RESEARCH REPORT ABOUT SKALE NETWORK

21 min readNov 25, 2020

Author: Gamals Ahmed, CoinEx Business Ambassador

ABSTRACT

Decentralized networks allow for a new wave of business models and organizational structures to come to light. Their potential for societal and business impact have been well documented as have their shortcomings concerning performance, usability, and cost-effectiveness. The SKALE Network has been designed with the goal of resolving the technical scalability, user experience, and cost issues affiliated with decentralized networks such as Ethereum. In addition, SKALE is designed to bring application specific architecture to developers resulting in enhanced configurability and modularity.

SKALE proposes a decentralized, configurable network of on-demand blockchains that support high-throughput, low-cost, and low-latency transactions enabled with storage capabilities and advanced analytics. Additionally, SKALE proposes messaging protocols that enable participants to communicate between these disparate systems.

This system aims to provide Ethereum-as-a-Service to developers by providing a gasless subscription-based decentralized network for the provisioning and deployment of high-throughput, EVM-compatible, storage-enabled, provably secure byzantine fault tolerant blockchains.

The primary use for these blockchains are Ethereum-compatible elastic sidechains. Each proof-of-stake sidechain is highly configurable, comprised of nodes, which stake SKL tokens on the Ethereum mainnet, and leverages an asynchronous byzantine fault tolerant protocol for its consensus mechanism.

1. INTRODUCTION

The SKALE Network is a security and execution layer that connects with the Ethereum network and lets developers build their projects faster and with better performance. It is an elastic and decentralized blockchain network that supports thousands of independent blockchains, sidechains, storage chains, and other types of subchains — all tied to the Ethereum public mainnet. This network forms an execution layer in the form of high-performance chains that facilitate transactions based upon on-chain escrows.

The SKALE Network will eventually be comprised of thousands of independent validator nodes, which will offer the security guarantees of a Layer 1 blockchain network but use resources in a more efficient, performant, and versatile manner. One thousand validators in the SKALE Network, for example, can support 8,000 independent chains. These chains could range from the smallest of sidechains to very large public and private blockchains — each operating with faster commit times, lower transaction costs, and higher transaction throughput.

The SKALE Network is an Elastic and Decentralized Blockchain NetworkThat Ties Closely with the Ethereum Mainnet.

The SKALE Network with the Ethereum Mainnet

2. OVERVIEW ABOUT SKALE NETWORK

The SKALE Network is a high-throughput, low-latency, configurable byzantine fault tolerant, elastic blockchain network built interoperably with Ethereum. The initial and primary use case for this network will be in form of elastic sidechains for the Ethereum Blockchain. In this context, it can be described as an ‘Elastic Sidechain Network’.

SKALE Network is an L2 scaling solution for Ethereum, primarily aimed for scaling smart contracts. SKALE enables the creation of app-specific sidechains, which are secured by SKALE’s own validator set.

SKALE is an Ethereum-compatible network with a leaderless consensus designed to run on an uncapped number of independent nodes, each of which will be providing resources to multiple high performance decentralized elastic blockchains.

Sidechains in the network are operated by a group of virtualized subnodes selected from a subset of nodes in the network and are run on all or a subset (multitenancy) of each node’s computation and storage resources. Each sidechain is highly configurable, with consumers being able to choose their chain’s size, consensus protocol, virtual machine, parent blockchain, and additional security measures (e.g. virtualized subnode-shuffling frequency).

SKALE is a network of configurable, independent mini-chains (often called “dynamic shards”) that exists one layer above the Ethereum blockchain. These dynamic shards are capable of processing token transfers as well as decentralized applications (dApps). Each SKALE chain uses a randomly selected subset of the network’s validator pool to verify transactions and state changes.

transaction costs.” They claim that their efforts should help developers with bringing decentralized applications (dApps) to market that can “live up to the high consumer demands.”

EVM-compatibility within Elastic Sidechains allows dApp developers to deploy existing Ethereum-based smart contracts directly to them wile an increased gas limit lifts the computation and storage limitations of the Ethereum mainnet EVM.

The SKALE Network is comprised of permissionless SKALE Nodes and the SKALE Manager (located on Ethereum).

2.1 SKALE MANAGER

The SKALE Manager exists on the Ethereum mainnet and serves as the entrypoint to all other smart contracts in the SKALE ecosystem. This contract manages the orchestration of all entities within the network, inclusive of Elastic Sidechain creation / destruction, Node creation / destruction, withdrawals, and bounties.

Chains derive their security from the SKALE Manager contract, which is secured by a pool of randomly appointed and frequently rotated validators. Among the early signed up validators are ChorusOne, StakedUS, BisonTrails etc.

2.2 TOOLS & COMPATIBILITY

SKALE Network is designed to work with all Ethereum compatible tools such as API-based wallets, and monitoring and analytics.

2.3 WHY THE SKALE NETWORK IS UNIQUE?

SKALE helps dApp developers speed up smart contract development and increase performance. SKALE is EVM-compatible and allows builders to make use of Ethereum’s existing developer tools.

The SKALE Network counteracts security risk by using a pooled validation model. This model leverages the security advantages offered by a large number of validator nodes by

combining random node assignments with frequent node rotation among the validator sets. Therefore, each independent sidechain is protected with the resources of the entire network.

To further secure the network, each validator must stake a significant amount of value into the network via a SKALE token. Sidechains are also resourced and provisioned by users via a subscription model that also makes use of the SKALE token. These tokens are staked into the Ethereum mainnet and controlled by smart contracts there. Smart contracts on the mainnet also manage the token inflation and the monthly payouts to validators (including proceeds from the inflation). These smart contracts also handle the monitoring of node performance as well as the provision of penalties in the event of any malfeasance by a node.

The SKALE Network is a custodial execution layer (Layer 2). Whereas non-custodial approaches use a system of fraud proofs to allow funds to move between chains, SKALE makes use of BLS signatures, deposit boxes within the Ethereum mainnet, and other mechanisms to allow for custodial ownership and use within the network (which allows it to leverage the security guarantees of the mainnet but gain the performance inherent in Layer 2). Whereas other Layer 2 models attempt to use mainnet interactions to run verification and/or fraud proofs, SKALE uses the Ethereum mainnet for staking and for other critical operations in a way that is better attuned for the creation of a robust and fully decentralized security and execution layer. The SKALE Network can also support non-custodial Layer 2 efforts via BLS Rollups and eventually will support other proven L2 solutions as they progress from research phase to production ready.

2.4 THE PROBLEM SKALE IS SOLVING

To increase adoption of Ethereum-based applications — and decentralized solutions in general — the industry needs to scale not just transaction throughput but also the user experience. Scaling the user experience means solving for transactions per second as well as solving for latency, connectivity to API-based wallets, cost-effectiveness, seamless messaging between chains, and much more.

The SKALE Network is an integral solution to blockchain scaling which addresses speed, security, ecosystem interoperability, AND transactions per second. A configurable network of elastic sidechains supports high-throughput and low-latency transactions without the high transaction costs found in public mainnets. The network offers expanded storage capabilities along with embedded connectivity and interchain messaging with the Ethereum mainnet. All of this is performed using a pooled transaction validation and security model that is efficient, scalable, and collusion-resistant.

The primary benefits are near-zero gas costs, faster commit times, and increased transaction throughput. Faster commit times translate into lower latency, which allows for a better user experience. Reduced gas costs benefits both developers and users and removes friction to mass adoption.

Elastic sidechains can also provide a significant amount of additional on-chain storage capacity for decentralized applications. Storing data on public chains is costly and limited whereas data storage within the SKALE Network is more extensive and economical thereby reducing the challenges app developers run into when addressing the storage needs of decentralized apps.

Using an Execution Layer solution like the SKALE Network is highly effective for building and scaling Ethereum-based applications, opening up the potential for an ever-expanding spectrum of use cases from games and decentralized finance to productivity and media applications and everything in between.

2.5 HOW DOES SKALE WORK?

The goal of SKALE is to enable dApps to access independent app-specific chains secured by SKALE’s validator set. In other words, app-specific sidechains purchase security from SKALE’s validator set.

2.6 WHAT IS SKALE’S BUSINESS MODEL?

SKALE can be thought of as Ethereum-as-a-service. A dApp pays a subscription fee based on the resources it needs (computation, storage, and bandwidth) from SKALE’s validator set.

2.7 HOW DOES SKALE CONNECT TO ETHEREUM?

App-specific chains connect to Ethereum via the SKALE Manager smart contract that serves as the point of entry and exit. dApps deposit their tokens to the SKALE Manager smart contract, which mints corresponding tokens on the app-specific chain.

2.8 WHO IS BUILDING SKALE NETWORK?

SKALE Network is an open source Web3 platform intended to bring speed and configurability to blockchain. SKALE Network is the project by N.O.D.E. Foundation — the Lichtenstein Foundation that aims to advance development of Web3 technologies and make decentralized web more user friendly and accessible for developers, validators, and end users.

N.O.D.E. Foundation partners with SKALE Labs, and other top entities and investors around the world to facilitate development of SKALE Network.

SKALE Labs is the core team involved in creating the technology specs, creating the code, and growing use and awareness of the network. SKALE Labs is headquartered in San Francisco, California.

2.8.1 SKALE NETWORK TEAM

2.8.1.1 FOUNDERS

1. Stan Kladko, PhD: Co-Founder / CTO

Stan eats, breathes, and sleeps decentralization and cryptography. Prior to making it his life mission to help scale the blockchain, he spent many years attaining his PhD in Physics, spent 16+ years as a technology executive in Silicon Valley and has 18 years of cryptography experience. His resume includes Physics at Max Planck Institute, Los Alamos National Laboratory, and Stanford. SunMicrosystems Java Virtual Machine team, early 2000’s Crypto start-ups Ingrian Networks and The Crypto Lab, co-founder of Cloudessa and Galactic Exchange prior to starting SKALE. He is also an active member and contributor to the Ethereum Research Foundation.

2. Jack O’Holleran: Co-Founder / CEO

Jack’s passion for decentralized systems and blockchain led him to join efforts with Stan to solve the blockchain scalability problem. He is a veteran Silicon Valley Technology entrepreneur with a deep background in machine learning/AI technologies, and blockchain. His resume includes co-founder of Aktana, co-founder IncentAlign, and executive positions at Good Technology, and Motorola. His first work with Digital Currencies was in 2008 building a digital currency platform for Enterprise Resource Allocation. He has been an active Cryptocurrency investor and an evangelist for decentralized systems since early 2013.

2.8.1.2 OTHER SKALE NETWORK TEAM

2.7 SKALE NETWORK & FINOA

Ethereum as a Service Platform SKALE Network to Use Custody Support Services from Finoa for SKALE’s Native Token

Finoa has partnered with Skale Labs in order to offer institutional-grade custody support for SKALE, which is the native token that’s used to power the SKALE Network.

The SKALE Network is an Ethereum-as-a-service platform that has been developed to support the “exponential” growth of the Ethereum (ETH) blockchain network and ecosystem. SKALE Network developers aim to “ease network traffic and significantly lower transaction costs.” They claim that their efforts should help developers with bringing decentralized applications (dApps) to market that can “live up to the high consumer demands.”

As stated in a release shared with Crowdfund Insider:

“With a sophisticated and effective approach to Proof of Stake, combining a pooled validation model with random note selection and frequent note rotation, the SKALE Network ensures that it is scalable, secure, and economically efficient. A testament to that is SKALE’s recent Phase 2 mainnet launch that went live with over $80 Million in Total Value Locked, resulting in one of the most distributed decentralization efforts at the launch of a blockchain network to date.”

The announcement further noted that Finoa will be offering professional investors an opportunity to stake their allocations and “deliver security to the SKALE Chains in a seamless, safe, and secure manner directly from Finoa’s secure infrastructure.”

CEO of SKALE Labs Jack O’Holleran stated that offering blockchain network participants an ecosystem of suitable products for every interaction is “incredibly” important to the SKALE Community which is why working cooperatively with Finoa made “a lot of sense.”

The release also mentioned that Finoa’s user-friendly digital asset custody solution will aim to offer SKL token investors a “secure” and “compliant” way to hold and manage their assets, while being able to access them easily for use within the network.

Finoa Co-Founder and Co-CEO Christopher May remarked:

“In collaboration with Skale Labs, we are excited to add another promising project to our platform and enable investors to securely store and stake their SKALE tokens with us.”

May added that the SKALE Network’s high-performance architecture aims to solve some of the speed and network congestion problems with the Ethereum blockchain. He also noted that it offers developers a set of tools to “power the next wave of innovative applications.”

Finoa is a regulated custodian for crypto-assets. The company provides services to professional investors with Custody and Staking. The Finoa platform allows users to store and manage their digital assets in a secure manner. The company claims its services are “highly intuitive” and offer a “unique” user-experience, allowing “seamless” access to the ecosystem of decentralized finance (DeFi).

Finoa claims that it works with established VC firms, large corporations and financial institutions. Founded in Berlin in 2018, the company has received a “preliminary” crypto-asset custody license and it’s being supervised by the German Federal Financial Supervisory Authority (BaFin).

Finoa claims that it works with established VC firms, large corporations and financial institutions. Founded in Berlin in 2018, the company has received a “preliminary” crypto-asset custody license and the German Federal Financial Supervisory Authority (BaFin) is supervising it.

3. SKALE NETWORK TECHNOLOGY

The SKALE Network is a configurable network of elastic sidechains that supports high-throughput and low-latency transactions without the high transaction costs found in public mainnets. The network offers expanded storage capabilities along with embedded connectivity and interchain messaging with the Ethereum mainnet. All of this is performed using a pooled transaction validation and security model that is efficient, scalable, and collusion-resistant.

The SKALE Network offers a decentralized cloud for the provisioning and deployment of high-throughput low-latency elastic sidechains. These elastic sidechains are compatible with the Ethereum Virtual Machine (EVM) and offer configurable resource settings that include network size, transaction throughput, storage capacity, and enhanced security features.

Elastic sidechains in the SKALE Network are operated by a group of virtualized subnodes selected from the larger set of nodes in the network. The sidechains use the node’s

computation and storage resources — ranging from a portion of the node resources to all of the resources depending on the size of the chain selected. Each chain makes use of an asynchronous byzantine fault tolerant protocol as its consensus mechanism and can message other chains via a secure interchain messaging protocol.

In essence, the network can be viewed as a sophisticated container orchestration mechanism combined with a payment system — all in the service of running an elastic blockchain network. The SKALE protocol and a corresponding SKALE token enable this powerful combination of processing potential with incentivized execution.

SKALE technology is based on BLS threshold signatures, Distributed Key Generation, SGX, and SKALE Consensus (Asynchronous Binary Byzantine Agreement consensus protocol).

The SKALE Network is designed as a security and execution layer that ties in closely with the Ethereum network in service of its security and operational model. The smart contracts that maintain node operation all execute on the Ethereum mainnet. In addition, the validator stakes and user subscriptions not to mention the token inflation, are also maintained or controlled by smart contracts running within the Ethereum mainnet.

3.1 SOLIDITY SUPPORT

The SKALE Network uses Solidity as its contract language sparing developers from having to learn a new language. Solidity is an object-oriented, high-level language for implementing smart contracts. It was influenced by C++, Python, and JavaScript and is designed to target the Ethereum Virtual Machine (EVM).

3.2 ETHEREUM EVM COMPATIBILITY

The SKALE execution model is fully compatible with the Ethereum Virtual Machine (EVM) making it so that smart contracts that run on the Ethereum mainnet can also run on the SKALE Network. There is no need to rewrite or port smart contracts. Anything written for the EVM will execute on SKALE. Developers are therefore able to migrate to SKALE elastic sidechains in a phased manner — moving smart contracts to SKALE on an individual basis as the needs and benefits dictate.

3.3 DEVELOPER TOOL SUPPORT

Support for Solidity and the Ethereum VM also extends to commonality with Ethereum developer tools. Developers are able to use the same tools they use when working on the Ethereum mainnet. These include connecting to the network via web3.js and web3.py as well as using tools such as Truffle and Remix.

3.4 TOKEN SUPPORT

The SKALE Network supports all major Ethereum token standards including ETH, ERC20, ERC721, ERC777, and Dai. Interchain messaging, as well as deposit boxes and token clones, ensures the integrity and fidelity of token operations with the SKALE Network.

3.5 COMMON WALLET SUPPORT

The SKALE Network supports a number of major crypto wallets and browser plugins and bridges. These include Bitski, Fortmatic, Metamask, Portis, Torus. These interface components are well-regarded in the community and used by thousands of developers.

3.6 FROM DEVELOPMENT TO LARGE SCALE PRODUCTION

The SKALE Network has been built to be easy to use in development as well as expandable and performant for use in production. Developers can select chain characteristics and stake tokens and get immediate access to one or more elastic sidechains. The resource configurations for these chains can also be modified seamlessly thereby accommodating increased transaction loads, storage requirements, security concerns, and other project needs. The network is an optimal solution not only for rapid development but also for use with even the largest production solution.

Because an elastic sidechain in the SKALE Network can be easily resized, it lets chains move from a small chain size and limited transaction throughput up to a large chain with 2,000 transactions per second and highly expansive storage capacities. Resource changes take place in real-time without any additional operational efforts or node management by the user.

The net result means that the SKALE Network provides an easy-to-use and ready resource for even the most demanding defi, gaming, media, and productivity applications. Single developers, vendor networks, consortiums, and any other organizational types can make use of the SKALE Network for one or more sidechains to provide readily available, safe, and secure transaction processing for decentralized solutions.

The design and structure of the network also make moving from Web2 to Web3 a relatively effortless process. The development environment is the same as developing on the Ethereum mainnet, which has the largest global blockchain developer community with access to tens of thousands of developers and a suite of ready-made tools and other developer resources. With interchain messaging and sidechain storage, existing cloud developers will be able to use many of the same current patterns they use for building applications in the cloud. Additionally, there is no operational effort necessary for running sidechains aside from setting sidechains options and then staking tokens for the chain resources.

3.7 CREATING AND USING A SKALE ELASTIC SIDECHAIN

Elastic sidechain within the SKALE Network is highly configurable, with developers being able to choose the chain size, consensus protocol, virtual machine, parent blockchain, and additional security measures.

When creating a sidechain, a developer first configures their chain via a decentralized interface and then submits payment to the network in the form of SKALE tokens. The token amount depends on the size of the network and the duration of time they want to sponsor the network resources. There are several sidechain sizes (small, medium, and large) as well as duration options (3mo, 6mo, 12mo). Storage capacity within the network is also configurable.

Each elastic sidechain is randomly assigned the use of a set of validator nodes. The default number is 16 nodes but the number can be any configuration of 3n+1 where n>=1. The size of a chain specifies how much of a virtualized subnode a chain will use. Chains can use either 1/128 (small), 1/8 (medium), or 1/1 (large) of each node’s resources. As the SKALE Network evolves, it will eventually allow for users to specify the number of virtualized subnodes, number of signers, and size of the virtualized subnodes along with other enhanced capabilities.

Because the SKALE Network is EVM-compatible, developers are able to use the same tools they use when working on the Ethereum mainnet. These include writing contracts in the Solidity language, connecting to the network via web3.js, web3.py, and using tools such as Truffle and Remix.

The SKALE Network also offers interchain messaging as a native capability. Interchain messaging is enabled by the virtualized subnodes which are able to validate that a transaction was signed and committed by the subnodes in another chain using BLS signatures (Boneh-Lynn-Shacham). This unique and decentralized form of messaging allows for patterns not unlike the use of push notifications or remote procedure calls in traditional Web2 development.

Configurable Settings Include Network Size, Transaction Throughput, Storage Capacity, and Enhanced Security Features.

3.8 SKALE + TORUS

Torus is a user-friendly non-custodial key management system for decentralized applications. The Torus team is hyper-focused on building an accessible and secure gateway to onboard mainstream users to the decentralized ecosystem.

The combination of the SKALE Network and Torus is a natural one as their purposes and capabilities complement each other. Integration is simple regardless of whether developers are using the Torus wallet directly or using the DirectAuth integration. With the Torus wallet, access to the SKALE Network is built in. Developers can simply change the RPC endpoints and then they’ll be able to access their SKALE chain(s).

With Torus’ DirectAuth capability, developers have greater control over key management and user permissions. Insofar as connecting to the SKALE Network, they can do so as well with the SKALE SDK. In other words, connecting to the SKALE Network can be done via the Torus Wallet or directly through the SKALE SDK. The combination is important because both increase app usability and reduce the friction that is unfortunately commonplace in many blockchain-based applications.

Both SKALE and Torus view it as their mission to make it easier for developers to build a new generation of Dapps and to help power this next great move in decentralized solutions.

4. SKALE NETWORK TOKEN

The SKALE token (SKL) is a hybrid use token which represents the right to work in the network as a validator, stake as a delegator, or access a share of its resources by deploying and renting an Elastic Sidechain or Elastic Blockchain for a period of time as a developer. Users pay SKALE in a subscription-based model to rent these resources (computation, storage, and bandwidth) for a predetermined amount of time in the form of an Elastic Sidechain. Validators stake SKL into the network and then gain the right to run nodes and earn both fees and tokens via inflation. Delegators may delegate their tokens to validators and earn rewards.

SKALE Networks’s modular protocol is one of the first of its kind to allow developers to easily provision highly configurable blockchains, which provide the benefits of decentralization without compromising on computation, storage, or security.

It serves as the built-in instrument of transfer for facilitating three main functions:

1. Security of and staking in the network. SKL token holders (delegators) stake their SKL tokens to validators who run nodes that make the SKALE network function by validating blocks, executing smart contracts, and securing the network. They are rewarded with SKL tokens for their efforts.

2. Payment method for SKALE Chain subscription fees. Developers purchase their subscription access to elastic blockchains (S-chains) using SKL tokens.

3. Governance and voting. SKL tokens will be used for on-chain voting, which will control all economic parameters of the SKALE Network.

4.1 TOKEN PROFILE

Ticker: SKL
Token type: ERC777
ICO Token Price: 1 SKL = 0.03 USD
Fundraising Goal: $4,375,000
Total Tokens: 4,140,000,000
Available for Token Sale: 1.8%
Min/Max-Personal Cap: TBA / $1,153
Token Issue: ALL PURCHASERS WILL HAVE AN OPPORTUNITY TO PUT THEIR TOKENS TO USE BY THE FIRST EPOCH ON OCTOBER 1ST AND THEREFORE SATISFY PROOF OF USE ENDING ON DECEMBER 1ST.
Accepts: ETH, DAI, USDC

4.2 ERC-777 TO SUPPORT DELEGATION ON TOKEN LEVEL

SKALE is built on an innovative ERC-777 token standard, which supports delegation on the token level. ERC-777 is fully backwards compatible with ERC-20, which means that it is supported by all participants of the Ethereum ecosystem with ERC-20 support.

One of the important functions of the SKL token in the SKALE Network is its ability to contribute to network security via delegation and staking. Unlike with ERC-20, with ERC-777, a delegator no longer needs to send the token to the delegation smart contract, but instead shares with the staking provider the secure delegation key while storing the tokens in the cold or hot wallet of their choice.

4.3 SKALE TOKEN ON CONSENSYS ACTIVATE

The N.O.D.E. Foundation chose the ConsenSys Activate platform for the SKALE Network launch because of their approach to the legal and regulatory ambiguity around utility token offerings that decentralized projects face. Activate provided a token sale, staking and delegation platform for fair and distributed token launches. Post sale, SKL token holders can use Activate’s easy token staking and delegation functions to earn network rewards. More information on token delegation can be found in the SKALE Delegator Hub.

Utilizing Activate’s more compliant KYC policy, the final number of approved participants in the SKL token sale was 4,533 with $53,300,000 in purchase intent, which was more than ten

times the total token availability. On Friday, September 11, 2020, the public token sale of SKL, which powers the SKALE Network’s Ethereum scaling network, concluded. 3,736 people from 90 different countries purchased 167,139,884 SKL at $0.03 USD/SKL, creating a broad network of participants that spans the globe and significantly increases network security.

SKALE’s mainnet phase 2 went live October 1, with over $80 Million USD in Total Value Locked. A global cohort of roughly 4,000 people and entities from 90 different countries secured 135 SKALE Network nodes across 46 validator operators by staking their tokens.

4.4 WHAT IS THE ROLE OF THE $SKL TOKEN?

Validators stake $SKL in the SKALE Manager smart contract to earn fees and inflation rewards. Holders of $SKL can delegate their tokens to any validator in the SKALE network.

4.5 HOW CAN DAPPS START USING SKALE?

A dApp developer who wants to use SKALE has to:

1. Decide how much additional capacity they need;

2. Select the duration for the additional capacity; and

3. Pay the subscription fee to the SKALE Manager contract’s validators.

4.6 WHO CONTROLS THE PROTOCOL?

The SKALE network is currently governed by the non-profit N.O.D.E. Foundation. The goal is to transfer the ownership and control of the network to $SKL tokenholders over time.

4.7 LAUNCH DETAILS

The project raised a total of $17.1 million from private investors to fund its pre-production development. The funding includes a $10 million contribution from SKALE Labs, which used the $9.65 million it raised in previous SAFT sales to support the SKALE Network. These sales combined to purchase 54% of the initial SKL supply (35% of the max supply) and were subject to investor lockup periods ranging from 6–36 months based on the individual SAFT agreements.

SKALE has also allocated 15% of the total SKL supply at launch (10% of the max supply) to the N.O.D.E. Foundation, the non-profit entity created to support the future development of the network. These tokens will vest over a seven-year period following SKALE’s mainnet launch.

The team dedicated the remaining tokens (31% of the initial supply or 20% of the max) to themselves, with the majority going directly to the founders and a smaller batch allocated to an Employee Token Option Pool. The team’s tokens will remain locked for the first year and will then vest over the following three years.

5. SKALE NETWORK ROADMAP

5.1 MAINNET LAUNCH: PHASE 1

June 2020

Network Launch

Phase 1 is a restricted Mainnet that will not support any staking or token transfers. This phase is also limited to validators who have already participated in SKALE’s testnet and have gone through an onboarding process.

5.2 MAINNET LAUNCH: PHASE 2

Software Release

The second phase, which will follow SKALE’s upcoming token sale, will unlock staking and new issuance while keeping restrictions on transfers and exchange listings.

5.3 MAINNET LAUNCH: PHASE 3

Software Release

Following the 90-day Proof-of-Use period, the network will turn into an open state where tokens that are unlocked can be transferred and exchanged. It will be open to all developers, and validators as soon as it is feasible during Phase 3.