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iq

iq is present on the following networks: Arbitrum, Ethereum, Polygon. Arbitrum is a Layer 2 solution on top of Ethereum that uses Optimistic Rollups to enhance scalability and reduce transaction costs. It assumes that transactions are valid by default and only verifies them if there's a challenge (optimistic): Core Components: • Sequencer: Orders transactions and creates batches for processing. • Bridge: Facilitates asset transfers between Arbitrum and Ethereum. • Fraud Proofs: Protect against invalid transactions through an interactive verification process. Verification Process: 1. Transaction Submission: Users submit transactions to the Arbitrum Sequencer, which orders and batches them. 2. State Commitment: These batches are submitted to Ethereum with a state commitment. 3. Challenge Period: Validators have a specific period to challenge the state if they suspect fraud. 4. Dispute Resolution: If a challenge occurs, the dispute is resolved through an iterative process to identify the fraudulent transaction. The final operation is executed on Ethereum to determine the correct state. 5. Rollback and Penalties: If fraud is proven, the state is rolled back, and the dishonest party is penalized. Security and Efficiency: The combination of the Sequencer, bridge, and interactive fraud proofs ensures that the system remains secure and efficient. By minimizing on-chain data and leveraging off-chain computations, Arbitrum can provide high throughput and low fees. The crypto-asset's Proof-of-Stake (PoS) consensus mechanism, introduced with The Merge in 2022, replaces mining with validator staking. Validators must stake at least 32 ETH every block a validator is randomly chosen to propose the next block. Once proposed the other validators verify the blocks integrity. The network operates on a slot and epoch system, where a new block is proposed every 12 seconds, and finalization occurs after two epochs (~12.8 minutes) using Casper-FFG. The Beacon Chain coordinates validators, while the fork-choice rule (LMD-GHOST) ensures the chain follows the heaviest accumulated validator votes. Validators earn rewards for proposing and verifying blocks, but face slashing for malicious behavior or inactivity. PoS aims to improve energy efficiency, security, and scalability, with future upgrades like Proto-Danksharding enhancing transaction efficiency. Polygon, formerly known as Matic Network, is a Layer 2 scaling solution for Ethereum that employs a hybrid consensus mechanism. Here’s a detailed explanation of how Polygon achieves consensus: Core Concepts 1. Proof of Stake (PoS): Validator Selection: Validators on the Polygon network are selected based on the number of MATIC tokens they have staked. The more tokens staked, the higher the chance of being selected to validate transactions and produce new blocks. Delegation: Token holders who do not wish to run a validator node can delegate their MATIC tokens to validators. Delegators share in the rewards earned by validators. 2. Plasma Chains: Off-Chain Scaling: Plasma is a framework for creating child chains that operate alongside the main Ethereum chain. These child chains can process transactions off-chain and submit only the final state to the Ethereum main chain, significantly increasing throughput and reducing congestion. Fraud Proofs: Plasma uses a fraud-proof mechanism to ensure the security of off-chain transactions. If a fraudulent transaction is detected, it can be challenged and reverted. Consensus Process 3. Transaction Validation: Transactions are first validated by validators who have staked MATIC tokens. These validators confirm the validity of transactions and include them in blocks. 4. Block Production: Proposing and Voting: Validators propose new blocks based on their staked tokens and participate in a voting process to reach consensus on the next block. The block with the majority of votes is added to the blockchain. Checkpointing: Polygon uses periodic checkpointing, where snapshots of the Polygon sidechain are submitted to the Ethereum main chain. This process ensures the security and finality of transactions on the Polygon network. 5. Plasma Framework: Child Chains: Transactions can be processed on child chains created using the Plasma framework. These transactions are validated off-chain and only the final state is submitted to the Ethereum main chain. Fraud Proofs: If a fraudulent transaction occurs, it can be challenged within a certain period using fraud proofs. This mechanism ensures the integrity of off-chain transactions. Security and Economic Incentives 6. Incentives for Validators: Staking Rewards: Validators earn rewards for staking MATIC tokens and participating in the consensus process. These rewards are distributed in MATIC tokens and are proportional to the amount staked and the performance of the validator. Transaction Fees: Validators also earn a portion of the transaction fees paid by users. This provides an additional financial incentive to maintain the network’s integrity and efficiency. 7. Delegation: Shared Rewards: Delegators earn a share of the rewards earned by the validators they delegate to. This encourages more token holders to participate in securing the network by choosing reliable validators. 8. Economic Security: Slashing: Validators can be penalized for malicious behavior or failure to perform their duties. This penalty, known as slashing, involves the loss of a portion of their staked tokens, ensuring that validators act in the best interest of the network.

iq is present on the following networks: Arbitrum, Ethereum, Polygon. Arbitrum One, a Layer 2 scaling solution for Ethereum, employs several incentive mechanisms to ensure the security and integrity of transactions on its network. The key mechanisms include: 1. Validators and Sequencers: o Sequencers are responsible for ordering transactions and creating batches that are processed off-chain. They play a critical role in maintaining the efficiency and throughput of the network. o Validators monitor the sequencers' actions and ensure that transactions are processed correctly. Validators verify the state transitions and ensure that no invalid transactions are included in the batches. 2. Fraud Proofs: o Assumption of Validity: Transactions processed off-chain are assumed to be valid. This allows for quick transaction finality and high throughput. o Challenge Period: There is a predefined period during which anyone can challenge the validity of a transaction by submitting a fraud proof. This mechanism acts as a deterrent against malicious behavior. o Dispute Resolution: If a challenge is raised, an interactive verification process is initiated to pinpoint the exact step where fraud occurred. If the challenge is valid, the fraudulent transaction is reverted, and the dishonest actor is penalized. 3. Economic Incentives: o Rewards for Honest Behavior: Participants in the network, such as validators and sequencers, are incentivized through rewards for performing their duties honestly and efficiently. These rewards come from transaction fees and potentially other protocol incentives. o Penalties for Malicious Behavior: Participants who engage in dishonest behavior or submit invalid transactions are penalized. This can include slashing of staked tokens or other forms of economic penalties, which serve to discourage malicious actions. Fees on the Arbitrum One Blockchain 1. Transaction Fees: o Layer 2 Fees: Users pay fees for transactions processed on the Layer 2 network. These fees are typically lower than Ethereum mainnet fees due to the reduced computational load on the main chain. o Arbitrum Transaction Fee: A fee is charged for each transaction processed by the sequencer. This fee covers the cost of processing the transaction and ensuring its inclusion in a batch. 2. L1 Data Fees: o Posting Batches to Ethereum: Periodically, the state updates from the Layer 2 transactions are posted to the Ethereum mainnet as calldata. This involves a fee, known as the L1 data fee, which accounts for the gas required to publish these state updates on Ethereum. o Cost Sharing: Because transactions are batched, the fixed costs of posting state updates to Ethereum are spread across multiple transactions, making it more cost-effective for users. The crypto-asset's PoS system secures transactions through validator incentives and economic penalties. Validators stake at least 32 ETH and earn rewards for proposing blocks, attesting to valid ones, and participating in sync committees. Rewards are paid in newly issued ETH and transaction fees. Under EIP-1559, transaction fees consist of a base fee, which is burned to reduce supply, and an optional priority fee (tip) paid to validators. Validators face slashing if they act maliciously and incur penalties for inactivity. This system aims to increase security by aligning incentives while making the crypto-asset's fee structure more predictable and deflationary during high network activity. Polygon uses a combination of Proof of Stake (PoS) and the Plasma framework to ensure network security, incentivize participation, and maintain transaction integrity. Incentive Mechanisms 1. Validators: Staking Rewards: Validators on Polygon secure the network by staking MATIC tokens. They are selected to validate transactions and produce new blocks based on the number of tokens they have staked. Validators earn rewards in the form of newly minted MATIC tokens and transaction fees for their services. Block Production: Validators are responsible for proposing and voting on new blocks. The selected validator proposes a block, and other validators verify and validate it. Validators are incentivized to act honestly and efficiently to earn rewards and avoid penalties. Checkpointing: Validators periodically submit checkpoints to the Ethereum main chain, ensuring the security and finality of transactions processed on Polygon. This provides an additional layer of security by leveraging Ethereum's robustness. 2. Delegators: Delegation: Token holders who do not wish to run a validator node can delegate their MATIC tokens to trusted validators. Delegators earn a portion of the rewards earned by the validators, incentivizing them to choose reliable and performant validators. Shared Rewards: Rewards earned by validators are shared with delegators, based on the proportion of tokens delegated. This system encourages widespread participation and enhances the network's decentralization. 3. Economic Security: Slashing: Validators can be penalized through a process called slashing if they engage in malicious behavior or fail to perform their duties correctly. This includes double-signing or going offline for extended periods. Slashing results in the loss of a portion of the staked tokens, acting as a strong deterrent against dishonest actions. Bond Requirements: Validators are required to bond a significant amount of MATIC tokens to participate in the consensus process, ensuring they have a vested interest in maintaining network security and integrity. Fees on the Polygon Blockchain 4. Transaction Fees: Low Fees: One of Polygon's main advantages is its low transaction fees compared to the Ethereum main chain. The fees are paid in MATIC tokens and are designed to be affordable to encourage high transaction throughput and user adoption. Dynamic Fees: Fees on Polygon can vary depending on network congestion and transaction complexity. However, they remain significantly lower than those on Ethereum, making Polygon an attractive option for users and developers. 5. Smart Contract Fees: Deployment and Execution Costs: Deploying and interacting with smart contracts on Polygon incurs fees based on the computational resources required. These fees are also paid in MATIC tokens and are much lower than on Ethereum, making it cost-effective for developers to build and maintain decentralized applications (dApps) on Polygon. 6. Plasma Framework: State Transfers and Withdrawals: The Plasma framework allows for off-chain processing of transactions, which are periodically batched and committed to the Ethereum main chain. Fees associated with these processes are also paid in MATIC tokens, and they help reduce the overall cost of using the network.

2024-05-31

2025-05-31

144.40311 (kWh/a)

The energy consumption of this asset is aggregated across multiple components: To determine the energy consumption of a token, the energy consumption of the network(s) arbitrum, ethereum, polygon is calculated first. For the energy consumption of the token, a fraction of the energy consumption of the network is attributed to the token, which is determined based on the activity of the crypto-asset within the network. When calculating the energy consumption, the Functionally Fungible Group Digital Token Identifier (FFG DTI) is used - if available - to determine all implementations of the asset in scope. The mappings are updated regularly, based on data of the Digital Token Identifier Foundation.