1. Project Introduction

Saga is a leading Layer1 protocol and developer ecosystem focusing on Web3 gaming.

By providing an integrated stack of Chainlets that are automated, high-performing, gas fee-free, interoperable, and customizable, the Saga protocol aims to provide developers with dedicated chains that are automated, parallel, and interoperable, catering to the needs of their Web3 applications. The project utilizes shared security, cutting-edge validator orchestration, and automated deployment pipelines to standardize deployment on any type of blockchain virtual machine, making launching a dedicated chain or Chainlet as simple as deploying a smart contract. Additionally, Saga has introduced Realms technology, a technical representation of the Saga metaverse, which allows different technology stacks and IPs to deploy on the protocol and interact through dedicated, parallel, and interoperable chains. As part of the incentive testnet release, Saga is conducting an event to encourage developers, end-users, validators, and their community members to participate in launch tasks and display behaviors that contribute to the Saga ecosystem, with participants having the opportunity to receive a Saga token airdrop. Saga emphasizes the power of its community and is committed to supporting the growth of its members. On October 30, 2023, Saga announced the launch of its much-anticipated incentive testnet Pegasus, marking the beginning of several milestone events, including a Saga token airdrop and 282 Saga innovation projects. The launch of Pegasus provides more freedom to game creators to express their creativity on Saga. Saga also announced the launch of the mainnet and the initial airdrop, aimed at honoring contributors from the Cosmos, Polygon, Avalanche, and Celestia communities, who have committed to the future of AppChains. The Saga token went live alongside the Saga mainnet on April 9, 2024, with a total supply of 1 billion tokens and an initial circulating supply of 90 million tokens, representing 9% of the total supply.

2. Core Mechanism

The core mechanism of Saga is based on a Layer 1 blockchain protocol that offers unlimited horizontal scalability. This is achieved by enabling projects to launch their own Layer 1 blockchains (L1s). Here are several key features and mechanisms of the Saga protocol:

(1) AppChain Development Portal

The AppChain Development Portal is a central component of the Saga protocol, providing a one-stop solution for developers to easily deploy and manage their own dedicated blockchains, known as AppChains.

The concept of AppChains originates from the need for greater customization and scalability in the blockchain space, especially when dealing with applications that have specific functionalities or purposes.

• Definition: An AppChain is a dedicated blockchain customized for a single application or service. Compared to traditional single blockchains, AppChains offer more efficient performance, lower transaction fees, and are optimized for specific use cases.
• Objective: The Saga AppChain Development Portal aims to simplify the blockchain development process, allowing developers to focus more on their applications rather than the complexities of underlying blockchain technology.

Features:

• User-Friendly Interface: The development portal offers an intuitive and easy-to-use interface that allows developers to create and deploy AppChains in just a few steps.
• Chain Customization: Developers can customize the parameters of their AppChain, such as consensus mechanisms, block size, and transaction fee models, to suit their specific needs.
• Smart Contract Support: Similar to deploying smart contracts, developers can upload compiled smart contract binary files to the Saga mainnet. Saga’s validators automatically process and deploy the corresponding Chainlet (a dedicated chain containing the smart contract).
• VM Agnostic: Supports multiple virtual machines, including but not limited to Ethereum Virtual Machine (EVM) and Solana VM, giving developers the flexibility to choose the most suitable tech stack for their projects.

Operational Workflow:

• Design and Compile: Developers first design their applications and compile them into smart contract binary files.
• Deploy: Upload the compiled smart contract binary files to the Saga mainnet through the development portal.
• Automated Processing: Saga’s validators automatically handle the uploaded files and deploy the Chainlet containing the smart contract.
• Management and Maintenance: The development portal provides tools and interfaces for developers to manage and maintain their AppChains, including upgrading smart contracts and adjusting chain parameters.

Security and Efficiency:

• Shared Security Model: AppChains are secured through Saga’s shared pool of validators, reducing the need and cost of setting up and managing a separate validator set.
• Resource Isolation: Each AppChain runs in a separate environment, ensuring efficient resource utilization and optimized performance.

Application Scenarios:

• Customized DApps: For decentralized applications (DApps) that require high customization and optimization, AppChains provide an ideal solution.
• Enterprise Applications: Enterprises and large organizations can leverage AppChains to create dedicated blockchain solutions tailored to their specific business needs.

（2） In addition to AppChain, another unique feature of the Saga protocol is its stack-building concept known as “Chainlets”.

Chainlets are an innovative technology provided by Saga, designed to allow developers to easily deploy and manage their own dedicated blockchains to support specific applications or services. These Chainlets form the foundation of the Saga ecosystem, enabling it to offer unlimited scalability and high customization. Defining Chainlets can be seen as micro-blockchains within the Saga network. Each Chainlet is an independent chain customized to perform a specific function or service. They allow application developers to achieve high customization and optimization of their applications without sacrificing performance or security. Key Features:

• Specificity and Customization: Chainlets provide a dedicated block space for each application, allowing developers to customize the chain’s features according to the specific needs of the application, such as consensus mechanisms, transaction processing capabilities, and fee models.
• Virtual Machine (VM) Agnosticism: Chainlets support multiple virtual machine technologies, including Ethereum Virtual Machine (EVM), Solana VM, etc., offering developers flexibility in choosing their technology stack.
• Shared Security Model: Chainlets rely on Saga network’s shared validator pool to ensure security, which means that even newly created Chainlets can benefit from the overall security of the network.
• Resource Isolation: Each Chainlet operates independently, not sharing block space with other Chainlets, which reduces resource contention and enhances performance and efficiency.

How Chainlets work

Design and Deployment: Developers first design their applications and corresponding smart contracts. They then compile these smart contracts into binary files and upload them via Saga’s AppChain development portal.

Automated Chainlet Deployment: Validators in the Saga network automatically process the uploaded smart contract binary files and deploy the corresponding Chainlets. This process is similar to deploying smart contracts on traditional blockchains, but the outcome is the creation of a fully independent chain.

Operation and Management: Once a Chainlet is deployed, it begins operating independently, executing operations tailored for a specific application. Developers can manage and maintain their Chainlets through tools and interfaces provided by Saga.

Use Cases

• High-Performance DApps: For decentralized applications (DApps) that require high throughput and low latency, Chainlets provide an ideal infrastructure.

• Dedicated Services: For services that require a specific security model or a particular consensus mechanism, Chainlets can offer customized solutions.

• Gaming and Entertainment: Chainlets are particularly suitable for gaming and entertainment applications, as they can provide the high-performance operating environment and user experience required.

Through Chainlets, Saga offers developers a powerful method to create and deploy blockchains tailored to their applications, enhancing efficiency and performance while ensuring high security and scalability. This innovative technology positions Saga as an ideal choice for developers looking to launch highly customized and optimized applications in the blockchain space.

1. SAGA Tokens

SAGA tokens are the native cryptocurrency of the Saga protocol, playing a crucial role in incentivizing and governing the Saga ecosystem. They are designed to support the operation of the Saga network and to encourage developers, validators, and users to participate and contribute to the development of the ecosystem.

In early March this year, Saga announced the launch of the Saga mainnet, along with a genesis airdrop. This airdrop aimed to pay tribute to the communities of Cosmos, Polygon, Avalanche, and Celestia by rewarding their respective stakers with tokens. This was due to each project’s commitment to the future of application chains: Cosmos introduced the initial concept of application chains, Celestia contributed to data availability, Polygon enhanced the development of the Polygon Chain Development Kit (CDK), and Avalanche contributed innovations to the Avalanche subnets. Additionally, tokens were awarded to the winners of the second season of Play-to-Airdrop held from January to February 2024, as well as a concurrent developer championship. The SAGA tokens were launched alongside the Saga mainnet on April 9. The maximum supply of the token is 1 billion, with an initial circulation of 90 million tokens, accounting for 9% of the total supply. Most of these tokens are allocated to the ecosystem, developers, investors, and core contributors, who will respectively receive 30%, 20%, and 20% of the token supply.

For investors and core contributors, their allocation is subject to a one-year cliff, followed by a two-year unlocking period. The remaining distribution will continue to vest over time, with the full supply unlocking seven years after the Token Generation Event (TGE).

On April 4, Binance announced the launch of the SAGA token launch pool as the 51st project of its kind. Users who staked BNB or FDUSD in standalone pools for four days could use these pools to mine SAGA tokens before April 9. Depositors will receive their respective token allocations from a pool of 45 million SAGA tokens, representing 4.5% of the total token supply. On April 9, SAGA tokens were listed for trading on Binance.

4. Team/Funding

The Saga team boasts profound industry experience, with members hailing from the early days of the Cosmos (Tendermint) project. The team comprises prominent figures in research, engineering, and politics, providing leadership and direction to the project. They are building a robust web3 community by bringing together leading web3 projects, developers, and creators through strategic partnerships into Saga’s multiverse. To date, Saga has raised $15 million. Investors include Placeholder, Maven11, Longhash, Samsung, Com2uS, Polygon, Merit Circle, Figment, and Chorus One. Known funding rounds include three stages:

• Seed Round: Saga completed a $6.5 million seed funding round to build the next 1,000 blockchain chains. This round followed a $2 million pre-seed funding provided by Ignite Inc. (formerly known as Tendermint) later in 2021, bringing the total funds raised to $8.5 million.
• Seed Round Extension: Saga announced a $5 million seed round extension, led by venture capital firm Placeholder. This investment brought Saga’s total funding to $13.5 million.
• Binance Launchpool: Saga debuted as the 51st project on Binance Launchpool, inviting users to deposit their BNB and FDUSD tokens into separate pools to mine SAGA tokens over four days.

5. Future Development Analysis

Combining the background of the Saga team, its financing situation, and the unique nature of its blockchain protocol, we can analyze its future development potential from the following aspects:

Technological Innovation and Market Demand

Saga’s technological framework includes support for AppChains and Chainlets, Realms technology, and its agnosticism towards virtual machines. This places it at the forefront of highly customizable and scalable blockchain solutions. Particularly in the gaming and entertainment sectors, this technology can support high-performance needs and user interaction experiences. Additionally, for DeFi and other decentralized applications, Saga’s high throughput and low latency environments are highly attractive.

Strong Team and Support

The team and supporters behind Saga are experts with experience in crypto and blockchain research, engineering, and related fields. The industry knowledge and technical expertise of the team members, along with their connections and influence within the blockchain ecosystem, will help drive the adoption and development of Saga.

Capital Support

Saga has successfully completed several rounds of funding, including prominent venture capital firms like Placeholder, totaling $13.5 million. This provides financial security for its early development and expansion. This indicates that investors are confident in Saga’s business model and growth potential, a confidence that is itself a significant driver for the market acceptance of new technologies.

Market Positioning

The Saga protocol focuses on providing solutions for high-performance blockchain applications such as gaming and entertainment, which is a rapidly growing market sector. With the expanding blockchain gaming and related NFT markets, Saga, with its capability to offer customized blockchain solutions, is likely to achieve a leading position in this domain.

Community and Ecosystem Development

Saga has demonstrated its commitment to actively building its community and ecosystem through its innovator programs and other community engagement activities. With its mainnet launch imminent, expected to host over 300 innovator projects, Saga has made substantial progress in expanding its ecosystem influence. However, the future development of Saga will also face a range of opportunities and challenges, which will collectively determine the long-term success or failure of the platform.

Opportunities

Market Growth: The growth of blockchain gaming and decentralized finance (DeFi) sectors offers significant market opportunities. As these markets expand and demand increases, Saga’s AppChain and Chainlet solutions have the potential for broader adoption.

Technical Advantage: Saga’s offering of customized and scalable blockchain services, especially its Realms and Chainlets technologies, gives it a technological edge in the competitive Layer 1 solution market.

Community Building: An active community has been cultivated in Saga’s ecosystem, which will help foster user growth and application development, key factors for ensuring the platform’s success.

Strategic Partnerships: Collaborations with industry giants like Binance increase Saga’s visibility and could bring more user and investor attention.

Challenges

Competitive Pressure: The blockchain field is highly competitive, with many mature and emerging Layer 1 protocols vying for market share. Saga needs to continue innovating and offer unique value to maintain its market position.

Technical Implementation: Although innovative, the practical implementation of Saga’s technological concepts may face many challenges, including maintaining network security, scalability, and user experience.

User Adoption: Despite technological advantages, the adoption by end-users and developers is uncertain. Saga needs to establish compelling cases to attract developers to build on its platform and encourage users to engage with these applications.

Regulatory Environment: Cryptocurrencies and blockchain technology face a constantly evolving regulatory landscape. Regulatory uncertainties could negatively impact Saga’s development, especially in different global regions.

Market Volatility: The volatility of the cryptocurrency market could affect the stability of Saga tokens and the project’s funding capabilities. Market sentiment greatly influences investment and capital flow.

Overall, Saga’s success will depend on its ability to seize market growth opportunities, overcome technological and market challenges, and maintain a leading position in the evolving blockchain field. By maintaining a technological edge, expanding its user base, and adapting to regulatory changes, Saga has the potential to become a major player in the blockchain sector. However, this requires the Saga team to maintain sharp and effective execution in strategic planning, product development, and market outreach.

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