DEVELOPMENT
LLet’s cover the FLOW blockchain: what kind of network it is, what are the results for 2022, and development plans for 2023.
ABOUT FLOW
What is FLOW
FLOW is a decentralized, fast and developer-friendly blockchain designed to accelerate the growth of a new class of apps, games and digital collectibles. Every feature of the platform has been designed from the ground up to deliver exceptional experiences at the mass level. Originally developed by Dapper Labs, FLOW is supported and built by an active community of brands and developers.
The overall look of the FLOW ecosystem looks like this:
Details on all projects can be viewed here
The numbers for 2022
Top projects in FLOW by number of users: Joyride Games, NBA Top Shot, NFL ALL DAY.
Top NFT collections by sales: NBA Top Shot, NFL ALL DAY, UFC Strike.
The 2022 results for FLOW:
- 17.5 million accounts created on FLOW: up 4.9 times from last year
- 300 million transactions to date: up 3.5 times year-over-year
- 25 million NFT transactions of all time: highest among ANY networks
In addition, games accounted for 44.4% of all network activity – more than 30 games were created. Of these games, Solitaire Blitz and Trickshot Blitz stand out with a peak of 44,000 and 31.8 unique active wallets (dUAW) per day.
NFT Market: BloctoBay surpassed NBA Top Shot as the most dominant NFT market, accounting for 64.5% of total trading volume.
Partnerships
Important partnerships were announced with Ticketmaster, Mattel and Meta*, and the FLOW ecosystem launched a $725 million fund to further innovate and grow their platform and Web3 as a whole.
* Ticketmaster, a leading ticketing and event management company, announced a partnership with FLOW on August 31, 2022 to explore the use of NFT in the ticketing industry.
Meta Platforms announced on Aug. 5, 2022, an international expansion of its digital collectibles featured on its Instagram platform. As part of this expansion, Meta announced support for NFTs created on the FLOW blockchain, enabling the creation of unique and verifiable digital assets on its platform.
TVL
The current TVL FLOW is $6.2 million, which is the peak in history.
The only Defi project is Increment Finance.
FLOW performance
Looking at annual performance, we can see that FLOW protocol activity has been trending downward since February 2022, reaching its lowest point in June.
Starting in July, FLOW activity increased sharply due to the launch of decentralized gaming applications such as Solitaire Blitz and Trickshot Blitz , and peaked in September.
Subsequently, following an industry trend, online activity declined.
It is worth noting that in the first half of 2022, NFT activity on FLOW was quite high, and in the second half of the year, games became the dominant activity on the protocol.
Overall, looking at the dominance in activity, we can see that NFT activity is 55% of total activity, games activity is 44.4%, and DeFi activity is only 0.6%.
FLOW’s 2022 trading volume accounted for 2.7% of NFT’s total trading volume for the year. This put FLOW in third place behind Ethereum with 83.9% dominance ($19.6 billion) and Solana with 7.9% ($1.57 billion).
How much was invested
According to known information, about $612 million were invested in FLOW.
Current capitalization is $1.11 billion.
Total capitalization is $1.5 billion.
There are 73% of tokens in circulation.
The current FLOW price is $1.07. The price has fallen 97.5% from the highs.
What is the FLOW token
The FLOW token plays a central role in the FLOW ecosystem.
It is used to pay for services within decentralized applications (dApps) created on the network, as well as to enable the use (deployment and creation) of smart contracts for FLOW-created applications.
As a Proof-of-Stake (PoS) blockchain, FLOW relies on its token as a reward asset for validators who participate in network consensus.
In addition, FLOW is used to pay transaction fees on the network and is used as a backup asset for secondary tokens such as the FUSD Stablecoin, and to ensure fair network management and ecosystem development.
FLOW development activity
Among the largest ecosystems (Polkadot, Ethereum, Cosmos, Aptos, Chia, NEAR), FLOW is holding steady at Chia, ranking fourth for the past year.
Meanwhile, the development level held third place (at ATOM level) for 8 months (out of 12) and then moved down to fourth group place (to CHIA, NEAR, APTOS level).
Development activity – shows the project’s development activity over time based on a number of purely development-related “events” in the project’s publicly accessible Github repository. (does not take into account: release comments, forks, stars, etc.).
How FLOW works
In traditional blockchains, each node/validator stores the full state (wallet balance, smart contract codes, transaction fees, etc.) and performs all transaction processing activities in the network.
The FLOW network uses pipeline processing, grouping validator tasks into four different roles: consensus/agreement, execution, verification, and collection.
The division of tasks between nodes is vertical (by different validation steps for each transaction) rather than horizontal (by different transactions, as with segmentation).
This allows FLOW to scale several times better at minimal cost, creating a collaborative working environment for all network operations.
From a database perspective, smart contracts and consumer accounts on the FLOW network can always interact normally within a single transaction (completeness in one transaction). This ensures a great user experience and full compatibility, allowing developers to seamlessly leverage each other’s work.
Most blockchain scalability solutions offer blockchain fragmentation into interconnected blockchains or segments (like NEAR).
With segmentation, the interaction between protocols becomes so complex that even individual large-scale use cases turn to complex methods of scaling between segments because of latency issues and higher transaction failure rates.
This radically limits the types of possible uses of the blockchain and their impact on the blockchain.
Thus, segmentation outsources the hardest part of blockchain scaling to application developers, rather than solving it at the protocol level.
The basic insight that gave rise to the FLOW architecture is that it is possible to separate nondeterministic actions from deterministic ones and allocate each to different nodes based on their technical capabilities. This greatly improves network throughput and solves many of the problems associated with consumer and developer interactions with traditional blockchains.
Non-deterministic tasks, such as establishing the presence and order of transactions, require a synchronized consensus mechanism (e.g., Proof-of-Stake).
Deterministic tasks, such as calculating the results of ordered transactions, often have one actually correct result.
FLOW has found that the main scalability problem of the blockchain is the deterministic act of executing transactions after adding to a block, rather than the nondeterministic process that requires consensus – block creation.
As such, FLOW distributes the validator task into four main roles:
- Consensus nodes: determine the presence and order of each transaction.
- Execution nodes: perform the computation associated with each transaction.
- Validation nodes: maintain part of the security of the network, ensuring that the execution nodes work properly.
- Collection nodes: facilitate increased network connectivity and data availability for projects on the FLOW blockchain by collecting transaction data from user agents.
Consensus and validation nodes act as the foundation for security in the FLOW blockchain and use crypto-economic incentives to hold the entire ecosystem accountable.
Consensus and validation roles are optimized to provide a high level of participation, even for people with consumer-grade hardware running on a home Internet connection. Consensus nodes use HotStuff consensus, one of the most proven betting proof algorithms.
On the other hand, the execution and collection nodes perform deterministic tasks, which makes them less vulnerable to attack. Their roles are also confirmed and accounted for by other nodes. Thus, execution and collection nodes can reliably improve security and scalability by allowing the blockchain to scale.
Flowchart of the four types of FLOW nodes:
- Consensus nodes determine the order and availability of transactions in the network.
- Validation nodes work with consensus nodes to improve platform security. Validation nodes also help maintain transaction integrity.
- Execution nodes are needed to properly perform computations on the blockchain.
- Finally, collection nodes are responsible for strengthening network connectivity and making dApp data more accessible so that dApps can use the data to execute smart contracts and other related processes.
Features of FLOW
FLOW incorporates four key features to realize its vision of creating blockchain-based entertainment and investment for millions of users:
- Multi-role architecture: a uniquely scalable blockchain infrastructure with an emphasis on decentralization without separation.
- Resource-centric programming. Using the Cadence programming language, you can securely and easily create easily verifiable cryptographic applications.
- Ergonomics for developers: including easily updated smart contracts and logging support.
- Consumer Adaptation. Blockchain FLOW, designed for mass adoption, enables seamless adaptation of new users and easy conversions of fiat currency to cryptocurrency.
Let’s look at these features in a little more detail.
Multi-role architecture
FLOW’s technical design utilizes the use of nodes that perform four parallel roles, allowing the platform to receive extremely high throughput and transaction security without significantly sacrificing decentralization or limiting application development.
This layered approach allows the network to scale exponentially because it separates nondeterministic processes, such as consensus building, from deterministic processes, such as computation execution.
Resource-Oriented Programming
FLOW has developed Cadence, an example of a new form of programming language called resource-based* programming.
* The MOVE language also uses resource-based programming. A key feature of MOVE is the ability to define custom resource types. Resource types are used to encode secure digital assets with extensive programming capabilities. The same approach is used in the Cadence language.
The Cadence programming language is “the first ergonomic, resource-oriented smart contract programming language. It allows developers to easily share resources and create sophisticated smart contract solutions that are secure and scalable.
In addition, Cadence provides developers with all the tools they need to bring enterprise-grade products to market quickly and efficiently. What’s more, this is achieved with minimal risk because smart contracts created with Cadence are simple and inexpensive to audit.
Cadence offers a higher level of decentralization when it comes to storing data (e.g., digital assets). Unlike Solidity, which stores information in a central ledger, Cadence stores data directly in user accounts.
Cadence’s decentralized data storage enhances the security of FLOW’s network architecture. The feature also offers developers and end users an easier way to create and transfer digital assets on the FLOW blockchain.
Focusing on developers
FLOW offers updatable smart contracts, a wide range of developer tools, built-in logging support, and fast deterministic completeness, all aimed at improving the ergonomics and usefulness of development. In addition, the platform uses Go and JavaScript-based software development kits (SDKs), its own integrated development environment (IDE), and a browser-based development playground that allows developers to familiarize themselves with Cadence before building their own applications.
Tools for developers
The FLOW team has provided a number of open-source tools to help developers get started:
The Go SDK is a great tool for developers who need server-side integration with scalability in mind. Go is one of the most popular server-side programming languages when performance is a top priority.
JavaScript SDK – For interface developers, the JavaScript SDK will allow easy integration and interaction with FLOW.
Interact with FLOW and use the Cadence language initially in Visual Studio Code. You can statically check Cadence code for errors and test smart contracts without leaving the integrated development environment.
A browser-based development environment in which you can learn and try out the Cadence smart contract language without any customization.
Fast, deterministic completeness
Bitcoin defines completeness as six block confirmations that can take more than an hour to complete. Ethereum improves on this by reaching probabilistic completeness in about six minutes.
In FLOW, deterministic completeness is achieved within seconds: once consensus nodes determine which block the transaction will be part of, user agents can in most cases execute the transaction locally and give feedback to the user almost immediately.
Consumer Adaptation
FLOW is built with user-friendliness in mind through the integration of existing core payment systems for users, allowing for secure and easy interaction with customers.
Specifically, this is realized by providing readable security for dApps and wallets so that users understand the decisions they make in the systems they use.
Smart Account technology also allows users to use Dapper Wallet without having to memorize complex source phrases or risk the possibility of losing their private keys when managing their NFTs or digital assets.
Outcomes 2022
Protocol performance improvements
In 2022, the FLOW network’s TPS throughput increased 10-fold from 50 TPS to 500 TPS with several performance improvements across the board.
Laying the foundation for hyper-scale networking to petabytes of NAS
FLOW will eventually support petabytes of data on the network without segmentation, a feat not achieved by any L1.
The latest update aims to achieve this goal:
- Petabyte storage on the network,
- Optimistic concurrent transaction execution.
Completing a transaction 20% faster
FLOW has switched to using the new Jolteon consensus protocol, which is a significantly improved derivative of HotStuff. This new consensus protocol will cause consensus nodes to complete blocks 33% faster.
Jolteon achieves this speedup by completing blocks with only two child blocks, as opposed to requiring 3 child blocks, in the original HotStuff, which directly results in block finalization 33% faster.
For the transaction to be included in the final block, measured as the time to transaction completion, there is some additional time delay associated with the features of FLOW.
Consequently, the new implementation will reduce the time to transaction completion by about 20%.
Developer development and productivity
There are several ways to measure developer activity: network activity, library downloads, and decentralized applications.
In 2022, 7,000 new developers deployed contracts on the test network (a 250% year-over-year increase), and the FLOW client library was downloaded 630,000 times (2x the 2021 figure).
Cumulatively, 2,430 core network contracts were deployed in 2022 alone!
Developer grants were introduced in 2022. FLOW received 90 grant proposals, accepted 35 proposals, approved 69 milestones, and paid grantees $677,000 in FLOW tokens.
Cadence Language
In 2022, more than 40 features were implemented in the Cadence language. More than 30 changes were also introduced that improved Cadence performance and made a major contribution to improving transaction speed and memory utilization.
The most important milestone achieved in 2022 was Secure Cadence, which allowed contracts to be deployed without permission.
The Cadence team also created tools to help the community scan its contracts and detect critical changes.
Improved spam protection with early account verification
FLOW adds spam protection to the network against accounts that send transactions they can’t pay for. Previously, if a transaction was sent with insufficient funds to pay the fee, it would execute and then fail at the end of the execution during fee withholding, wasting resources.
Now the payer balance is checked before the transaction is executed, protecting the survivability of the blockchain from such spam attacks and helping FLOW get closer to the 99.99% SLA goal.
Plans for 2023
Performance improvements
FLOW wants to achieve performance of 1,000 transactions per second (TPS).
Communication between networks using LayerZero integration
The LayerZero bridge will provide a seamless transfer of assets between FLOW and the blockchain world.
Today, connecting between blockchains can be a costly, unreliable and insecure process, requiring users to pay for gas in both the source and target blockchain. Wrapped tokens need to be replaced with their own assets, adding extra steps (and transaction fees) to the user flow. Liquidity pools in interconnected decentralized financial applications are fragmented.
Addressing these problems requires a protocol that enables interaction and linking between blockchains, while opening up new areas of design and capability in cryptocurrencies. FLOW decided to use LayerZero for interconnectivity.
Roadmap
Progressive user adaptation
For most new users, crypto now resembles the wild west. There are many situations where they do not know how to interact, and they lack trust and security in the services they are trying to use.
While self-storage may be the most important feature of web3, the next billion blockchain users do not yet have self-storage wallets.
FLOW will give developers the tools to enable them to adopt the use of blockchain without a wallet.
This means attracting new users through email or social media accounts.
Mobile First: Web3 in Every Pocket
Creating a mobile-optimized web3 experience is difficult, but mobile devices account for more than 60% of Internet traffic.
For apps that use non-castodial wallets to log in/register or sign transactions, users have to switch between wallet and app for frequent authentication requests.
While it may make sense to interrupt a user’s session to request a signature for a financial transaction, many network events must occur without user intervention. Thus, for mobile to be successful, it must be seamless to the signing processes.
FLOW will provide tools where developers don’t have to choose between app design, security and mobility.
The user will not need to have a wallet in FLOW to start using the blockchain. NEAR is following the same path with regard to Apple devices.
Service-free, decentralized applications
The old way of creating software: you rent several instances of virtual computers from AWS and install your own boot image on them, which has the services you need. There is a server/platform dependency on AWS.
“Serverless” way: you write your API services and compute engines on a services platform such as Amazon Lambda. Instead of creating a series of duplicate machine images, each of which can serve thousands of clients, you create jobs, each of which serves a single client. And from that point on, it scales based on load, but there is still platform dependency.
The “no-service” method (using blockchain): you write your API services and computing mechanisms as a series of smart contracts, transactions, scripts, and client code. Smart contracts and transactions run on the blockchain, scripts run on access nodes, and client code runs in the browser/client application. AWS and others, are not involved in any way.
Conclusion
For 2022, blockchain FLOW has tried to keep a constant level of development, roughly on par with Chia and NEAR.
FLOW strives to create the most user and developer-friendly ecosystem possible. In this, they are similar to NEAR. NEAR, meanwhile, solves scalability problems through blockchain segmentation.
FLOW has found another way: without segmenting or merging transactions (like L2 on Ethereum), they can achieve the scaling they need.
It should be understood that NEAR is aiming for 100,000 TPS, while FLOW just went from 50 to 500 and wants to achieve 1,000 TPS in 2023.
As such, FLOW has no developed Defi, no big games, no sharpened payment system.
FLOW is needed for the NFT!
So META, Mattel (toys) and other companies, are partnering with FLOW to release NFT.
The NFT boom isn’t here yet, it’s ahead of us!
