Meet Assembly 3: Assembly as a Marketplace
Meet the Main Actors in Assembly
Assembly’s low fees offer great opportunities for new use cases and predictability in building business models on the Assembly network. You can participate in the Assembly network as an IOTA staker, ASMB holder, validator, or chain owner. Assembly will fairly distribute newly minted ASMB tokens among IOTA stakers and ASMB holders. Chain owners and validators will be rewarded for executing smart contracts and will also receive staking rewards.
Due to the underlying feeless structure of the IOTA Tangle, validators will be able to set competitively low (or even no) fees. This will make the Assembly network’s fees some of the lowest on the market. This aims to create a predictable environment for dApps, which will, in turn, guarantee that many actors, including developers, will want to participate in the network to collect fees and staking rewards. In this article, we explore the main actors in Assembly and how they work together to create a network with predictable and low fees while at the same time creating a marketplace in which trust, transparency, and stability are the main assets.
Chain owner (or governor)
Chain owners (also known as ‘governors’) run smart contract chains for business. The chain owner can be anyone – from a single individual, multi-sig holders, DAOs, the Main Assembly, or even other Smart Contract Chains – represented by smart contracts on the same or another chain.
Assembly offers chain owners the flexibility to choose in which environment they want their smart contract chain to run. Chain owners will determine the number of validators needed for the committee of validators and other parameters, such as required trust and reliability scores for any validator who wants to participate in the chain’s committee. Chain owners will also negotiate the fee and reward structure for their chain in the marketplace and will also be entitled to choose the preferred runtime (EVM, WebAssembly/wasm) and development (Solidity, Rust, TinyGo, TypeScript) environments for the smart contracts.
Additionally, the chain owners can decide if they want to allocate specific seats in their committee to particular nodes or leave it up to the Assembly contracts to ensure the chain’s reliability, trust, and security by selecting the most trustworthy nodes.
In the initial stage of Assembly, there will be four different types of smart contract chains to accommodate the different necessities of all potential chain owners.
IOTA staking is fairly new, but you will also be able to stake your IOTA tokens to the Assembly network just like on Shimmer. Because IOTA is the base layer for the Assembly protocol, you can increase the base layer’s security by staking your IOTA tokens. In turn, you will be rewarded with newly minted ASMB tokens, which you can also stake in your validator node or pledge to a validator in the Assembly network.
Although you will not be able to spend your IOTA tokens while they are staked, they will remain in your wallet. Essentially, these tokens will sit in cold storage in the IOTA Tangle without leaving your wallet, so they are not susceptible to slashing.
As part of this token distribution, 20% of the initial token supply of ASMB, or 20 billion tokens, will be distributed to IOTA stakers over two years. Once the Assembly network goes live in 2022 and governance structures are in place, ASMB token holders will be able to vote on additional incentives for IOTA token holders and the base layer.
Assembly token holders
You can use your ASMB tokens to actively participate in Assembly’s governance or stake them to validators to add to the security of Assembly and have your tokens earn more tokens. By staking your ASMB tokens to a validator, you will earn a share of any staking rewards, node fees, and rewards from chain owners that the validator may earn in that time, proportional to the number of tokens you have staked.
Staking your tokens to validators using the Staking Contract is simple. You only need to define the amount you want to stake, the period for which you’d like to stake it, and a preferred list of validators to delegate to (if any) in a special staking transaction that you send to the root contracts.
The staked funds will be locked within the staking contract and can only be moved after the staking period. Please keep in mind that, in the unlikely event that you pledge your ASMB tokens to a validator that misbehaves, Assembly may partially or entirely slash the earned staking rewards.
This encourages the creation of a competitive market in which validators will aim to gain your delegated stake by being reliable and trustworthy, as well as fostering a fair distribution of the available delegated stake and supporting smaller honest validators that would otherwise have a smaller chance of being selected.
As we’ve seen in the previous article, validators are a cornerstone of Assembly because they ensure smart contracts are performed correctly and secure the network’s infrastructure.
Anyone running one or more validator nodes under a public identity registered in Assembly is considered a validator. The validator must place a security deposit and pay a registration fee for each additional node they want to run, as well as place a minimum bond to participate in a committee of validators. Therefore, a validator cannot participate in an infinite amount of contracts. As these deposits and bonds can and will be slashed if the node misbehaves in any way, Assembly creates an environment in which any economic incentive for the node to misbehave is outweighed by the cost it entails.
In Assembly, the main incentive for validators is collecting staking rewards, node fees, and rewards from chain owners by joining a smart contract chain committee. The validator takes a service fee for the generated rewards and distributes the majority of the rewards to its stakers in proportion to their staked ASMB tokens while charging a fee for their services, which is subject to capping. This fee usually ranges from between 0 and 20%, but will ultimately be left to the open market to decide.
Because validators play such an important role in the network, Assembly has to have some way of quantifying the reliability and trustworthiness of any validator. This is where the trust score – Assembly’s reputation system – comes into play. Assembly will generate a trust score for every validator based on several factors, including the amount of staked ASMB tokens, a reliability score, and the number of correctly-performed contracts. Every time a validator produces a valid block in a chain, its trust score will increase.
On the other hand, if a validator misbehaves, their trust score will decrease and their staked ASMB tokens may be slashed (naturally, this extends to ASMB token holders who pledged their stake to the validator in question).
Assembly is a marketplace in which validators will compete to gain seats in committees of validators. They will strive to keep a high trust score so that they have greater negotiating power with chain owners. In turn, chain owners will want to make their chain's fees and rewards competitive to have the best and most reliable validators in their committee.
In the next article in our Meet Assembly series, we will showcase Assembly’s interoperability and composability.
If you’re interested in discovering more:
- Learn more about the actors in Assembly in the Assembly Wiki
- Participate in the Assembly Discord
- Build your smart contract solution with the VM of your choice using IOTA Smart Contracts
- Visit Assembly website
This is the third in a four-part series of blog posts introducing the Assembly network: you can find the other parts here:
- Meet Assembly 1: Your Key to Open and Decentralized Worlds
- Meet Assembly 2: Validators and Committees
- Meet Assembly 4: Interoperability and Composability
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