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Kowala Protocol

The Kowala Project has its own implementation of the Tendermint protocol. Tendermint is a weakly synchronous, Byzantine fault tolerant (BFT) state machine replication protocol, with optimal Byzantine fault tolerance and additional accountability guarantees in the event that the BFT assumptions are violated. There are varying ways to implement Proof-of-Stake algorithms, but the two major tenets in Proof-of-Stake design are chain-based PoS and Byzantine fault tolerant-based PoS. The Kowala protocol implements a hybrid of both — we use the Tendermint protocol for fast finality - strictly choosing consistency over availability - while leveraging Ethereum's smart contract platform to manage the dynamic validator registry and to govern part of the protocol - for instance, the application of punishments to faulty validators.

Some of the main/unique properties of the Kowala project are:

  • Fast-finality (1 second confirmations!).

There are certain sacrifices that must be made to get a certain experience with fault tolerant consensus protocols. The following picture summarises the tradeoffs that must be made when choosing a fault tolerant protocol:

Figure 1 - Vlad Zamfir's triangle.

Tendermint falls somewhere along the bottom-left corner while Kowala is focused on the top corner - we believe that fast confirmations will be essential to rival the current payment networks(Visa, Mastercard, Amex) and to achieve mass adoption. Based on that, we choose to create finalized blocks and have fast finality via tendermint protocol. This way, we can guarantee a smooth experience while overcoming the major points of failure in today's financial systems: breaches in security, network downtime, or network outages. Note that a "small number of nodes" is relative. We can extend the number of nodes to a certain extent by imposing high tier hardware. The speed of progress does not depend on system parameters, but instead depends on real network speed.

Some of the reasons why we've decided to focus on the ethereum client:

  • As of Jan 2018 Ethereum tokens account for 90% Market share.

We believe that most of these projects will benefit from a stable coin context - it's not uncommon for volatile cryptocurrencies to fall or rise more than 50% in a day. While traders and crypto supporters are used to those fluctuations, they could be catastrophic for the average person — no one wants to wake up and find half of their savings missing. No one can live with a currency that changes value while they’re in the grocery store. Kowala provides a similar application programming interface that facilitates porting any project from Ethereum to Kowala.

  • Smart contracts may be revolutionary and they are fundamental for Kowala's use cases. The first set of standards are also being discussed by this community.
  • Ethereum accounts for most of the scalability research underway (+100k tx/s).

  • Chain-based Proof-of-Stake features.

Kowala network is composed by a set of core contracts that automatically coordinate specific operations, vital to the network. For instance, the validator manager contract handles the validators' registration/deregistration or punishments. We achieve this by embeddeding the managers' contracts in the genesis block. By following this approach not only the implementation is simpler but also it becomes easier to upgrade very sensitive parts of the system.