ZelNodes — The decentralized, scalable, high-availability computing network

6 min readOct 10, 2018

Up-to-date information (11Nov2018) about the approaching incentivized computing network to run dapps, smart contracts, ZelEx, and more

The What

Creating a scalable and decentralized network of computing power is one of the core tenets of the ZelCash project. This concept is underpinned by a 3-tier structure of computing power, incentivized by a portion of each block find being rewarded to node operators. A multi-tiered approach will allow a wider range of Zel holders to participate, while providing decentralization both in terms of how many different people hold ZelCash, and the physical location of computing power due to the sheer number of nodes expected to be associated with the network; i.e. the more ZelNode operators there are, the more likely those ZelNodes are to be spread out geographically.

The hardware requirements for each tier are larger than most other “masternode” projects. Masternodes are typically required to have very tepid system specs as their sole purpose is to run a daemon and process transactions on their respective blockchains. This process is good for the network, but does not allow for additional computation to take place above securing a network, so running things like dapps and smart contracts (SCs) would very quickly saturate such a network.

With the ZelNodes network accessing significant computing power and the ability to run multiple sidechains simultaneously, the transactions per second (TPS) will be significantly higher than current offerings, allowing dapps and SCs to flow across the network easier and in greater numbers.

ZelDev is the planned developer environment to provide access for dapp creators to program in a widely-accessible language (likely JavaScript) and run their programs on the ZelNodes network. The aim is to provide hobbyists and professionals alike access to the tools and computing power needed to bring dapps and SCs more mainstream and increase their usability.

The Why

The concept of ZelNodes emerged from a discussion on how to scale a decentralized application, development and smart contract platform and network, such as Ethereum. Projects such as Lisk, Neo, and others have been able to do so, however they face the risk of moving away from decentralization, instead only offering the benefits of blockchain technology in a somewhat closed-off environment.

Ethereum is a proof-of-concept that a decentralized network running dapps is feasible and sought after, but currently their TPS performance cannot scale to provide for current demand, allowing a single, widely used dapp to congest the network and cause concerning slowdowns.

ZelNodes builds off previous concepts to expand on the decentralized aspect and provide a scalable hardware pool to significantly boost TPS, allowing the processing of many dapps to function simultaneously. Being on separate sidechains also insulates one dapp from slowing down due to a quick increase in demand of another dapp. Below are some real-world TPS rates as of July 2018:

Ethereum | ~20–25 TPS | 6 minute confirm
Bitcoin | ~7–10 TPS | 20–60 minute confirm
Litecoin | ~60 TPS | 30 minute confirm
Ripple | 1500 (claimed 50k) TPS | 4 second confirm

compared to some FIAT processing systems:

PayPal | 150–500 TPS | near-instant
Visa | 25k (claimed 50k) TPS | near-instant

This shows that conventional money-processing systems have a large edge on current cryptocurrency processing systems. The comparison is also a bit disingenuous since all but Ethereum are only processing value transfer services and not the very broad range of data that dapps will likely utilize in the future.

The How

Hardware will be supplied by node operators, who in turn are rewarded in ZelCash for supplying the network with dedicated processing power. There are multiple options for supplying computing power, including renting from a VPS provider, renting a dedicated server to host multiple ZelNodes, or purchasing a server outright and hosting it in a data center or well-equipped home/office. The monthly cost to either rent or run dedicated hardware is significantly higher than the standard masternode requirement and should be researched thoroughly by a potential node operator.

Hardware requirements:

Basic | 2vCore | 4GB RAM | 50GB SSD | 2.5TB total monthly bandwidth
Super | 4vCore | 8GB RAM | 150GB SSD | 4TB total monthly bandwidth
BAMF | 8vCore | 32GB RAM | 600GB SSD | 6TB total monthly bandwidth

Along with high hardware specifications, which will be benchmarked at intervals to ensure compliance to the set requirements, there is an up-time requirement of >97% to ensure network stability. If a node does not meet the up-time during a payment cycle (TBD), then the operator will not receive payment for that cycle. An up-time guarantee of >97% is provided by many VPS services and allows adequate time for scheduled maintenance and some unforeseen downtime without losing the reward, while avoiding excessive downtime or potential gaming of the rewards system.

Rewards for ZelNodes will come from a static chunk of the total block find reward, set at 25% for node operators and 75% for POW miners. Of the 25% chunk, 15% goes to Basics, 25% to Supers, and 60% to BAMFs. Each chunk of rewards is split among the operators at that tier, e.g. if there are 200 Basic nodes in operation, each operator would receive (0.25 * 0.15) / 200 of each block find (150 Zel per block, 2 minute target find time). It is possible to adjust this scale in either direction, but would only be used as a last-ditch effort to scale necessary hardware requirements, never simply to change the returns of a specific group.

This breakdown takes into consideration that higher-tier nodes require much larger collateralization of ZelCash and monthly reoccurring expenses to maintain the hardware. The reward breakdown was created to generate sustainable returns and avoid the absurd “expected ROI’s” some masternode projects have promised in the past. ZelNode ownership is not like previous projects and is not for everyone, so we urge everyone to do their own research on what operating one or multiple ZelNodes would look like for themselves.

The When

ZelNodes is planned to roll out in three phases. Phase One is currently in development and livenet is planned to be stood up January 31, 2019 on the 1 year anniversary of ZelCash’s launch. The subsequent phases are tentatively scheduled.

Phase One- ZelCore Infrastructure, network validation, and of course backbone for the ZelEx exchange. All node classes will go live on testnet, mainnet once benchmarks are in place and structure is secure.
Phase Two- Q2 of 2019 and include Zel-curated dapps.
Phase Three- Q4 2019 and include ZelDev platform integration

The Who

ZelCash has held a very firm stance on being as decentralized as possible, including being ASIC-resistant via our POW algorithm swap, and also in the distribution of ZelCash. Being POW for so long before standing up ZelNodes has allowed more people to mine and trade to accumulate, instead of selling ZelNodes for BTC at project launch. By utilizing a 3-tier node system, we hope more people that wish to participate can do so and take pride in supporting a truly decentralized and scalable computing network to show more and more people what crypto has to offer.

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Written by Zel Technologies, GmbH — 26 July 2019 — Rev. 3

<https://zel.network>
<https://zelcore.io>
<https://zelid.io>