4. ARK Public Network

4.1 The ARK Mainnet

The ARK Public Network, also known as the “ARK mainnet” came online on March 21st, 2017 [5]. At that time, 125 million ARK were created in a genesis block. The genesis delegates that initialized the network were quickly replaced by live delegates who, having been voted in by the community, began securing the network. Shortly thereafter, block rewards were initialized in the protocol to reward forging delegates each time new transactions entered the ledger. The ARK mainnet operates independently of the ARK business entity, which simply releases code that the ARK mainnet delegates choose to either accept or reject. On the 28th of November 2018, the ARK mainnet upgraded from the now deprecated V1 codebase to the newly developed V2 codebase. This introduced a multitude of improvements to the network for developers and end users [6]. ARK numbers among a very short list of teams that have developed an entire blockchain from the ground up to address real-life business needs and expectations, rather than simply forking and modifying code from another project.

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4.2 Consensus Mechanism

A 2018 technical paper titled “The Latest Gossip on Byzantine Fault Tolerant Consensus” suggested that:

“Consensus is one of the fundamental problems and driving forces of distributed computing. It is important because of its role in State Machine Replication (SMR), a generic approach for replicating data that can be modeled as a deterministic state machine. The key idea of this approach is that node replicas start in the same initial state, and then execute requests (also called transactions) in the same order; thereby guaranteeing that node replicas stay in sync with each other. The role of consensus in the SMR approach is ensuring that all replicas receive and execute transactions in the same order. [7]”

Delegated Proof of Stake or DPoS is the consensus algorithm that validates transactions on the ARK Public Network. Ensuring high performance with block times of eight seconds and maintaining global decentralization, it is the backbone of the ARK Ecosystem. Holders of ARK vote through their wallets for delegates who secure the network, insert blocks into the ledger, and create new ARK. The top 51 vote earners are named elected forging delegates. The members of this group change over time, as a much larger pool of node operators competes to draw votes by offering increased efficiencies and services to voters. Each ARK held represents one vote, and ARK users may change their vote at any time. ARK’s unique configuration solves problems of centralization that occur when there are too few validator nodes on the network, or when delegate groups assert dominance over the network via multivoting.

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4.3 ARK Inflation Mechanics

Every eight seconds, two new ARK are created and awarded to the delegate that forged that block. Each block is forged by one of the top 51 delegates in a round that lasts 408 seconds. Delegates are selected randomly for each round to protect the network from targeted attacks. If a delegate is prepared when it is their turn, a new block is forged and two ARK awarded. If a delegate is not ready to forge on their turn, it results in a missed block and two new ARK cannot be created. Uptime is therefore incentivized. Barring missed blocks, the network has the capability to generate 7,884,000 ARK per year. This steady generation of a fixed amount of ARK means that the annual inflation rate steadily declines towards zero with each passing year. This is predictable and programmatically controlled, unlike fiat inflation [56].

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4.4 Balancing Decentralization and Performance

Too few nodes on a decentralized network creates more centralization. Conversely, too many nodes can impact network performance. Bitcoin’s slow block times, for example, allow for a very large number of nodes to reach consensus without much struggle. By fixing the number of forging nodes at 51, the ARK mainnet strikes a balance between decentralization and performance. These forgers work in concert with what are known as relay nodes, which also maintain copies of the ledger and act as the contact points for lite clients.

Aside from node distribution, responsibility for decentralization is also assigned to ARK holders in the form of voting power. Each ARK wallet can execute a special transaction that assigns the weight of the ARK in that wallet to a delegate. This process does not transfer ownership of the ARK in the wallet to the delegate - it simply acts as a quantifiable show of support from the ARK holder that the delegate deserves to be in a top 51 position. The votes are tallied on the network and are used to rank delegates to determine who should be allowed to forge new ARK and secure the network.

If a delegate begins to act erratically or dishonestly, voters can transfer their votes (voting weight) to a different delegate or even to a node that aspires to a top 51 ranking. This creates a dynamic environment where the nodes who have the power to secure the network are in constant flux, as community opinion shifts and new delegates enter the space.

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4.5 Preventing Collusion

Some DPoS architectures allow for multivoting [57]. This means that a wallet with 1000 coins can assign its ‘1000 vote weight’ to multiple delegates at once. This leaves open the possibility that a group might collude by using social engineering to disincentivize holders from voting for anyone other than a select group of delegates. In such a situation, one delegate group could potentially secure power and permanence on the network. ARK blocks such collusion at the protocol level. Any ARK holder wishing to vote for multiple delegates would need to divide their ARK among multiple addresses, each voting for a different delegate. This would in turn reduce the voting weight per delegate, and obscure the ownership of wallets.

4.6 Delegate Services

A delegate’s role first and foremost is to secure the network. To gain community support however, delegates must also differentiate themselves. In addition to running nodes and securing the network, ARK mainnet delegates often pledge to offer various services including development and testing, public resources and tools utilizing the ARK mainnet, faucets, bounty programs, outreach, art, games, media creation, events, research, and more. In this dynamic landscape, ARK holders and delegates collaborate to determine the future direction of the network and to create a sustainable ecosystem. The important and measurable benefits of this collaboration transfer to any community using ARK technology for their blockchain.

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