Welcome to MELD
MELD is founded in a Proof-of-Stake, high-speed EVM blockchain designed with unique characteristics for DeFi dApps.
What is MELD built for?
MELD Benefits
Blockchain Introduction
The MELD blockchain is an innovative solution to bring programmability and interoperability to the MELD ecosystem. MELD relies on a system of 30 validators (see Validator Rollout Schedule) with a Proof of Stake (PoS) consensus that can support short block time and low fees. The most trusted validator candidates who stake will become validators and produce blocks.
The double-sign detection, malicious vote detection and other slashing logic guarantee security, stability, and chain finality. Other than the 14 active validators, MELD will introduce more validators, as adoption of the blockchain increases along with traffic.
In an extreme case, if a majority of the active 30 validators get attacked and move offline, Candidate Validators can report to the BNB Beacon Chain about the stale blocking, resume it and eventually propose a re-election of the active validator set.
The MELD blockchain also supports EVM-compatible smart contracts and protocols. Cross-chain transfer and other communication are possible due to native support of interoperability. MELD is:
A self-sovereign blockchain: Provides security and safety with elected validators.
EVM-compatible: Supports all the existing Ethereum tooling along with faster finality and cheaper transaction fees.
Fast Finality: Finalizes the chain within two blocks in most cases.
Interoperable: Comes with efficient native dual chain communication; Optimized for scaling high-performance dApps that require a fast and smooth user experience.
Distributed with on-chain governance: Proof of Stake (PoS) brings in decentralization and community participants. As the native token, MELD will serve as both the gas of smart contract execution and tokens for staking.
Proof of Stake
Although Proof-of-Work (PoW) has been recognized as a practical mechanism for implementing a decentralized network, it is not friendly to the environment and also requires a large number of participants to maintain security.
Ethereum and some other blockchain networks, such as Polygon, Avalanche and Near, do use Proof-of-Stake (PoS) or its variants in different scenarios, on both testnet and mainnet. PoS provides some defense to 51% attacks, with improved efficiency and Byzantine fault tolerance. It serves as an easy choice to pick as the fundamentals.
Meanwhile, the PoS protocol is most criticized for being not as decentralized as PoW, as the validators, i.e. the nodes that take turns to produce blocks, have all the authority and are prone to corruption and security attacks. Other blockchains, such as EOS and Lisk, introduce different types of Delegated Proof of Stake (DPoS) to allow the token holders to vote and elect the validator set. This increases the decentralization and favors community governance.
MELD utilizes the Avalanche subnet architecture for consensus and block finality, so that:
Blocks are produced by a limited set of validators.
Validators take turns to produce blocks in a PoS manner, similar to Ethereum's consensus design
Validators in the active set are elected in and out based on a staking-based governance
Fast finalization can greatly improve user experience. The fast finality is a core value proposition for the MELD blockchain.
The consensus protocol of MELD is derived from Avalanche and the Snowflake consensus mechanism fulfilling the following goals:
Short Block time, sub 1 seconds on mainnet.
It requires a short time to confirm the finality of transactions, around 1s for mainnet.
There is no inflation of the native token: gMELD (gas MELD), as the block reward will be collected from revenue generated by the MELD protocol when it launches and it will be paid in gMELD. Until then a 6% flat block reward is paid to all validators currently running on the MELD Mainnet.
It is 100% compatible with EVM system.
It allows modern proof-of-stake blockchain network governance.
Security
Given there are more than ½*N+1 validators who are honest, PoS-based networks usually work securely and properly. However, there are still cases where a certain amount validators may still manage to attack the network, e.g. through a Clone Attack. MELD/Avalanche does introduce Slashing logic to penalize validators for double signing or unavailability. This Slashing logic will expose the malicious validators in a very short time and make the "Clone Attack" very hard or extremely non-beneficial to execute.
Fast Finality
Finality is critical for blockchain security as, once the block is finalized, it can't be reverted anymore. The fast finality feature is very useful, the users can make sure they get accurate information from the latest finalized block, and then they can decide what to do next instantly.
Reward
All the MELD validators in the current validator set will be rewarded with transaction fees in gMELD. As MELD is not an inflationary token, there will be no mining rewards as per those the Bitcoin and Ethereum networks generate. In turn, the gas fee is present only to act as an abuse-deterrent as it generates very little revenue. All block rewards will be paid out equally based on the total amount of MELD staked per validator at a 6% APY, paid monthly. After the planned upgrade in May 2024, all of the block rewards will come from protocol revenues. As MELD is also a utility token with other use cases, delegators and validators will still enjoy the additional benefits of holding MELD.
The reward for validators is 15% of the revenue collected from the MELD protocol. Validators can decide how much to give back to the delegators who stake their MELD to them, to attract more staking. Every validator will take turns to produce the blocks in the same probability (if they stick to 100% liveness), thus, in the long run, all the stable validators may get a similar size of the reward.
Meanwhile, the stakes on each validator may be different, so this brings a counter-intuitive situation that more users trust and delegate to one validator, and they potentially get less reward. So rational delegators will tend to delegate to the one with fewer stakes as long as the validator is still trustful (an insecure validator may bring slashable risk). In the end, the stakes on all the validators will have less variation. This will actually prevent the stake concentration and "winner wins forever" problem seen on some other networks.
Token Economy
MELD has the same token universe for MELD and gMELD tokens. This defines:
The MELD token can circulate on all networks, and flow between them bi-directionally via a cross-chain communication mechanism.
gMELD only functions on the MELD blockchain fulfilling the role of gas token.
The total circulation of the MELD token should be managed across the all networks, i.e. the total supply of MELD and gMELD tokens should be the sum of the token’s total fixed supply (4,000,000,000) on all networks.
The tokens can be initially created on MELD in a similar format as ERC20 token standard which is called MLD-20 on MELD, then bridged on the other.
Cross-Chain Transfer and Communication
Cross-chain communication is the key foundation to allow the community to take advantage of a multi-chain world:
users are free to create any tokenization, financial products, and digital assets on MELD as they wish.
the items on MELD can be manually and programmatically traded and circulated in a stable, high throughput, lighting fast and friendly environment.
users can operate these in one UI and tooling ecosystem.
Bridging is tightly integrated into the MELD ecosysyem allowing token transfers on many EVM blockchains such as Ethereum, Avalanche as well as on Cardano.
Staking and Governance
Proof of Stake brings in decentralization and community involvement. Its core logic is summarized below. You may see similar ideas from other networks, especially Cardano and Avalanche.
Token holders, including the validators, can put their tokens into the validator nodes staking pool at any time which is called delegation. Token holders can delegate their tokens onto any validator node with available capacity and redelegate at any time. Token holders can also lock up their delegated tokens for specified periods and earn higher yields. When a token holder delegates for some time they receive an NFT representing that position. The delegated tokens can be transferred between validator pools but not withdrawn until the maturity date. Additionally, the NFTs that represent the delegated token can be traded in the secondary market.
Validators can share (part of) their block reward with their delegators. Validators can suffer from "Slashing", a punishment for their bad behaviors, such as double sign and/or instability. For basic delegation to a validator node, there is no lock period if a token holder wants to undelegate.
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