Principle and design goals

Technology implementation

Consensus mechanism

Accounts and transactions

State Channels State Channels allow micro-transactions to be handled between parties directly, off-chain; funds are committed and locked in a smart contract in advance. Then transactions occur between the parties, progressively signed by all. The final state is committed back to the chain in a way that proves all parties agree on the outcome.

Smart contract system

State channels work by allowing participants to engage in a rapid back-and-forth countersigning of updated “claims” on an escrowed amount of funds. The Bitcoin Lightning protocol was the first to popularize the idea. On EthereumVM-capable blockchains, State channels are very simple to create and implement – a smart contract holds escrowed funds, and then releases when the state channel participants request it.

Cryptography

 A Note on Threshold Cryptography
Threshold Cryptography - for instance (BLS), popularized by String Labs for their Dfinity project, holds out the promise of a truly secure random number generated by a group of participants, at least one per block. These cryptographic primitives are supported in Ethereum’s Metropolis release (and also add support for zk-Snarks) and other privacy primatives. We may update our mechanisms to incorporate this technology, but we will still rely on Fate Channels for the“instant”part of the gaming – gas costs will be prohibitive for using these RNGs more often than at the beginning and end of channel creation.

We are excited by the pace of development of the Ethereum infrastructure and are continually evaluating new features and research that could enhance our offering further.

Distributed storage protocol

Cross-chain and exchange technology

Special technology

Economic model and incentive

We encoded the rules of the Slot machine on the blockchain. Initially, we built a system in which a smart contract picks a future block to be used as the seed for a random number generator (RNG). When the appropriate block is mined, the contract uses the hash of the previously mined block, salted appropriately to generate entropy and then walks through a state machine, encoded into the smart contract. This state machine determines the position of each of the reels of the Slot machine.
As discussed, this is a bad method to get random numbers. This method has risks for operators if miners are gaming–miners can have incentive to throw away a mined block if it contains a loss, depending on a number of extrinsic and intrinsic factors.

Governance mechanism

Applications