What is Chain?
Chain provides blockchain infrastructure solutions for businesses that wish to create better financial services. It aims to tackle two core industry problems: legacy financial systems and public blockchain infrastructure. This is the reason why it has previously worked with Visa, Nasdaq, Citibank, and other leading brands.
Legacy financial systems involve complex ways of transferring information between multiple intermediaries and ledgers. The public blockchain infrastructure is run by decentralized nodes, which are costly and time-consuming to maintain. Chain addresses these issues through three outlets: Cloud, Sequence, and NFT-As-A-Service.
What Does Chain Offer?
1. Chain Cloud
Chain Cloud gives developers access to the public blockchain without operating a physical node, hence the name “cloud.” This makes it easier for teams to redistribute resources from node maintenance to shaping their product and delivery. Other advantages include easier scalability for enterprises, access to over 18 EVM-compatible blockchains, analytics for businesses, ledgers that don’t require code changes, and premium features for paying members.
Everyone can become a validator, stake, and earn rewards without any prior technical knowledge using the Cloud Dashboard. The protocol separates itself from the competition by providing a simple, comprehensive solution to helping Web3 enterprises spin up nodes with RPC endpoints, and monetizing that process with intelligent tokenomics that make the economics of blockchain infrastructure more compelling. This opens Chain to a wide market of potential users.
The product can integrate with clients’ applications by utilizing the Chain Cloud Standard/Premium RPC API. The Standard service gives access to an open network of globally distributed nodes (Protocol Nodes), while the Premium offers private and secure endpoints (Enterprise Nodes). Premium users also have access to an extended range of services such as real-time analytics, low latency, 20% discount when paying with the Chain token (XCN), 24/7 support, unlimited transactions, and many other benefits.
Users that provide access to Protocol Nodes can mine XCN rewards for supplying computer power to the Chain Standard RPC API. On the other hand, the Enterprise Nodes available for Premium do not connect to any external protocol or require staked XCN, but users can stake and delegate native tokens in their respective networks.
Enterprise clients can set up one node per network. As such, when customers spin up a node they would need to specify the L1 chain the node is going to connect to. As for staking rewards, Chain will not be taking any commission, but this is subject to change.
The initial selection of supported EVM chains includes Bitcoin, Ethereum, Solana, and the Binance Side Chain. As adoption grows, the protocol plans on adding more L1 chains to its list.
Chain believes they separate themselves from other competitors like Infura and GetNode through tokenomics and backend solutions. The protocol invests in building a robust, scalable and highly efficient backend infrastructure that is optimized around reducing load times for spinning up nodes and building a secure, private transport mechanism between nodes in their multi-tenant cloud infrastructure.
2. Chain Sequence
Chain Sequence empowers software teams to focus on scaling their product by providing ledger infrastructure that is hosted in the cloud for easier access and management.
Because Sequence combines the safety of cryptographic transaction signing with the cloud, it permits the creation of ledgers for security-rich projects such as cryptocurrency exchanges or lending platforms.
As legacy financial systems often involve resource and time-consuming operations, security risks, and reconciliation of duplicate ledgers, the Chain “ledger in a cloud” provides an efficient solution for businesses. Sequence relies on the use of cryptographic keys to keep data on balances safe.
Entities that use Sequence can form a “team” that includes the ledger, which acts as a discrete, append-only, cryptographically linked system of record. Based on their assigned roles, individuals on the team and systems can access the ledger. The access control is defined at the team level. Users can create people and systems which manage their access within roles. Currently, there are two areas of access: Team Dashboards – which are available to individuals via a web browser with email and password credentials, and Ledger API – which is provided to individuals and systems via an SDK with an API credential.
Chain Sequence is easy to set up and because blockchain technology is used this means an immutable history for all the transactions is created allowing for accurate and customizable reports. Transactions on Sequence are atomic ledger changes consisting of one or more actions. They can create, transfer, and/or retire different assets in the ledger.
Although the management of ledgers is provided as a service, all transactions must be signed by the relevant keys. These keys are kept in secure enclaves and are controlled by users, services, or organizations with authorization over certain assets, accounts, and functionality. They are inaccessible to Chain. Sequence’s “cloud + keys” concept combines tamper-proof security with an excellent developer and operator experience.
Chain Sequence has two plans: Standard and Premium. The Standard Plan allows development teams to begin creating their application in Sequence for free for up to 500,000 transactions per month. This gives developers access to standard customer support as well as the ability to establish an unlimited number of team members, accounts, and queries for their application’s ledger. The Premium Plan allows developers to easily grow their ledgers without limitations. This package is charged per project and includes everything in the Standard Plan as well as unlimited monthly transactions, a dedicated 24/7 support team, and Enterprise SLAs.
It’s noteworthy that there are no outside certifications or security surveys provided for Chain, besides the CertiK audits, which are only for the smart contracts the protocol built and do not cover Sequence. In order to improve its security, Chain runs a bounty program that aims to identify and remediate Sequence bugs. All CertiK audits are only for the smart contracts the protocol built and do not cover Sequence.
NFT-As-A-Service offers support from design to deployment. This is an ideal package for major retail, finance and entertainment brands that wish to enter the Web3 ecosystem by launching a well-researched digital and/or physical NFT. One such recent partnership between Chain and Tiffany & Co. resulted in the launch of NFTiff, an exclusive pendant drop for the CryptoPunk community.
Chain’s CEO, Deepak Thapliyal (@dt chain), has a lot of prominence on crypto Twitter and in the Web3 space as a whole. He is involved in NFT partnerships with the protocol that provide utility and value to the Twitter community.
The NFT creation process spans from A to Z and includes:
- Conceptualization (research that helps identify the market and the best strategy)
- Design (mood board creation, prototyping, and future direction)
- Production (asset making, building an NTF Gateway housed on a Chain managed blockchain that is compatible with other networks, UX/UI, and client support/training)
- Implementation (the launch of the product, minting, marketing campaign, data collection, and security)
- Support (payment management, continued maintenance, and access to a dedicated Chain NFT support team member)
NFT-As-A-Service is not limited to established industries, but up-and-coming brands and creators can also utilize this consulting offering.
The Chain Token (XCN)
The Chain Token (XCN), which launched in March 2022, was previously known as CHN. After the original tokens were burnt, a 30% supply decrease, worth $2 billion at that time, was achieved.
XCN sits at the basis of the Sequence platform. Utility revolves around discounts, invoice payments, governance voting, and access to premium services.
The total supply of $XCN is capped at 53,470,523,779. All tokens have already been minted and have been allocated as follows:
- Company 15,000,000,000 XCN – this allocation is set aside for Chain’s parent company and is intended to be used for corporate activities. These coins are secured under a Time Lock Smart Contract, with a monthly release of 100,000,000 XCN starting in April 2023.
- DAO 10,000,000,000 XCN – Chain governance stakers, who manage these coins through community-driven initiatives, control the allocation. The latest community constitution established a monthly budget of 100,000,000 XCN.
- Team 5,000,000,000 XCN – given to the project’s founders, team members, community managers, and developers. These coins are also secured under a Time Lock Smart Contract similarly to the company funds.
- Circulating 23,470,523,779 XCN – unlocked and freely circulating on the market.
Note that the visible discrepancies in supply totaling over 69 billion on Ethereum and Binance Smart Chain are due to a logic bug on Etherscan that doesn’t account for the amount sent to the burned address from the total supply API and the use of the Wormhole, a decentralized bridge, on BSC. The total supply on BSC is equivalent to the amount locked on the Wormhole smart contract. The correct total supply of XCN can be found on Chain’s website, CoinMarketCap, and CoinGecko. The burn address can be viewed here and the Wormhole here.
The Chain DAO was launched in April 2022 and with it came the ability for the community to vote. To participate in governance, holders must stake their tokens. One vote is awarded for each XCN token staked. The governance controls the staking rewards, the DAO treasury, the timelock contracts, fees, and other changes to the blockchain.
100,000,000 XCN are needed for making a proposal and 200,000,000 XCN to reach quorum. There is also a 2-day voting period and a 2-day wait period before on-chain changes are executed.
With the help of the decentralized XCN Bridge users are able to effortlessly transfer XCN from Ethereum to other compatible blockchains such as the BNB Chain. By utilizing the Wormhole Network, the Bridge can provide a trustless method to move XCN between different blockchains without forcing clients to give up control of their assets.
What Makes Chain Unique?
Some of the things Chain does that sets it apart include:
- The payment outlet for Sequence – The Sequence platform relies on the XCN token for payments, discounts, and providing users with access to premium features.
- Time and cost-effectiveness – Because of the low maintenance and automatic processes involved in cloud technology, teams can preserve their resources and spend them where it really matters.
- High levels of security – Ledgers are append-only data structures protected by cryptographic keys. This empowers multiple entities and organizations to transact and interact with the same ledger without compromising its security.
- Value for developer teams – The interface and GitHub documentation provided by Chain particularly stand out for Sequence, which was built with developers in mind. Furthermore, the platform is free for up to 500,000 transactions a month.
- Easy to set-up – All services provided are designed with the end-user in mind. Chain makes it easy to build, operate, and scale a variety of complex products on the blockchain such as tracking merchant payments or the management of validator nodes.
- Trusted by market leaders – At its inception, Chain has raised over $40 million in venture capital from prominent companies like Pantera Capital, Orange, Citibank, Nasdaq, Visa, Fiserv, Khosla Ventures, and Capital One. Adding to this, Chain has helped build blockchain networks for Citibank, Visa, Nasdaq, State Street, and other industry leaders.
- Charity – Chain Gives is a worldwide outreach branch that supports charitable organizations and individuals using the power of cryptocurrency and blockchain. As such, it has previously given $277,000 towards the Ukraine relief efforts, $350,000 to Reform – a group on a quest to overhaul the criminal justice system through legislation, and other donations totaling $805,250.
- Audited by CertiK – XCN has been audited by CertiK and given a Skynet Trust Score of 85/100. The system measures the health and performance of a project and is composed of a Security Score and a Market & Community Score. The Security Score looks into potential code-base and technical threats, while the Market & Community Score gauges the social standing and market health of a crypto project.
- Accurate & secure price feeds – By using the Chainlink Price Feeds integration on Ethereum Mainnet, the Chain protocol provides stakers with tamper-proof price feeds that are needed to calculate accurate USD values for the XCN rewards. The Chainlink oracle is known for its ability to secure many DeFi protocols against unforeseen events such as flash crashes, exchange downtime, and data manipulation attacks via flash loans. You can access the XCN/USD Price Feed here.
How the Chain Staking Mechanism Works
Individuals can stake XCN by depositing the token into the non-custodial staking smart contract deployed on the Ethereum blockchain. This helps secure the network by ensuring proper governance and risk controls are set to avoid malicious actors from attacking the protocol. Staked XCN can participate in Chain governance and earn rewards for safeguarding the protocol after each 28-day cycle (known as an Epoch). The rewards can be claimed exactly 7 days after the end of an Epoch.
According to the latest community constitution, the allocation available each month is 100,000,000 XCN (which comes from the DAO fund) while the reward program is in effect. The reward rate is determined by your weight in the staking contract as shown in the formula below:
Monthly Reward Pool / Your weight % of the total XCN staked
Staking can be done directly on the Chain website utilizing industry-standard wallets like MetaMask, Coinbase, TrustWallet, or through the WalletConnect bridge. Here you will find a step-by-step process on how to purchase Chain tokens using MetaMask and 1inch.
What Are the Benefits for the User?
- Rewards – clients can earn more XCN on their staked assets
- Governance – stakers can have their say in governance proposals and change the future of the protocol
- Long-term holding – this is suitable for investors that want to save their tokens for many years instead of trading. Earning rewards in the meantime can become very lucrative. Not only that, but some may prefer an automatic “set it and forget it” system, which staking is able to provide.
What are the Benefits for the Protocol?
Staking XCN is relevant to Chain because:
- Secures the DAO – Chain DAO needs a decentralized mechanism in order to function. XCN holders can secure the DAO by voting on protocol improvements and community-driven programs.
- Secures the network – The public blockchain network needs a multitude of nodes in order to prevent attacks and accurately verify transactions.1
Things Chain Can Improve
1. Bring clarity for staking – At the moment important details about staking are missing from the official website. However, here you can find a detailed breakdown. The annualized reward rate (APR) is 11.38%. At $1000 invested this could bring annual earnings of $113.8 ($9.38 monthly) or $120.53 ($9.4 monthly) when compounded. Currently, there are 207 unique delegation addresses in the network totalling a 14.53% staking ratio.
2. Open NFT-As-A-Service to the bigger market – As NFTs are becoming more popular, Chain could expand on this opportunity. At the moment this service can only be used on an approval basis, meaning clients have to fill in a form and wait for the team to reach back. Parts of this process could be automated to guide users from step one, therefore streamlining the system.
3. Increase its CertiK Security Score – This sits at 85/100, although good, more security findings raised by CertiK could be addressed by the team in order to improve the score.
4. Present a roadmap on the website – A roadmap would help bring clarity to upcoming projects and boost social trust.
Chain is a protocol with a focus towards enterprises. It aims to provide Web3 infrastructure with the help of cloud blockchain, revolutionary ledger technology, and NFT-As-A-Service. The DAO governance is secured by staked Chain tokens (XCN). Not only does staking give voting power to holders, but it also offers rewards. Additional XCN utility stems from its use on the Sequence platform which provides high-quality ledger infrastructure for developers.
Since many of its services have launched in 2022, the network still has a lot of changes to make and additional information to add to its website, such as the staking APY. Starting in April 2023, each month, the Time Lock Smart Contracts begin releasing 200,000,000 XCN for 50 months and a further 100,000,000 XCN for 100 months. This could slowly flood the market with 20,000,000,000 XCN, almost doubling the current circulating supply, and potentially keep the token price low for a long period of time.
However, I believe Chain has great long-term potential as it understands the needs of the Web3 market and is able to bridge them with easy-to-use services.
Chain official website: https://chain.com/
Chain Discord: https://discord.gg/ChainOfficial
Sequence One Pager: https://chain.com/sequence.pdf
Chain Whitepaper: https://assets.chain.com/whitepaper.pdf
I’ve also addressed Chain directly for information not publicly available and they graciously provided a PDF with answers. Many thanks to the Chain team for their support!