Polkadot is a blockchain framework that enables a completely decentralized internet of parachains where users are in control of their identity and data
The Polkadot network is designed to operate two types of blockchains:
- Relay Chain: The core of Polkadot, responsible for the network’s shared security, consensus and cross-chain interoperability.
- Parachains: Sovereign blockchains that use the relay chain’s computing resources to confirm that transactions are secure and accurate.
Enjin is working in collaboration with the web3 foundation and building Efinity on Polkadot. The Efinity blockchain is a parachain that uses Polkadot Relay Chain validators for its consensus, which allows Efinity to have an independent economic framework, data, and state.
Efinity’s collator nodes are responsible for transactions on the Efinity parachain, and the network pays out EFI to participants. Security, however, is handled by Polkadot’s Relay Chain validators, which means that end-users of Efinity are not burdened with paying for validation.
Enjin’s Ethereum-based platform will continue to be developed, and cross-chain bridges will connect both networks for full compatibility with the entire Ethereum ecosystem.
Enjin is developing a token standard called Paratokens for Polkadot. The standard will be compatible with parachains, parathreads and smart contracts, so it’s interoperable with the entire Polkadot and Kusama ecosystem.
Fungible tokens are stackable, have a quantity and optional decimal places. An example of a fungible token is a twenty dollar bill - each bill is worth the same amount as another twenty dollar bill.
Non-fungible tokens are not interchangeable; each token has its own unique identifier. Examples of NFTs are original art, gaming characters and pets, numbered collectibles, and more.
Grouped NFTs are non-fungible tokens that are a part of a family, and share the same Base ID.
For example, an armory full of swords are all recognizable as an Iron Sword, but each sword may have its own quality level, brand, and an individual history.
One person may value a specific sword because it was once owned by a great warrior. For another person, the “kind” of token may be more relevant to them, if its utility is equivalent.
Efinity will process up to 700-1,000 transactions per second based on current benchmarks; in comparison, the Ethereum network currently runs at around 15 TPS). Optimizations to the Efinity and Polkadot runtime code may lead to future increases in TPS.
Transactions are confirmed in 6 seconds, which permits fast response times needed for mainstream applications.
Open Development Platform
Efinity allows developers to write and deploy contracts using Ink!, a universal smart contract framework that is compatible across all Polkadot-based chains. Contracts can be written in Rust, a popular programming language.
Paratokens on Efinity may move between parachains on Polkadot and Kusama using Direct XCMP (Cross-Chain Message Passing). This opens possibilities for development and extension by the entire Polkadot ecosystem.
Developers can also write code to extend a paratoken’s functionality. Tokens can be hooked to a smart contract for transfers, mints or other transactions.
Efinity Token (EFI)
Efinity Token (EFI) will be the main utility Paratoken deployed on the network.
Transaction fees are priced and distributed based on the transaction type. Transfers, bridges, Bid Orders and Ask Orders (as described in the Marketplace section below), and smart contracts will all be priced according to their processing requirements and benefits to the network.
Orders and trades on-chain are charged a transaction fee (approximately 2.5%) that is distributed to EFI pools on the network. Developers can also charge additional fees to profit from transactions conducted by third party apps and smart contracts using Efinity.
Every asset on Efinity can be exchanged for any other NFT or other digital token that is bridged onto the network. For example, an imported coin such as ETH can be exchanged for a non-fungible token, since both are interoperable Paratokens. This functionality facilitates development of third party apps using Efinity to transfer NFTs to other blockchains, from blockchain-based games on other networks to NFT marketplaces and exchange platforms.
All tokens on Efinity can be traded for others using decentralized mechanisms on-chain.
Every EFI holder will be able to submit and vote on governance proposals directly in their wallet, and help steer the future of the Efinity network.
15% of the total supply of EFI is reserved to automatically compensate collators and pools for their valuable work on the network, particularly maintenance of the network, processing of transactions and development of new modules and projects to expand the network. This portion will gradually unlock over a number of years until the full token supply is reached.
Enjin Coin (ENJ)
Enjin Coin (ENJ) is the original utility token for minting and infusion that was released to the Ethereum community in 2017. ENJ is currently held by over 100,000 wallets, and ENJ (including NFTs containing ENJ) will be used for infusion and nomination of collators on Efinity.
By being an integral part of the Efinity network, ENJ is receiving significant additional utility and importance. Enjin Coin can be moved between Ethereum and Efinity using our cross-chain bridge.
The nomination of Efinity collator nodes will be provided by users who vote on and select the best performing collator nodes. The collators with the most votes will be allowed to process network transactions and be compensated with EFI from the collator pool. Nominators will be required to stake or deposit ENJ (which may include ENJ infused in ENJ-minted NFTs). ENJ holders represent a diversified, distributed community who are existing stakeholders in the development of NFTs, a community that is not dominated by any large holder of ENJ. A nominator will, in turn, be compensated for their oversight and nominators will receive a portion of the EFI compensation received by the active collator node voted for by the nominator.. This model ensures that the most reliable and competitive collators are selected by the community.
Infused ENJ contained inside minted NFTs, and Discrete Accounts that hold such assets may also be used for the nomination of collators.
ENJ staked by a user for nomination is still eligible for use in marketplace and other applications, as this ENJ still exists on the address created by that user on Efinity. ENJ is automatically unstaked if it’s transferred or melted.
Enjin was the world’s first platform to offer token infusion at a fixed bonding cost per token.
Infusion on Efinity will include an additional update: Bonding curves allow minting costs to increase with every new unit minted.
A discrete account can be given permission to mint and distribute tokens, allowing for infinitely flexible minting without code required.
By applying a bonding curve, the general public could even be allowed to mint, paying an increasing base cost for each token. Supply would be kept in check depending on current minting cost and the demand for the token.
The Efinity Network will require 10 active collator nodes and optional backup nodes that maintain a full copy of the chain data and state.
Each collator node receives equal compensation from the Collator Pool. Node operators may reserve a percentage of fees as income. The collator’s income is visible to all stakers and may influence which collator they will choose to stake towards.
Proposed collators will be required to stake ENJ to create a node, and will not receive EFI or any compensation from the network arising from this staked ENJ (although a collator node that becomes active will receive EFI from the Collator Pool as compensation for network maintenance services).
Collators will not collect fees when they are not providing service. This provides an incentive for users to switch their stake to a more reliable collator if their existing collator remains offline. Certain organizations may choose to run a full Efinity collator node for local access to chain data. These nodes can elect to be “backup” collators by staking some ENJ to their own accounts.
If an active collator slot opens due to an existing node going offline, the backup collator with the next-highest staked ENJ will automatically start collating and will begin to be compensated every block for providing the on-demand service.
Collator Pool: Distributed to active Collator Nodes and to users that nominate these collator nodes. Each active collator receives an equal share of EFI every block.
Community Pool: The Community Pool allows the Efinity community to grant EFI to projects that benefit the ecosystem and facilitate initial development by subsidizing the project's transactions on Efinity.
Price Discovery Pool: The price discovery process encourages users to place Bid Orders (as described in the Marketplace section below). Top bids for each Paratoken will receive EFI from the Price Discovery Pool as compensation until their order is filled or beaten by a higher bid. This functionality facilitates development of third party apps using Efinity to transfer NFTs to other blockchains, from blockchain-based games on other networks to NFT marketplaces and exchange platforms.
Fuel Tank Pool: The Fuel Tank pool provides a replenishing source of EFI that may only be used for paying transaction fees.