One of the last announcements of IOTA was that $5 million in grants will be used for research on Coordicide, which is a system that’s aim is the distributed ledger technology (DLT) that is permissionless and scalable.
The Goal Behind the Coordicide Research
According to the IOTA team, the goal behind this research is to achieve a better understanding of how it works and how it can be implemented in the IOTA ecosystem. This merge will remove the IOTA network’s centralized coordinating node. Currently, this centralized node is owned by the IOTA Foundation and in theory they could harm the network in case they decide to prioritize or freeze transactions or funds. This node can also be considered a singular point of weakness for the network as it can be hacked and acts like a bottleneck to the scalability of the network.
This is why, in order to further contribute towards spearheading the process, the IOTA Foundation is willing to offer $5 million in grants in exchange for Coordicide related research. Some of the most sought-after areas of research that are prioritized is spam prevention, network optimization, reputation systems and a decentralized RNG (Random Number Generator).
What About the Tangle?
As you may already know, unlike most other cryptocurrencies, IOTA does not use a blockchain-based network structure. The magic tech behind the IOTA network is the distributed ledger also known as Directed Acyclic Graph (DAG). The Tangle is the network of multiple transaction chains that co-exist and interconnect.
Although DAG allows for very high scalability, it brings a lot of unique challenges regarding the security, decentralization and the way the network can manage the assets. IOTA are doing their best to prevent issues in the future and are even using Proof of Work in order to prevent spamming of the network, but new specialized hardware like FPGAs are becoming more and more common and they can deal with PoW easily. Hopefully this research will bring alternatives to the consensus mechanism with verifiable delay functions and admission control strategies.
The Coordicide project also aims at researching alternatives for optimization of the network that will assist in the avoidance of congestion. This can be achieved via optimization of the gossip layer, which will prevent nodes from forwarding redundant transactions and messages to their neighbors and also allow nodes to process and route transactions on a predefined shard of the network. Further potential optimizations are:
- A reputation system based on the node behavior via number of tokens transferred, node activity and type of participation in the network (active or passive)
- Optimization of the Tip Selection Algorithm (TSA) by studying the Nash equilibrium and identification of attacks that aim to hinder confirmation rate or block a certain transaction from being accepted
- Analysis on possible future attacks on the IOTA protocol with the assistance of A.I. and develop security features based on the results and etc.
Conclusion
As a conclusion we would like to mention that the IOTA Foundation and the development team are very dedicated to their community and project. This is maybe one of the largest endeavors that they have taken for the better future of the network.