Report from 36kr : A revolution of the communication industry with blockchain technology.
Distributed cloud communication startup “TOP Network” closed a $6 million Series A round in September. Investors included Fenbushi Capital, Danhua Capital (DHVC), NEO Global Capital and LD Capital.
TOP Network aims to revolutionize the communication industry with blockchain technology. Before the project, the team has developed a distributed communication network and three apps based on it: VoIP app Dingtone, CoverMe, a messaging app that adopts end-to-end encryption and self-destructing messaging techniques, and SkyVPN. Those three products have a total of 50 million registered users.
Traditional communication solutions require developers to either build communication infrastructure themselves or purchase it from professional service providers. For example, Bullet Messenger, a Chinese instant messaging app that has become popular in a few weeks recently, relies on the instant messaging service and Platform as a Service (PaaS) service for video and audio offered by NetEase.
The distributed communication network developed by TOP is similar to PaaS. However, it adopts peer-to-peer communication and storage technologies to break the traditional client/center server mode. TOP network allows each client with spare bandwidth/hard disk to serve other nodes and use services provided by other nodes at low prices or even for free, reducing the cost and improving efficiency significantly.
Such a network needs sufficient nodes in order to run efficiently. TOP wants to make it a decentralized, automated system so that other developers can contribute to and utilize the network. A public ledger then comes into play.
The number of settlements for TOP’s communication business is several hundred times higher than that of the general financial settlement, said Steve Wei, CEO at TOP Network. Since the existing public blockchain platforms cannot support such large-scale settlement, TOP has been developing its high-performance public blockchain. Developers can access TOP’s communication services via SDK and API to create and run decentralized applications (Dapps) with functions such as messaging, voice, video, VPN, CDN, and IoT data transmission.
The testnet of TOP Chain, released in July, can process 2,000 transactions per second (TPS) currently, Steve said. The team plans to roll out the main net of TOP Chain and the side chain for VPN by the end of this year. To support SkyVPN and other Dapps that attract two million daily active users, TOP Chain expects to handle hundreds of thousands TPS upon the launch of the main net. TOP Chain adopts the following four mainstream technologies to expand its capacity:
- Three-layer distributed ledgers consisting of one main chain, multiple service chains(side chains) and off-chain processors
- DAG dual lattice architecture
- Two-layer sharding
- Multilayered consensus network
On TOP Chain, the main chain and service chain are independent of each other. The main chain only processes transaction settlement, while service chains can be added to the system on demand, each type of service corresponding to one service chain. Service chains can also support customized consensus and data structure. Transaction execution is pre-processed on the off-chain processors. For instance, when a user sends a video to another user, the service chain only records the transaction, while the main chain records the change in the user account balance (if any).
DAG structure provides high throughput and scalability, but it has to face obstacles such as high complexity and difficulty in developing smart contracts.
To avoid excessive data on the network, TOP Chain employs dual lattice architecture composed of Unit-Lattice and Block-Lattice.
TOP Chain creates a mini chain for each account to record the sending and receiving of transactions. Each transaction record is called a unit. At regular intervals, TOP Chain takes a “snapshot” of the last unit of all accounts, stores the status data in the block and synchronizes the data to the entire network. TOP Chain then deletes data outside the last unit of each account to reduce congestion caused by excessive block capacity.
TOP Chain also utilizes two-layer sharding technology. Too many shards can lead to massive volumes of cross-shard transactions and consequently block cross-shard routing. To improve the efficiency of routing, the entire system is divided into over 10 zones, and each zone is dynamically split into multiple shards. Shards are synchronized in units of blocks. TOP Chain uses block lattice to track cross-zone state synchronization.
Many DAG-based public blockchains have become too centralized as they changed their consensus mechanism to simplify the structure and expand capacity. IOTA, Byteball and Nano all have implemented what serve more or less as mediators on their chains.
TOP has simplified the DAG structure and implemented a safer and faster consensus mechanism. The consensus mechanism consists of three layers:
- Edge Network. Edge nodes, nodes on the outermost layer of the network, are directly connected to clients and responsible for relaying transactions. To protect routing nodes and consensus nodes, TOP Network does not allow edge nodes to create any transaction or store a complete ledger.
- Routing Network. Routing nodes route transactions to Core Network, where the consensus process takes place. Routing nodes also manage shards and synchronize cross-shard account status.
- Core Network. Core Network executes consensus mechanism. A VRF algorithm randomly chooses nodes that make up shards. A PBFT algorithm randomly selects consensus nodes in a shard. Each shard consists of at least 21 consensus nodes and nine backup nodes.
Dapp developers on TOP Network purchase communication services offered by miners via TOP Marketplace, a decentralized platform that allows miners to submit offers and Dapps to make inquiries. Based on factors including price and service quality, TOP Marketplace matches Dapps and service-providing nodes and then generates contracts.
TOP Network does not charge gas fee for general transaction, but it requires payments for high-value, high-frequency transaction, account registration and the deployment of smart contract.
Those fees are intended to prevent TOP Network from DDoS attacks in the form of transaction flooding, Steve said. TOP Network burns the tokens it receives from those payments to offset the additional tokens issued each year, which are used to reward nodes that do not participate in mining.
Apart from the competitive technology, another major advantage of TOP Network is the large user base on its existing apps, Steve said.
“A big problem for current public blockchains is that they have neither enough real transactions nor sufficient Dapp developers on them, so it’s tough for those blockchains to evolve and consequently developers will become reluctant to use them,” Steve said. “TOP Network is developed upon existing apps so that we can execute and improve our project quickly and boost developers’ confidence in the public blockchain.”
Decentralized communication infrastructure does not always lead to decentralized apps. Although TOP Network is decentralized, developers have the freedom to decide whether to build a decentralized app on it.
TOP’s founding team has a strong technical background and successful track record of entrepreneurship. Steve was among the earliest employees of WebEx, the world’s largest provider of Web conferencing service. After WebEx, Steve founded Cenwave, a video conferencing software company acquired by Huawei in 2010. Noah Wang, Chief Marketing Officer at TOP Network, held managerial positions at insurance company Starr, Industrial and Commercial Bank of China and accounting firm PwC before joining TOP.
TOP Network raised a $2 million seed round of funding earlier this year. Investors included Daocin Capital, Tsinghua Entrepreneur and Executive Club Fund, Dream Chaser Capital, Hikvision founder Hongjia Gong and Vision Plus Capital founder Yongming Wu.