What Is Syscoin (SYS)?

What Is Syscoin (SYS)?

Intermediate
Жарияланды May 18, 2022Жаңартылды Jun 8, 2022
6m

TL;DR

Syscoin is a layer-1 and layer-2 blockchain solution that combines Bitcoin’s Proof of Work (PoW) and Ethereum Virtual Machine (EVM) in a single network. It provides high scalability through its own version of EVM and other layer-2 solutions on top of a secure PoW blockchain. 

Syscoin is compatible with Ethereum-based smart contracts. Users can move or create highly secure and decentralized Web 3 applications while saving on gas fees on the Syscoin blockchain. 


Introduction

Most smart contract platforms like Ethereum face scalability challenges today. To cater to the high usage demands, sometimes they have to make compromises on the blockchain’s security and decentralization to enhance the transaction throughput. 


What is Syscoin?

Syscoin is a dual-layer blockchain that combines the strongest features of Bitcoin (BTC) and Ethereum (ETH). It is secured by Bitcoin’s Proof of Work (PoW) consensus mechanism. At the same time, it offers high scalability and smart contract capabilities through a modified version of the Ethereum Virtual Machine (EVM). Users can create highly scalable Web 3 decentralized applications (DApps) with nearly 0 fees on Syscoin.


How does Syscoin work?

Syscoin was founded in 2014 by Sebastian Schepis and built to support innovative blockchain applications in a single network. At its core, Syscoin has a dual-layer architecture made of its main blockchain and an Ethereum Virtual Machine (EVM) layer. The EVM layer is called Network-Enhanced Virtual Machine (NEVM) and provides smart contract functionality. 


Layer 1: The Syscoin blockchain

Merged mining with Bitcoin

Syscoin was created through a Bitcoin hard fork. Same as Bitcoin, Syscoin is a Proof of Work (PoW) blockchain that performs merged mining with Bitcoin. This means that miners can mine both BTC and Syscoin simultaneously at no extra cost. Bitcoin miners can also mine on Syscoin to increase their profits without having to spend extra energy. At the same time, the Syscoin blockchain can benefit from the security provided by the Bitcoin miners via PoW. Bitcoin’s massive hash power helps mitigate the risk of 51% attacks and prevents double-spending.


A masternode network with ChainLocks

There is also a masternode network on Syscoin, which provides a scalable service layer and increased security through ChainLocks. ChainLocks are created by developers from the Dash blockchain to enhance the security of PoW blockchains.

Typically, PoW miners with the longest chain get the mining right of the next block, but this selection method is prone to 51% attacks. Malicious miners with enough computational power can easily mine a chain longer and take control of the blockchain. ChainLocks changes the miner selection method by creating hundreds of masternode groups known as Long Living Masternode Quorums (LLMQs). LLMQs decide on the next block through a consensus agreement of the masternodes. They will then provide cryptographic signatures broadcast to all network participants. Once a valid ChainLock message is broadcasted, the transactions contained in the ChainLocked block are considered confirmed. As only a valid signature from the masternodes is needed to finalize a transaction, ChainLocks can improve network reliability, stability, and security.


A UTXO Token Platform powered by Z-DAG

Syscoin also has its own UTXO Token Platform. It’s a highly scalable payment channel powered by the Z-DAG Protocol, which enables users to send and receive tokens with low fees instantly.

Zero-Confirmation Directed Acyclic Graph (Z-DAG) is a transaction layer on top of the Syscoin blockchain. It has a high throughput, ranging from 30,000 to 145,000 transactions per second (TPS). Z-DAG transactions are validated by Bitcoin’s PoW miners via merged mining, but they’re completed much quicker. It uses a relay network that validates transactions using multithreading, effectively distributing workloads among available resources to speed up the process. Z-DAG can also prevent double-spending by flagging potentially questionable transactions and deferring further validation to PoW.

Users can create their own Syscoin Platform Tokens (SPTs) on the Token Platform, including NFTs and fractionalized NFTs (F-NFTs). SPTs adopt the UTXO (Unspent Transaction Outputs) storage model, a fundamental element of Bitcoin and many other cryptocurrencies. This means SPTs operate like Bitcoin transactions. They will also benefit from the technologies implemented on the Bitcoin network, such as the Lightning Network and the Taproot upgrades.

In addition, SPTs utilize Z-DAG protocol to facilitate high-speed and high-throughput transfers with low fees. Users can freely define the number of block confirmations needed for each transaction according to their needs. For example, a coffee merchant receiving payment for a cup of latte can choose to wait only a few seconds before considering the payment safe, while a cross-border business might opt for more block confirmation to ensure the trade is valid.


DAOSYS

DAOSYS is a new DAO standard developed by the Syscoin Foundation. It aims to make DAOs more decentralized and empower sovereignty by eliminating centralized treasuries. 

DAOSYS applies the Autonomous Service Engine (ASE) technology to serve as a treasury management system. Anyone can participate in a DAO without having to own governance tokens. DAOs will be able to operate more efficiently like automated market makers (AMMs). For example, they can deploy their own staking pools and issue Treasury Token to users who deposit their assets. Treasury Token holders will receive interest for providing liquidity and allocate their share of the treasury for different functions through DAOSYS.


Layer 2: NEVM

Network-Enhanced Virtual Machine (NEVM) powers the smart contract layer of Syscoin. It offers layer-1 support for EVM smart contracts. Users can migrate their DeFi projects, NFTs, or DApps from Ethereum to take advantage of Syscoin’s scalability and save on gas fees. 

NEVM is a modified version of Ethereum's EVM that runs on the Syscoin blockchain. It is designed to support scalable smart contracts and interoperability at low costs. With NEVM, Syscoin can validate transactions in parallel via zero-knowledge proofs and facilitate up to 210,000 transactions per second (TPS). The use of ZK-Rollups can also completely eliminate withdrawal delays. Typically, the Ethereum mainnet requires a waiting period of 2 weeks on finality guarantee for withdrawals, but Syscoin finality can be completed much faster with the ChainLocks mechanism. 


What is SYS?

Syscoin (SYS) is the native token of the Syscoin platform. Its tokenomics are based on Ethereum’s EIP-1559 proposal without a capped maximum supply. Prior to the NEVM mainnet release and the introduction of EIP-1559, SYS had a maximum supply of 888 million tokens. 

One of the unique features of SYS is that it has both UTXO and account-based representations of tokens. Depending on the network it’s on, SYS can exist as Syscoin Platform Tokens (SPTs) and ERC tokens. SYS holders can burn their SYS to mint SYSX as SPTs to enjoy the high transaction throughput offered by Z-DAG. They can also use the SYSX to mint an ERC-20 version of SYS via the SYSX Bridge. This ERC-20 SYS will allow users to utilize all the functionalities of NEVM, such as using smart contracts.

SYS is used for paying transaction fees within the Syscoin network, including the minting and transferring of SPTs. Typically, it only takes 1 SYS to fund thousands of SPT transfers. SYS holders with 100,000 SYS can also host masternodes to participate in the governance of the network and provide services for the blockchain to earn extra SYS rewards. 


How to buy SYS on Binance?

You can buy Syscoin (SYS) on cryptocurrency exchanges like Binance. 

1. Log in to your Binance account and click [Trade] - [Spot].

2. Search “SYS” to see the available trading pairs. We will use SYS/BUSD as an example.

3. Go to the [Spot] box and enter the amount of SYS to buy. In this example, we will use a Market order. Click [Buy SYS] and the purchased SYS will be credited to your Spot Wallet.


Closing thoughts

Syscoin combines the strengths of Bitcoin and Ethereum to implement its own custom technologies, such as NEVM and DAOSYS. With these innovative tools and a robust dual-layer structure, Syscoin could be a strong alternative for users looking to develop and interact with Web 3 applications and projects.

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