 1protocol, Ethereum users can pool their capital into smart contracts. These smart contracts in turn incentivize workers to leverage the pooled capital to perform work for staking protocols on Ethereum. 1protocol calls these people “virtual workers”.
1protocol enables an on-chain procedure when constructing virtual workers. Again, virtual workers are the combination of someone with spare capital and another person with spare computing power. One Ethereum account (called the “capitalist” by 1protocol) supplies the capital, while the other (called the “operator”) supplies the computing power.
The capitalist submits a virtual worker proposal to 1protocol, then an operator accepts the proposal. Once the virtual worker is deployed, the virtual worker exposes its capital (“seed”) to the operator. In turn, the operator can leverage the exposed capital to perform work for Ethereum taking protocols.
To incentivize operators to perform work, virtual worker contracts can call several functions exposed by 1protocol, including:
Fire: Confiscates the operators’ security deposit and recycles the virtual worker back to the first step.
Punish: Transfers a pre-selected amount of funds from the operator’s security deposit to the capitalist’s account.
Reward: Transfers a pre-selected amount of funds from the capitalist to the operator.
The entire 1protocol ecosystem is accessed through 1client, an extensible collection of client-side software.
How Does 1Client Work?
1client is the way in which you access the 1protocol ecosystem. 1client consists of a suite of customer-facing tools, consistent with existing Ethereum client implementations. There’s a command line interface (REPL) atop the RPC interface. There’s also a Python library where developers can write scripts to directly control 1 client. 1client ultimately serves as a reference implementation, and users remain free to develop custom software for interacting with the 1protocol ecosystem.
Some of the core features of 1client include:
1client enables users to browse and accept pending virtual worker proposals. Alternatively, they can use whitelists to instruct 1client to automatically accept proposals. Users can also further instruct 1client to immediately execute operator software after accepting a proposal.
1client supplies the tools that enable operators to analyze pending proposals. 1client provides whitelists and profit projections.
Virtual worker proposals can contain hash linked resources, or HLRs. These are content addresses that point to recommended operator software. Using 1client, operators can effortlessly retrieve and begin executing such software.
Work Pools And Funds:
1client allows users to construct, browse, join, and monitor work pools and funds. A work pool is a smart contract that enables an arbitrary number of operators to jointly operate a virtual worker, while a fund is a smart contract that enables an arbitrary number of capitalists to jointly finance a virtual worker.
How Do Credit Tokens (CRED) Work?
Credit Tokens, or CRED, are ERC20 tokens used by operators and capitalists in the 1protocol ecosystem. The token occupies several roles in the ecosystem, including:
- Operator staking
- Compensating operators
- Funding development of 1protocol
- Usage in future virtual worker-compatible protocols
Full details about the Credit Token have not yet been released. The team plans to release a complete whitepaper discussing Credit Tokens in the future, including a date for a crowdsale.
Who’s Behind 1Protocol?
1protocol is led by Axel Ericsson and Zack Lawrence. Ericsson is a computer science graduate from Stanford while Zack is a math graduate from Stanford. Both are listed as founders of the project.
Ericsson announced the project online with a blog post on May 22, 2017.
1protocol is a unique solution to Casper staking and other Ethereum staking use cases. It’s designed to connect workers with excess computing power with workers who have excess capital. A worker might have a lot of computing power, but a shortage of capital, for example. 1protocol allows this worker to borrow capital to perform work for protocols requiring deposits (Casper is one example, as are Truebit and Snow).
You can learn more about 1protocol online today at 1protocol.com. The project was announced in May 2017, and a token sale for CRED tokens may occur in early 2018 (details have not yet been released).