Highlights

• Flow aims to be the blockchain foundation for the next generation of game, app, and digital asset developers. It’s designed to scale using multi-role architecture.
• Dapper Labs—the company behind Flow—is partnering with the NBA, Dr. Seuss and UFC. The innovative NBA Top Shot app is currently in beta.
• Flow’s innovations include multi-role architecture, resource-oriented programming, developer ergonomics (upgradeable smart contracts, built-in logging support, a lightweight development emulator), easy consumer onboarding, and storage deposits.
• The protocol’s design features four participation node types that perform discrete tasks validating transactions, and one Full Node type (“Access Nodes”)
• There’s no slashing at launch, but it will be enabled in the future
• Bison Trails is uniquely positioned to support customer participation needs. We are the only infrastructure provider to run and offer all node types, giving our customers flexibility to change the node type they run in order to optimize participation and rewards independent of changing inflation rates.
• Anyone delegating to Bison Trails' enterprise validators on Flow can split their stake equally among four types of participation nodes. This makes it easy to optimize participation and rewards independent of changing inflation rates per node type.

A Guide to Flow by Bison Trails • Navigate to a Section:

1. Introduction
2. Innovations
3. Node Types
4. How It Works
5. Token Economics
6. Slashing
7. Why Run a Node?
8. Bison Trails + Flow

Introduction to Flow

Flow is built by Dapper Labs, the company behind Cryptokitties, and it’s inspired by the scalability challenges Dapper Labs faced as Cryptokitties rose to prominence. Flow aims to be the blockchain foundation for onboarding mainstream users via the next generation of game, app, and digital asset developers. The protocol is designed to scale using multi-role architecture rather than sharding, resulting in increased speed and throughput while remaining developer-friendly and secure.

Dapper Labs’ first forays into the game and collectibles market are their partnerships with the NBA, Dr. Seuss, and the UFC. Developed on Flow, the innovative NBA Top Shot app is currently in beta. It allows NBA fans to buy digital tokens featuring photos, videos, and data from the most memorable moments of the 2019-2020 season. In the future, tokens will highlight moments from the league’s history. Similarly, the app in development with the UFC will allow fans to purchase digital versions of their favorite fighters.

The team also published plans to “sponsor the creation of an entertainment industry council for C-level executives from global IP holders, game publishers, entertainment studios, and cultural influencers. The council will help identify risks and opportunities, remove friction-points for consumer adoption, and help catalyze a healthy global entertainment ecosystem.”

Over 2,000 projects have been created on the Flow Playground, an easy way to get started with blockchain development.

“Bison Trails has extensive experience with Flow and has collaborated closely with the team to provide feedback on infrastructure requirements, operational costs, economics, and timelines. Flow’s innovative multi-role architecture, resource-oriented programming, developer ergonomics, easy consumer onboarding, resource pricing, and storage deposits will be an asset to the industry at large.” —Joe Lallouz, CEO of Bison Trails

Flow’s Innovations

There are six key innovation on Flow:

1. Multi-role architecture: The consensus process is separate from the compute process on Flow, with four node types splitting the work of maintaining, securing, and progressing the chain. This architecture allows more people to participate in the network as several types of participation nodes require less intensive hardware than running your average participation node resulting in lower costs for participation than other PoS networks. In addition, specialized work results in more and faster transactions and block production.
2. Resource-oriented programming: Flow’s smart contracts are written in Cadence, a language designed for safety and usability. It is intended to be easier and safer than other programming languages for smart contracts and digital assets. In general, Cadence aims to be simpler to learn and audit than other languages.
3. Developer ergonomics: Flow incorporates several novel features to increase the efficiency, ease, and usefulness of their working environment.
   - Upgradeable smart contracts: In order to allow developers the opportunity to tweak and amend their code, smart contracts can be deployed to mainnet in their “beta state.” Users are made aware that the code is unfinished. When the authors complete their code, they can relinquish control of the contract and it can no longer be changed.
   - The Flow Emulator: A lightweight development server simulates the Flow Blockchain to allow developers to build and test apps without running nodes or deploying on testnet/mainnet.
4. Consumer onboarding: Flow’s design is focused on enabling ease-of-use for onboarding non-technical consumers to the world of blockchain. Safe and low-friction on-ramps will be easily accessible for developers; modular smart contract functionality allows for automated processes and sophisticated authorization controls. Apps and wallets can provide clear messaging to consumers about what effect a transaction will have. Transactions are written in a way so that they describe assertions about the state before and after the execution of the transaction so that a user can be sure, at time of submission, that they are spending what they intend to.
5. Blockchain resource pricing: Fees are low and predictable to provide consistency for dapps and their users. A base inclusion fee is collected for any transaction on the blockchain, no matter the effect on the execution state. This fee should be sufficient to cover most transactions. A computation fee may be added to larger transactions based on the variable load created when executing the operation.
6. Storage deposit: Flow accounts require a deposit of FLOW tokens upon creation to pay for the storage of the assets contained in those accounts. This deposit covers 10kb of storage for the account, in perpetuity, ensuring a user's state is never purged from the system (a fate suffered by some as many networks implement solutions for management of growing state).

Multi-Role Architecture and the Four Participation Node Types

In order to increase throughput speed, Flow created a multi-role architecture for the network. Using four different types of participation nodes—with one additional type, Access Nodes, which are comparable to a light client—Flow separates non-deterministic (“subjective”) processes, such as determining the presence and order of transactions in the blockchain, from deterministic (“objective”) ones, such as computing the result of those ordered transactions once it has been determined. Non-deterministic tasks require coordination while deterministic ones have a single, objectively-correct outcome.

Nodes for Non-Deterministic Processes

• Collection Nodes are placed in cooperating Clusters by the protocol to collectively manage the transaction pool and collect valid transactions to propose to Consensus Nodes.
• Consensus Nodes form and propose blocks using the HotStuff consensus algorithm to create a globally consistent chain of blocks. They have minimal bandwidth and computation requirements, which makes it easier for anyone to participate in consensus.

Nodes for Deterministic Processes

• Execution Nodes execute transactions and maintain the Execution State, a cryptographically-verifiable data store for all user accounts and smart contract states. They also respond to queries related to the Execution State. This work requires the Execution Nodes to be most resource-intensive on the network. It is also the key reason Flow can improve its scale and efficiency without sharding.
  
  Because of the significant hardware requirements to run these nodes, they are the least accessible option for participating as a Validator. However, with relatively few Execution Nodes doing the work, the rewards per node are expected to be high.
• Verification Nodes confirm the work done by Execution Nodes is correct. Although each individual Verification Node only checks a small amount of the total computation, collectively the nodes check every computation several times in parallel.

Each type of node performs a discrete task in the validation process for each transaction. To allow this approach to work, Flow uses a new cryptographic technique called Specialized Proofs of Confidential Knowledge (SPoCKs) to address the Verifier’s Dilemma. Without revealing anything confidential, SPoCKs allows provers to show they have access to the same information. Each prover has its own specialized SPoCK which can not be copied or forged. Requiring each prover to have a SPoCK ensures that each node does its own check rather than copying other nodes results or blindly following their lead.

How Flow Works

A transaction on Flow is submitted to a Collection Node which is part of a Cluster. The node validates the transaction which then joins other transactions in a Collection. A super majority of the nodes in the Cluster must sign the Collection in order to send the Consensus Nodes a Collection Guarantee. This guarantee includes a hash derived from the contents of the transactions, the Cluster’s ID, the count of transactions in the Cluster, and the signatures. The transactions themselves remain stored on the Collection Nodes who must respond to queries from Execution Nodes. Rewards are only received by nodes that sign collections.

Consensus Nodes form blocks containing the Collection Guarantees after confirming that a super majority signed the Collection. Once the blocks are on the chain, Execution Nodes contact the Collector Nodes for the full contents of the Collection. Once the transactions are received, the Execution Nodes runs them and issues an Execution Receipt. At this point, the nodes have done the necessary computational work to determine the new state of the chain. These receipts are also included in new blocks by the Consensus Nodes. When this new block is finalized, the Verification Nodes begin their work of confirming all the independent pieces of the execution work contained in the block are correct.

To verify the work, the information on the block is divided into chunks that represent certain computation performed between two milestones. This chunk is assigned to a set of Verification Nodes which contact the Execution Nodes for the data that matches their chunk. If the node confirms the computation for that chunk is correct, it issues a Result Approval to the Consensus nodes. If there is an error, a Faulty Computation Challenge is issued.

Once the Consensus nodes receive enough Result Approvals on all chunks from an Execution Receipt, the Consensus Node includes a Result Seal for the receipt in the next new block. At least ⅔ of the Verification Nodes assigned to a chunk must issue Result Approvals for a Result Seal to be included. If one or more chunks do not receive a Result Seal, the Consensus Nodes trigger Full Check Mode for those chunks. All Verification Nodes then check the chunks in question. Two-thirds of all Verification Nodes must issue Result Approvals to seal the result. Full Check Mode is also used in the case of two or more Execution Receipts being provided for the same block.

Once a result is sealed, the associated transactions are finalized and changes are immutable.

Flow’s Token Economics

Flow has a fixed inflation rate (although it is higher during the initial bootstrapping phase); network participants will earn 3.75% inflation per year, derived from new token issuance and transaction fees. As transaction fees rise, the rate of new issuance will decrease. If transaction fees rise above the inflation rate, the additional earnings are held in escrow to offset future inflation. This process minimizes new issuance while guaranteeing a healthy inflation and reward rate for participants.

With a 3.75% inflation rate, the reward rate is expected to be 11.36% per year. There will also be an initial 3 month "bootstrapping" period at launch where the rewards rate will be significantly elevated (expected to be around 29%).

All four participation node types (Collection, Consensus, Execution, and Validator) are rewarded for their work on the chain. In order to maintain a balance between node types, the protocol does not reward all node types equally. A balancing system incentivizes the most secure distribution of node types by changing the reward rates for each type.

If a node type is overrepresented (e.g. Consensus nodes have 60% of the stake) then the inflation rate received by that node category will decrease and the inflation received by underrepresented node categories will increase. This adjustment parameter is called a reward coefficient.

The reward coefficient will not be live at launch.Before this time, the Flow team will distribute nodes to keep the ratio at the ideal state. For example, if only 40% of tokens are staked to Consensus nodes, the Flow team will stake the necessary tokens to those nodes to get the ration to 51.8%.

The Flow foundation will delegate to partner nodes to ensure they remain in the active set for up to 2 years or until the time the staking requirement for the node equals the validator’s holdings. If, at the end of 2 years, the holdings still don’t match what is needed, Flow governance will vote if the Foundation’s delegation should remain with that validator or go to a new entrant.

Slashing Risk on Flow

On Flow, only severe infractions, which undermine the safety of the network, can lead to “slashing.” Unlike other protocols, Flow does not slash stake for performance related problems, with the exception of a very specific Collection Node downtime error. If too many Collection Nodes are down simultaneously, the protocol will assume this act was intentional and will slash the nodes exhibiting that behaviour. However, a single node going down for a short time would not result in slashing. Slashing will not be enforced at network launch and is unlikely to be enabled for the first year.

Why Run a Node?

• Running a node helps the network function properly and remain secure. It is a critical step to maintaining the network state we all share.
• The inflation rate—and therefore reward rate—is significantly higher for the first three months after Flow launches, so running a node on day one allows you to optimize participation in the network.
• Flow offers a variety of participation options through the four node types which offers a great opportunity to get involved with one of the “lighter” nodes if you’re just getting started.

"The Bison Trails team really sets the standard for professional node operation. Their team is reliable and committed, and goes beyond technical excellence to build communication and understanding in the wider community." -Dieter Shirley, Chief Architect for Flow

Why Run Flow Nodes with Bison Trails?

• Given the reward coefficient, node operators will want flexibility to change the node type they run in order to optimize their participation on the network. Bison Trails is the only infrastructure provider that supports all Flow node types and can accomodate that desired flexibility.
• Customers that delegate to Bison Trails community nodes can split their stake equally among our four participation nodes, allowing them to maximize their participation on the network.
• Bison Trails collaborates closely with the Flow team to provide feedback on infrastructure requirements, operational costs, economics, and timelines.
• We are the world’s premier multi-cloud, multi-region infrastructure provider specializing in permissionless participatory networks
• We designed an intuitive user experience that is surprisingly simple given the complexity of the underlying technology. Our platform’s automatic node management workflow reduces the challenges of manually managing active network participation, while keeping our customers in full control of their infrastructure.
• We provide 24/7 monitoring and support to keep your infrastructure safe with best-in-class security architecture.

Contact Us

Contact us to learn more about running Flow nodes on the Bison Trails platform or about any of our enterprise offerings.

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Bison Trails: Pioneering Blockchain Infrastructure®

Bison Trails is an Infrastructure-as-a-Service company, based in New York City, specifically focused on blockchain participation. We’ve built a platform for anyone who wants to participate in new chains effortlessly (e.g. by running Cosmos Validators, Tezos Bakers, and Libra Validators, etc.)—without having to invest time and resources into developing any of the engineering, protocol, dev ops, or security competencies in-house. Our goal is for the entire blockchain ecosystem to flourish by providing robust infrastructure for the pioneers of tomorrow.

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