What is Saga?

Saga is an innovative Layer 1 infrastructure designed to simplify the development and deployment of Web3 applications. Through automated dedicated chain deployment and a shared security model, Saga can scale on-chain resources according to application needs, significantly reducing development and operational costs.

Saga’s architecture supports the large-scale parallel operation of dedicated chains (Chainlets) through standardized cross-chain virtual machines and validator orchestration tools. These Chainlets can be independently configured according to the specific needs of applications while sharing the security of the Saga mainnet, ensuring network stability and interoperability. Compared with traditional Layer 1 solutions, Saga provides a more efficient and cost-effective way to promote the development of the blockchain ecosystem.

Moreover, Saga’s shared security mechanism and automated deployment pipeline greatly simplify the developer workflow, making the launch of dedicated chains as simple as deploying smart contracts. Its architecture based on the Cosmos ecosystem allows developers to utilize the IBC protocol for cross-chain communication and pay transaction fees through flexible token mechanisms. This design of Saga provides strong technical support for decentralized applications (such as games, NFT platforms, and decentralized finance).

Through Saga, developers and users can run their applications in a highly scalable and interoperable network without worrying about the complexity of the underlying infrastructure. This innovative design lays the foundation for the large-scale adoption of Web3 applications.

Saga’s Key Advantages

Saga’s key advantage lies in its significantly simplifying the deployment process for decentralized application chains (dApps). Through an automated Chainlet launch process, developers are freed from complex steps such as creating staking tokens, designing economic models, and managing validators. A single on-chain transaction is required, significantly lowering the technical threshold and development costs. At the same time, Saga provides a shared security model, allowing all Chainlets to enjoy the high security and stability of the Saga mainnet while being independently configured, ensuring scalability and interoperability.

In implementing decentralized networks, Saga is gradually transitioning from foundation-managed validators to a fully decentralized model supported by third-party communities. This process is accelerated through fast state synchronization and a modular service provider stack, allowing more validators to join the ecosystem at a lower cost. In addition, Saga’s innovative architecture supports liquidity sharing between chains and introduces a Liquidity Integration Layer (LIL), providing dApps with powerful cross-chain asset capabilities and further driving ecosystem expansion.

With a user-friendly development interface and continuously optimized infrastructure, Saga simplifies complex on-chain operations into a one-click experience while continuously promoting validator efficiency improvements and service expansion. With these advantages, Saga provides strong technical support for the large-scale adoption of decentralized application chains, becoming the preferred platform for Web3 developers to build the future.

Saga’s Technical Details

Saga’s technical advantage lies in its provision of an innovative Chainlet architecture, allowing developers to achieve horizontal scaling by manually “sharding” various workflows into multiple Chainlets. Taking an Automated Market Maker (AMM) smart contract similar to Uniswap as an example, deploying it to a dedicated application Chainlet can significantly improve scalability. When the demands of smart contracts exceed the limits of current blockchain technology, developers can deploy multiple instances of the same smart contract for specific activity subsets. In the AMM example, developers can deploy a smart contract instance for each asset pair. The Chainlet architecture makes scalability virtually unlimited, as long as these Chainlets can be adequately secured.

One challenge in deploying Cosmos-based application-specific chains is ensuring chain security. Each application chain needs to gather validators, allocate staking tokens, and design a token mechanism that helps ensure chain security. Saga eliminates this hurdle through shared security. Each Saga Chainlet is secured by the Saga mainnet’s validators, utilizing shared security.

Saga’s shared security model is similar to the Interchain Staking of the Cosmos Hub v1 version and employs an “optimistic coordination” model to ensure the security of each Chainlet. This specifically includes the following:

• Each Saga mainnet validator needs to validate each configured Chainlet.
• Validators reach a consensus on the Chainlet’s Service Level Agreement (SLA), including timely deployment, guaranteed computing power, minimum uptime, honest consensus participation, and cross-chain communication forwarding.
• Auditors monitor the Chainlets and raise governance cases when validators fail to fulfill service commitments.
• The Saga mainnet enforces any consequences for validators who violate the SLA.

Official Diagram (Source: Saga Documentation)

Through optimistic coordination, Chainlets automatically inherit the security of the Saga mainnet. To make Chainlet configuration as simple as possible, Saga provides a set of tools to help validators achieve Chainlet orchestration and management.

Another technical advantage of Saga is its fully automated smart contract deployment and Chainlet configuration process. With thousands of independent Chainlets running simultaneously, Saga validators need to be able to automatically manage thousands of independent binaries and ensure the supply of required resources to maintain their operation. To this end, Saga will develop validator orchestration tools to simplify the Chainlet deployment, scheduling, release, installation, and upgrade processes. These tools include:

• Automatically starting new binaries and server environments required for each Chainlet.
• Automatically scheduling the execution of binaries based on the Chainlet’s subscribed Service Level Agreement (SLA).
• Supporting the deployment of new Chainlets on multiple computing resources.
• Providing monitoring tools to ensure that validators have sufficient resources to configure new Chainlets.

For validators, one of the most challenging tasks is predicting the hardware required to meet the utilization needs of all Chainlet applications. On the one hand, excessive computing resources will waste resources; on the other hand, insufficient resources may lead to staking penalties due to computing resources not meeting SLA requirements. Therefore, Saga’s validator orchestration tools will help validators predict when new hardware resources are needed.

Splitting applications into one or more Chainlets means that achieving composability on Saga will be more difficult. Validators must pass Inter-Blockchain Communication (IBC) messages between any two Chainlets, including the Saga mainnet. Since all Chainlets are co-deployed in each validator’s data center, Saga’s IBC performance will be improved. However, more tools and development work are needed to make the IBC user experience seamless.

Saga’s token mechanism is highly dependent on seamless cross-chain composability. Manually transferring assets between Chainlets and other Cosmos chains via IBC is a poor end-user experience. Saga aims to enable seamless asset transfer between blockchains without requiring end-users to manually initiate IBC transactions. In addition to creating validator orchestration tools for IBC, Saga will work with the broader Cosmos ecosystem to enhance functionality, automate, and simplify the IBC user experience.

Team, Funding, and Roadmap

Saga’s team consists of a group of cross-domain experts dedicated to promoting the innovation and application of blockchain technology. Co-founder Rebecca Liao has extensive experience in global trade and supply chain finance, having served as COO of Skuchain and received the World Economic Forum’s 2019 Technology Pioneer Award. Jin Kwon, another co-founder of Saga, aims to make application chains easier for developers to use and previously held an executive position at Tendermint. Jacob McDorman is responsible for the company’s technical direction as CTO of Saga. Bogdan Alexandrescu, as VP of Engineering, leads the Saga engineering team and has extensive experience in blockchain and fintech.

In addition, the Saga team also includes several leading figures in digital marketing, marketing communications, and strategic management. Micah Kulish, as Head of Digital Marketing, previously served as Director of Digital Marketing at 100 Thieves and provided strategic marketing support for several global brands. Kyle Walker has eight years of experience in the cryptocurrency field and has provided successful marketing services for Ripple Labs, Solana, and Chainlink Labs. Alana Dowden has more than ten years of experience in business operations and strategy, having held important positions at companies such as HBO Max and BrightDrop.

Saga’s technical team is equally strong. Brian Luk is the founding engineer of Saga and previously worked at Tendermint, contributing to the development of the Cosmos SDK and Tendermint. Roman Kollar and Ashish Chandra serve as Senior Blockchain Infrastructure Engineers, focusing on blockchain protocol and infrastructure construction. Konstantin Munichev is a Golang developer specializing in distributed systems and blockchain technology. Emanuel Mazzilli, as a Senior Software Engineer, has worked at companies such as Robinhood and Facebook and has a strong background in blockchain and cryptography.

On May 19, 2022, Saga completed a seed round of funding, raising $6.5 million with a company valuation of $130 million. Investors in this round included Maven11, Samsung Next, GSR, Hypersphere Ventures, LongHash Ventures, Figment Capital, Polygon Labs, Beam, Tess Ventures, Chorus One, Crit Ventures, Hustle Fund, Unanimous Capital, Akash Network, nfr, Strangelove, XPLA, Jae Kwon, Nick Tomaino, Zaki Manian, Bo Du, Alex Shin, Garrette Furo, and Peter Kim.

On November 20, 2023, Saga completed an extended seed round of funding, raising $5 million. Investors included Placeholder, LongHash Ventures, Dispersion Capital, Red Beard Ventures, Com2Us, AVID3, and Tykhe Block Ventures.

Saga’s roadmap is divided into three main phases:

1. Andromeda (Q3 2022)
   The Andromeda phase included the launch of the Chain Launcher Developer Tool, allowing developers to deploy and manage cloud infrastructure, EVM Chainlets, and interact with these chains through EVM development tools. Andromeda Sub-Release 1 was completed in October 2022, improving the user onboarding experience, supporting custom EC2 and AWS configurations, and fixing several bugs.

1. Cassiopeia (Q1 2023)
   In the Cassiopeia phase, Saga launched infrastructure construction, including the Saga control chain and controlled Saga validator nodes. Cassiopeia Sub-Release 1 and 2 further enhanced functionality and improved system stability and scalability.

1. Pegasus (Q4 2023 - 2024)
   The Pegasus phase includes the launch of an incentivized testnet and plans to begin Mainnet Phase 1 in Q2 2024, launching secure chains and holding a token generation event (TGE). Subsequent phases will enable cross-chain validation, with Chainlets beginning to inherit the security of the platform chain, ultimately completing Saga Protocol V1. Mainnet V2 is expected to be released in the second half of 2024, bringing more features and performance improvements, including Sub-Release 1.

Token Economics

Saga’s token economics is divided into two parts: front-end and back-end, designed to enhance value accumulation and usability for developers and partner chains through innovative mechanisms.

Front-End: User to Developer

The front-end section describes the token flow between users and developers. In traditional smart contract platforms, network fees are usually paid by end-users, which limits the possibility for developers to innovate business models. Saga’s front-end model abstracts network fees from users, with developers responsible for paying these fees. Developers are free to choose payment methods, whether using external tokens (such as stablecoins), Saga tokens, or tokens created by the developers themselves. In addition, developers can profit through subscription services, advertising, etc., and even choose to let users use the application for free and monetize it through other means. To prevent malicious users from abusing resources, developers can implement methods such as whitelists, stake-based transaction priority, and transaction limits to prevent spam transactions and sequencing issues.

Back-End: Developer to Saga Mainnet

The back-end section is about the token flow between developers and the Saga mainnet. Developers need to pre-pay for deploying Chainlets, which is similar to subscribing to Amazon EC2 instances. Developers subscribe to Chainlets by paying Saga tokens as a fee deposit. The fee will vary depending on the selected computing power and subscription period. Initially, developers can obtain a free quota similar to a trial account for building testnets or experimental chains. As Chainlets are used, developers need to maintain sufficient token balance to pay subscription fees. To avoid the existence of invalid chains, Saga periodically deducts the deposit through the protocol and suspends services when the balance is insufficient, ensuring effective use of resources.

Token Economics Diagram (Source: Saga Medium)

Saga’s total supply is 1 billion tokens, with the following distribution:

Core Contributors (20%)
This portion of tokens is allocated to the OG Saganauts, who are the core team and played a key role in driving Saga’s development. This portion of tokens will undergo a 3-year vesting period, with a 1-year cliff starting from TGE. Unallocated or undistributed tokens will remain in the foundation until allocation.

Fundraising (20%)
These tokens are allocated to investors who support Saga’s vision. Currently, 15% of the tokens have been distributed, and the remaining 5% will be used for future fundraising rounds. Similar to the core contributor allocation, these tokens will also undergo a 3-year vesting period with a 1-year cliff starting from TGE, and the unallocated portion will remain in the foundation until allocation.

Ecosystem and Development (30%)
This portion of tokens is used to promote the expansion of the Saga ecosystem after launch, including funding communities and developers to promote the growth and improvement of the Saga experience.

Foundation Reserve (10%)
These tokens are reserved for the foundation for purposes other than fundraising, development, and ecosystem expansion.

Airdrop (20%)
This portion of tokens is used to reward builders, holders, stakers, and ordinary users who actively contribute to the construction of the Saga ecosystem. 20% of the tokens will be distributed in multiple tranches:

• 4.5% (45 million tokens) has been allocated for the Genesis airdrop, of which 15 million tokens have been claimed and distributed at TGE, and the unclaimed portion will be distributed in future airdrop events.
• 4.5% (45 million tokens) was distributed through Binance Launchpool at TGE.
• 11% of the tokens will be distributed through multiple retrospective airdrop events.

This token distribution model ensures Saga’s long-term development and encourages community and developer participation in ecosystem building.

Currently, Saga’s market capitalization is approximately $165 million, with a fully diluted valuation of $1.608 billion and a 24-hour trading volume of approximately $43.25 million.

Conclusion

Saga demonstrates potential with its unique token economics and flexible developer support. Its front-end and back-end token flow mechanisms allow developers to explore new business models, supporting diversified revenue streams such as advertising and subscriptions. In addition, Saga’s Chainlet architecture and decentralized governance model provide users with a customized experience while ensuring the platform’s scalability and security.

However, Saga also faces challenges. While the innovative token mechanism can attract developers and users, how to balance token incentives and developer needs remains a test. The project’s long-term success depends on effectively expanding the ecosystem, attracting more applications and developers, and ensuring the platform’s continued growth.

Overall, Saga, with its technical advantages and market positioning, has the potential to stand out in the blockchain field but needs optimization in implementation and ecosystem building.