According to a recent report by Messari, South Korean Blockchain project Klaytn is a pretty good network in terms of decentralization and open nature of Blockchain. In fact, it is becoming more and more like a perfect network to meet these requirements. Altcoin Klaytn provides additional benefits for the largest businesses to run their applications and accelerate the adoption of distributed ledger technology.
What is Altcoin Klaytn?
Klaytn is not one but three separate networks working together. Developed by the South Korean internet conglomerate Kakao, it consists of the Core Cell Network and the Endpoint Node Network, which together form the mainnet, as well as the Chain of Service Network, which has multiple enterprise-level sidechains that can host standalone applications. The Core Cell Network consists of independent cells, including a consensus Node and at least two proxy nodes, operated by a permissioned group called the Klaytn Governance Council.
These consensus nodes perform consensus, create new blocks, verify and execute transactions. Meanwhile, proxy nodes serve to relay information to the Endpoint Node Network, which in turn is used to communicate with the Service Chain Network and all its independent sidechains. These Service Chains are an essential part of Klaytn’s design, enabling businesses to create their own custom and customizable Blockchains for specific dApps. With them, companies can customize their networks to meet the needs of their dApps, including a focus on data privacy or higher transactions per second or throughput.
Seamless network performance
The Messari report points out that Klaytn’s network architecture is quite brilliant. Makes it clear that TPS for enterprise dApps is just an afterthought. Equally vital to network performance is latency and precision. As noted in the report, this is where Messari’s Klaytn really shows up. Klaytn’s network will not only provide a TPS that outperforms Ethereum, but also delivers exceptionally low latency and instant precision. Klaytn’s unique network architecture does this by sacrificing a degree of decentralization with a limited number of Core Cell Network Nodes. Messari explains that this is something that is trying to please the vast majority of firms that are used to Web2-like transaction speeds.
According to the report, “Outside of its Tier architecture, Klaytn gives businesses the option to deploy their own Service Chain.” It also allows Klaytn to easily create custom Blockchain solutions connected to the mainnet. One of the points of Klaytn’s high TPS is the consensus mechanism based on Proof-of-Stake and using an optimized Istanbul Byzantine Fault Tolerance model. Klaytn’s IBFT is designed to provide greater scalability by randomly selecting a fixed number of nodes to achieve consensus for each block. However, a single Cell Network is randomly selected to propose each new block. 30 blocks are selected as validators to form a committee for the round. Consensus is reached when two-thirds of this committee agrees on the proposed block.
Messari explains that this is a unique model that allows Klaytn to add new nodes without increasing the communication volume. However, he notes that since the nodes communicate with each other to reach consensus, the possibility of collisions exists. Also, the time of certainty provided by the model makes it ideal for enterprise blockchains where its nodes are run by trusted validators.
DeFi ecosystems are growing
Although Klaytn is more centralized compared to some other networks, the model hasn’t stopped it from seeing dramatic growth over the past few years. During the report, Messari said that Klaytn’s DeFi protocols are worth a total of $317 million in unlocks, ranking 14th in the entire blockchain industry. Like most chains, it has seen TVL drop significantly since April when the broader DeFi market collapsed with the sudden and shocking collapse of the Terra blockchain ecosystem.
Despite this, Klaytn’s TVL is still up about 73 percent compared to a year ago, meaning it’s holding firm in one of the most severe crypto winters the market has ever seen. One of the main reasons for Klaytn’s strong DeFi ecosystem is the Klap (Klaytn Lending Application) protocol launched in June. Klap had amassed millions of dollars on TVL within days of its launch and quickly became the number one oversecured loan protocol on Klaytn with an impressive $18 million TVL.
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