A New Development Path of the Public Chain: CoinEx Smart Chain (CSC) Provides Users with More Competitive Underlying Services

On May 28, 2021, CoinEx officially released the whitepaper for the revolutionary CoinEx Smart Chain (CSC).

Back in 2013 when Vitalik Buterin, a programmer who were then fresh to the blockchain world, discovered the shortcomings of Bitcoin. He believed that a Turing Complete Programming language should be introduced to Bitcoin so that everyone could develop DApps (not just financial applications) on it. That is how the blockchain got equipped with the “smart contract”, symbolizing the start of the “Blockchain 2.0” era.

As an open-source, decentralized blockchain, Ethereum is special in the built-in smart contract, which is essentially a kind of code that binds the two parties of the contract together and can be executed by itself without an intermediary.

This feature has earned Ethereum the title of “the world’s computer” (technically known as the Ethereum Virtual Machine (EVM)). Its function, unmatched by Bitcoin, is far more than a payment method or a store of value.

The EVM environment allows developers to build DApps on it, from social media through games to banks, such as an application store beyond the control of Apple or Google.

In the eight years since the birth of Ethereum, smart contracts started from scratch, got developed, and later prospered, drawing a lot of attention. Undoubtedly, Ethereum is the most successful and widely used smart contract platform in current society.

However, seen from its current form, Ethereum has many problems.

According to the statement of Ethereum, “high demand is driving up transaction fees that make Ethereum expensive for the average user. The disk space needed to run an Ethereum client is growing at a fast rate. And the underlying proof-of-work consensus algorithm that keeps Ethereum secure and decentralized has a big environmental impact.”

In the rapid succession of various DApps, especially DeFi applications, Ethereum’s drawbacks become obvious than ever before such as low throughput, a small number of transactions and high transaction fees. In general, it is “high cost with low efficiency”.

Despite of that, Ethereum still remains the first practical and widely used smart contract platform. With regard to smart contracts, the first thing that comes to mind is Ethereum. It already has relatively mature applications, communities and toolchains, which constitute a complete ecosystem.

Many platforms developed proposals to ensure high throughput and accelerate transactions in response, but compromise decentralization more or less.

Serving as a support for high-performance transactions, CSC has been made completely compatible with EVM even in its initial model. At the same time, it applies the Proof of Stake (PoS) model so that all users, especially DeFi novices, can become a node by staking tokens without any permission, removing all the complex thresholds and ensuring 100% transparency.

CSC’s compatibility with Ethereum means that almost all DApps, ecosystem components and tools on Ethereum can be migrated to CSC directly or with only minor changes. The PoS-based consensus is more environmentally friendly, and outruns the PoW-based consensus in the respect of performance (with less block generation time and higher transaction capacity). PoS-based consensus can be flexibly managed by the community, without compromising decentralization.

In fact, the competition among exchanges has never stopped, no matter it is in platform coins, IEO or contracts. As time goes by, efforts to innovate the above products have become the norm, while the competition in public chains has come into the spotlight, which has even become another major indicator of integrity for an exchange’s ecosystem.

However, both the layout and setup of a public chain are cumbersome. Even with advantages in assets, major exchanges still need to work out a suitable path while building the underlying technology.

In the past few years, CoinEx has been working on its own public chain system, in an attempt to establish an on-chain compliance environment and regulatory framework. Committed to building an infrastructure for blockchain and the principle of decentralization and permissionless block generation, it launches CoinEx Smart Chain (CSC) to provide high-performance services for the on-chain listing of various financial assets.

CoinEx is endowed with inherent advantages in the field of public chains.

First, CoinEx boasts a large user base, without worries about the cold start; second, it has more initiative in screening projects. For example, the CoinEx Chain Foundation has launched the CSC ecological support plan, inviting developers to build decentralized applications on CSC, and provided funding, technology, and other resource support for outstanding projects.

CoinEx is long-established among public chains of exchanges. Launched in November 2019, with a TPS of 4,000–10,000, the mainnet of CoinEx Chain generates blocks within seconds and confirms transactions instantly. The upgrade of CoinEx Chain to CSC that supports smart contracts comes as a response to market demands, so that investors can smoothly approach various projects and developers can deploy DApps more efficiently.

Yet every smart contract requires a new encryption protocol. But the vision of encrypted e-commerce (blockchain finance) would never come true if we had to design a new encryption protocol for each new contract. The huge market demand for smart contracts will make it far more difficult and expensive to design an encryption protocol.

It is reported that CSC was under development for the past few months, and a $100 million seed fund scheme was set up to support promising projects. With the arrival of investors, the application scale will be the key to its success. At present, the CSC testnet has been deployed and will be launched soon.

The early boom of the Ethereum ecosystem has built the momentum for the launch of CSC. As mentioned above, restricted by performance, Ethereum has long been criticized due to high gas fees and congested on-chain network. Later, BSC of Binance and HECO of Huobi that feature faster transaction processing and lower transaction fees have received much of the traffic from the Ethereum Layer 2, but they get stuck from time to time amid the market boom. This phenomenon suggests that the public chain of exchanges is far from being saturated and improved. As a result, CSC launched at the moment can fill the market shortage and satisfy investors’ demands.

In terms of performance, CSC is compatible with not only EVM but also smart contracts on ETH, BSC and HECO, which is very important. Otherwise, it could not serve the overflow of traffic from Ethereum. Such design allows developers on Ethereum to seamlessly migrate DApps to CSC, reducing the workload of developers and also attracting more projects to CSC.

According to the CSC Whitepaper, CSC generates blocks within seconds, which undoubtedly satisfies users’ demand for efficient transfers to a large extent. In terms of costs, CSC, similar to its counterparts BSC and HECO, adopts low transaction fees. It has been well received in the market as it lowers the threshold for small and medium-sized investors.

From the perspective of underlying design, CSC integrates features of both PoA and PoS and adopts PoS as its underlying consensus mechanism. CSC nodes can generate blocks without any permission, which is more decentralized. Neither BSC nor HECO networks have more than 21 nodes, while PoS-based CSC can support up to 101 block proposers, ensuring network efficiency and further decentralizing the network.

Blocks are generated by a limited number of validators. Validators of CSC will generate blocks by means of PoA in turn. In other words, they share the same probability of generating blocks, which is similar to the Clique consensus engine of Ethereum. The set of validators is selected and eliminated by on-chain governance based on staked tokens without any permission. Anyone can delegate tokens to the node he or she trusts, which is obviously more friendly to novices.

The official launch of CSC not only means a more extensive business scope and improved ecosystem for CoinEx, but also signals the arrival of a new public chain built by an exchange.

For outsiders, building public chains has long been considered as a tremendous job, and only those leading platforms such as Binance, Huobi, and OKEx can manage it. But now we see CSC in response to the wave of public chains, and its success should be owed to CoinEx’s early efforts in the DeFi field.

The past year has witnessed CoinEx’s swift and well-targeted moves in the layout on DeFi. Before CSC went live, CoinEx had quickly listed new DeFi assets, and launched its platform token CET as early as January 2018, making itself one of the most popular platforms. As DeFi gains momentum, the smart chain that carries forward CoinEx’s ambitions has finally been launched.

It’s hard to forecast the future of CoinEx Smart Chain for the moment because it is constantly evolving. CoinEx is committed to product development and service improvement, and contributes its share to the infrastructure of the blockchain world. CSC is just a small part of its development prospect.

There is one more factor behind the success of CSC: the CoinEx ecosystem that is different from and even more versatile than the Ethereum ecosystem. Ethereum is mainly engaged in the construction of the blockchain network, while CoinEx focuses on the transaction business of the platform. The DeFi public chain serves as the intersection of two parallel lines of business. Built on CoinEx, CET is endowed with an energy unmatched by other single currencies in the closed ecological loop of CoinEx as it can be applied across such a huge ecosystem covering the public chain, mining pool, and trading.

CoinEx has reached a new milestone on its path toward DeFi in the early stage of on-chain ecosystem construction. For the whole public chain market, the new competitor has blazed a new trail of innovative technology. It is the vision of CSC to “create an ecosystem where developers empower each other and make the prosperity of the CSC ecosystem benefit everyone”, and now the time comes for this new chain to show the world its governance capability.