What is Lisk?
Lisk is a decentralized blockchain platform designed to run decentralized applications (dApps) on sidechains. In contrast to Ethereum, with which Lisk is often compared, the dApps do not run on the mainchain, but are handled via the freely programmable sidechains. Lisk therefore aims to be a platform provider with a decentralised network, such as Ethereum, NEO, EOS or Tron, but differs in many technical features from the blockchain projects mentioned above.
Lisk’s codebase comes from the Crypti project, which Lisk founders Max Kordek and Oliver Beddows previously worked on. The Crypti project collected 750 Bitcoins in 2014 to develop a blockchain application platform. After the project came to a standstill, however, the two German founders of Lisk saw the potential and decided to take over the company and found Lisk in May 2016.
The LSK token
LSK is the cryptocurrency of the platform. Sending LSK from one account to another takes about 10 seconds, after about 1-2 minutes the transaction can be considered unchangeable.
The LSK token was sold as part of an ICO from February to March 2016, with the Lisk team selling approximately 100 million LSK for approximately 14,000 Bitcoins.
Delegated Proof of Stake
To generate consensus on the mainchain, Lisk uses a simplified implementation of the original consensus algorithm of BitShares, a Delegated Proof-of-Stake (DPoS). As with BitShares, Steem, EOS or Tron, the owners of the LSK coin can vote for delegates. Contrary to a proof-of-stake consensus, the token holders cannot therefore participate directly and without further effort in the creation of new blocks (e.g. through staking pools). In the case of Lisk, LSK owners (“stakeholders”) can vote for delegates on the main chain who secure the network and take over block production. Independently of this, everyone is of course free to apply as a delegate.
The number of votes at the voting for the delegates corresponds (simply put) to the number of LSK a Lisk account has. As with EOS or Tron, there is a fixed number of delegates that is set at 101 on the Lisk Mainchain. The delegates with the most votes act as the block producers, validating the transactions and receiving a block reward in return, which many block producers share with their voters to give an incentive to re-elect. To form a block, the node assigned to the delegate inserts up to 25 transactions into a block, signs it and sends this block to the network.
Block production takes place in rounds, as is usual with a DPoS, so that there is no competition between the block producers and all 101 delegates produce one block in succession for each round. Lisk’s block time is 10 seconds, so a round at Lisk takes about 16 minutes and 50 seconds, with each block producer receiving a “Forging Reward” of 3 LSK per block and round (as of November 2018). The last “Forging Reward” reduction took place on November 01, 2018 and reduced the reward from 4 to 3 LSK (at block 7.451.520). This means that around 9.5 million LSK will be newly created and allocated to the delegates in one year.
In general, Lisk uses an inflationary reward system. In the first year the “Forging Reward” was still 5 LSK per block. Every 3.000.000 blocks, approximately after one year the reward is reduced by 1 LSK, so that after 5 years only one LSK per block is released (forever). This makes Lisk an inflationary crypto currency with no maximum supply.
Lisk: One Framework for Sidechains and One Application Platform
The Lisk App Software Development Kit (SDK) is a framework that simplifies the provision of custom sidechains and the development of blockchain applications for developers. The framework offers all necessary tools to develop a complete blockchain application (similar to an App in the App Store or Google Play Store), which can also be downloaded. For this purpose, the Lisk SDK offers four key components that can be freely designed and programmed according to your own requirements. These are:
- the consensus algorithm (e.g. DPoS)
- the sidechain (as an unchangeable database)
- the backend (the application logic)
- the frontend (the user interface of the application)
The sidechains are therefore completely independent ledgers (blockchains) that can, for example, use a different consensus algorithm than the DPoS of the mainchain. The independence from the mainchain also means that the performance and speed of the mainchain is not affected by the transactions on the sidechain. One of the major problems of blockchains, scaling to a large number of transactions, is mitigated by this, since large quantities of transactions can be carried out “off-chain”, i.e. away from the main chain.
The sidechains can either use the LSK token from the mainchain or create a completely new token for the sidechain, which the sidechain projects can then sell via an ICO or to crypto currency exchanges.
When creating its own consensus algorithm and its own token, the only central challenge for the sidechain project is that it has to find node operators who hold the sidechain securely.
According to Lisk, sidechain projects can also use the delegated proof-of-starch of the mainchain and thus enjoy the security of the 101 delegates. The idea behind this is that sidechain projects can tie in with the mainchain in order to benefit from the existing size and robustness.
A decentralized directory for applications
The basic idea of a blockchain platform designed to run distributed applications also means that the Lisk platform provides a directory for distributed applications within the Lisk ecosystem. This directory is virtually a decentralized counterpart to the centralized solutions of Apple, the Apple Store and Google, the Play Store.
All distributed applications created in the Lisk ecosystem need only be registered on the mainchain to establish a connection between the Lisk mainchain and the sidechain and for the application directory to find all blockchain applications and services.
Bottom line: Is LSK worth investing?
A key aspect for the advancement of blockchain and crypto currency adaptation is facilitating access to these new technologies for both users and developers. It is important for the end user to have a simple and intuitive user interface that relieves the user of all unnecessary tasks. For developers, it is important that entry barriers are low.
For both groups, Lisk offers an innovative solution compared to other competitors such as Ethereum, NEO or EOS. The Lisk SDK allows developers to develop completely independent sidechains and distributed applications that are complete blockchain applications with a customizable frontend, backend and consensus algorithm that can be downloaded and then used. In this respect, Lisk distinguishes itself from the abovementioned competitors, with Max Kordek himself not considering Ethereum a competitor.
A recommended source for further, more detailed information on the Lisk project is the following medium article by founder Max Kordek: https://blog.lisk.io/what-is-lisk-and-what-it-isnt-e7b6b6188211
In addition, we can recommend the following Lisk promotional video for the relaunch in February 2018:
Last updated: 05/07/2019[ratings]