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 first Paratoken designed for fees, rewards, and liquidity.
Transaction fees are priced and distributed based on the transaction type. Transfers, bridges, marketplace transactions, 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 marketplace fee (approximately 2.5%) that is distributed to EFI pools on the network. Developers can also charge additional fees to profit from trading activity.
Every asset on Efinity can be purchased with any cryptocurrency by using EFI as the intermediary currency. For example, an imported coin such as ETH can be used to purchase a non-fungible token, since both ETH and the NFT have a common price in EFI.
All coins used for transactions on Efinity can be swapped to EFI using the Efinity Swap AMM.
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.
Each Efinity Token (EFI) also controls a share of the DOT Treasury on Efinity, with the ability to vote on parachain auction decisions. EFI holders may receive DOT dividends when future parachain auctions decrease in cost.
15% of the total supply of EFI is reserved and will be slowly distributed to the collators and pools 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 widely distributed and liquid with over 90,000 wallets, and it will be used for infusion and staking 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.
Staking ENJ allows users to nominate the active collator nodes and receive a share of EFI tokens. This model ensures that the most reliable and competitive collators are selected by the community.
Infused ENJ contained inside minted NFTs will be automatically staked and will passively generate EFI.
Discrete Accounts (for example, shared company accounts) may also passively generate EFI tokens by staking.
Staked ENJ is still eligible for use in marketplace and other applications, as this ENJ still exists on the owner’s account. 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 any token to grow with every new unit minted.
A discrete account can be given permission to mint and distribute tokens, allowing for infinitely flexible minting schemes. A simple ICO or “mining” could even be implemented without requiring any code.
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 an equal share of the Collator Pool. Node operators may reserve a percentage of fees as income. The collator’s share is visible to all stakers and may influence which collator they will choose to stake towards.
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 earn a disproportionately high fee per block for providing the on-demand service.
Collator Pool: Distributed to ENJ stakers and active Collator Nodes. Each active collator is distributed an equal share of EFI every block.
Efinity Treasury Pool: The Treasury Pool allows the Efinity community to distribute EFI to projects that benefit the ecosystem.
Price Discovery Pool: The price discovery process is designed to create unprecedented liquidity for NFTs. Top bids for each Paratoken will receive regular EFI from the Price Discovery Pool until their order is filled or beaten by a higher bid.
Fuel Tank Pool: The Fuel Tank pool provides a replenishing source of EFI that may only be used for paying transaction fees.