Protocol
Overview
The Collaterize Protocol is the decentralized backbone of the platform, designed to meet the growing demand for tokenized assets. It connects users, asset managers, and real-world assets in a transparent ecosystem, addressing key challenges like compliance and scalability while ensuring decentralization.
By merging the openness of public networks with the efficiency of private networks, Collaterize provides both scalability and speed. This infrastructure dynamically scales to handle varying traffic, capable of processing up to 50 million transactions daily. Nodes can be scaled up to 30x in high congestion scenarios, with ongoing R&D aimed at further enhancing scalability.
Security and compliance are integral. Wallets are activated only after users complete KYC, KYB, and AML checks, ensuring full regulatory compliance. Compliance modules verifies all assets on the protocol, maintaining rigorous standards and act as the gateway to ensure that only verified users and compliant assets interact within the Collaterize ecosystem.
Access to the Collaterize Protocol is straightforward through various interfaces, ensuring secure and compliant engagement with the blockchain. This approach guarantees an efficient, transparent platform for managing and trading tokenized assets.
Specifications
Network
Collaterize Protocol (view explorer)
Block Validation Time
2~5 seconds
Gas Fees
No gas fees required
Compatibility
Technology
Hyperledger (Besu): Collaterize K8s Remastered Version
Consensus Mechanism
Open-Source Repo Adaptation
The Hyperledger open-source repository has been reviewed and adapted for installation in Kubernetes environments (Clustering): Dynamic Scaling.
Recommended Kubernetes Cluster Infrastructure
Microsoft Azure Standard_L16s_v2 (NVME storage)
Minimum Required Blockchain Nodes
4 Nodes, each capable of scaling 60x
Maximum Blockchain Nodes
30 Nodes, each capable of scaling 60x
Maximum Performance
50 Million Transactions per Day
Transaction Pool (Max) per Block
4096 Transactions (If exceeded, the next block is required)
Node Management & Decentralization
The Collaterize Protocol is designed to decentralize the validation of tokenized real-world assets through strategic partnerships. Initially, Collaterize operates four validator nodes, but the protocol supports up to 30 validators to ensure security and network integrity.
Each validator node contributes to decentralizing the network, with strict technical requirements for performance and scalability. Every node must be deployed using a Kubernetes Cluster (L16s_v2), ensuring that all participants meet a standardized level of computational power.
Network Expansion
As the network scales beyond its initial setup, decisions about node additions and removals shift to the Validator Governance System. This system ensures that the community of validators governs network changes, ensuring true decentralization.
When the network surpasses four validator nodes, decisions such as adding or removing nodes are made through a decentralized voting system. Validators play an active role in managing the future of the protocol, ensuring that network integrity and scalability are maintained.
The RPC nodes (responsible for managing network requests) are distinct from validator nodes, which are dedicated to verifying transactions and ensuring security. Decentralization efforts currently focus solely on validators.
Governance and Voting
Collaterize’s governance framework revolves around a 51% consensus mechanism. Validators vote on critical protocol changes, including node management. If 51% of the network validators agree on an action, it is executed across the protocol. This ensures a democratic and transparent system for decision-making.
In case of conflicts between validators, the voting system allows the network to resolve issues efficiently, maintaining stability and security. Validators can, for example, vote on the inclusion or removal of nodes, keeping governance decentralized and adaptable to the network's needs.
In the early stage, node validators will be democratically selecting the election of new validators based on the following criterias:
Reinforcement of the Nakamoto Coefficient n= 30
Contributing to securing the network to receive staking incentives
Mixing public and private organizations
Mixing domain of expertise and organization size
Mixing geographical zones over the globe
Risk of Network Forks
Decentralized governance inherently carries the risk of network forks. Should 51% of validators decide to make significant changes (such as creating their own RPC services or even removing Collaterize-controlled nodes) the network may split, creating a fork. In such cases, two distinct blockchains would emerge, each following its own governance model and validator community.
Infrastructure Requirements and Validator Incentives
Setting up a validator node requires a $20K yearly commitment. This covers infrastructure and hosting, including cloud services, computational power, and maintenance, ensuring all validators meet the protocol’s operational standards.
Collaterize assists validators with technical setup and continuously updates hardware recommendations to improve network performance. Validators benefit from regular updates, including improved SSD/NVME technologies and enhanced RAM/CPU capabilities, ensuring that all nodes maintain high performance as the protocol scales.
Validator Rewards
Validators on the Collaterize Protocol are rewarded for their participation with 10% of the revenue generated from Real-World Asset (RWA) purchases. This reward model incentivizes validators to ensure the network remains secure, decentralized, and efficient while directly benefiting from the growth of the ecosystem.
Token Creators and RPC Access
For participants who wish to create tokens or smart contracts without the responsibility of validating the network, Collaterize offers an alternative. These participants can be added to a whitelisted RPC, allowing them to interact with the protocol without running a validator node. This flexibility supports a wider range of ecosystem participants, from developers to businesses, without requiring the full infrastructure commitment of validator operations.
Examples of commands for node management include:
Add a Node:
Remove a Node:
Collaterize provides node specifications annually, ensuring that nodes meet the minimum power requirements necessary for network participation without constraints.
The decentralized Validator Governance system is also designed to evolve. It can propose updates to node specifications, such as advancements in SSD/NVME technology or increases in minimum RAM/CPU, to maintain cutting-edge performance and infrastructure standards.
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