The Venom blockchain is a layer zero chain created to solve the scalability and security issues in the crypto space. It is designed as a heterogeneous multi-blockchain comprising the layer zero masterchain and layer one workchain.

It allows developers to build secure applications using its Proof-of-Stake (PoS) consensus mechanism and Byzantine Fault-tolerant (BFT) algorithm. This will enable it to achieve high performance, capable of handling 100,000 transactions per second. With such a high volume, its framework maintains a low transaction fee and a zero-emission policy.

Venom’s use cases span several industries, including decentralized governance, decentralized finance (DeFi), central bank digital currencies (CBDCs), digital identities, and gaming finance (GameFi). It also features a decentralized wallet that can be personal or multi-sig for corporations and entities.

History of the Project

The Venom blockchain is an initiative of the Venom Foundation, which was founded in 2022. In October 2022, the Venom Foundation signed a cybersecurity agreement with DGC, a global cybersecurity firm operating in the US and Abu Dhabi.

By the end of 2022, the project was licensed to operate in the Abu Dhabi Global Market (ADGM). And it launched its testnet in April 2023. That same year, it partnered with DAO Maker, a leading blockchain growth provider known for its Launchpad, aimed at incubating promising Web3 projects.

One year after the testnet launch, the Venom mainnet and its VENOM token were launched on March 18, 2024.

Core Components

Source: Venom Whitepaper

Proof of Stake (PoS)

The blockchain uses a Proof of Stake (PoS) consensus mechanism to achieve consensus among validators in the network. This is combined with a Byzantine Fault Tolerant (BFT) algorithm to agree on the block state.

To become a validator, participants need to stake funds as an incentive to secure the network. These validators take turns proposing new blocks that contain transactions and voting on the validity of blocks proposed by others. The amount of VENOM tokens staked by a validator determines the weight of its vote. So, validators holding more tokens have a greater say in the consensus process.

The BFT algorithm is an added security that ensures the network is protected against Sybil attacks. In the BFT algorithm, validators cast votes to determine whether to accept the proposed block. Blocks with a sufficient number of approvals are received and considered final.

The Sybil attacks involve a single entity creating multiple fake identities to gain control of a network by getting the majority vote. By requiring validators to stake tokens, the BFT algorithm makes it economically infeasible for such attackers to succeed.

The finality of a block also ensures that all the transactions in the block are committed to the blockchain and cannot be reversed. This helps build trust in the system, eliminating the need for third-party proof.

MasterChain

The Venom architecture consists of the layer zero masterchain, which is the foundation of the blockchain. It is the central hub that provides the needed resources for the work and shard chains and is responsible for routing messages and data between them.

The masterchain handles the network’s security infrastructure, such as the validator details, stake sizes, and election cycles. Through a stake-based system, the masterchain validators are incentivized to act honestly, and only validators with the highest stakes create new blocks.

When each shardchain has generated its blocks, the masterchain incorporates all the shard blocks into the master block. Although the master block is created seconds after the shard blocks, it ensures that all shard activities are recorded and finalized.

WorkChain

Workchains are layer-one chains built on top of the masterchain, and it inherits the security of the masterchain. At launch, the first workchain, the basechain, was created alongside the masterchain. Each subsequent workchain is a customized blockchain developed by the developers of the applications that run on it.

This allows the developers to customize the state transition function, virtual machine, cryptographic primitives, and transaction block structure parameters. This flexibility extends to economic control, allowing them to set commission fees and emission schemes for in-app economies.

This design allows the Venom blockchain to scale horizontally, improving cost efficiency and transaction execution speed. Aside from individual operations, each workchain is capable of native cross-chain communication that allows secure, trustless interactions. This enhances the interoperability capacity of the Venom blockchain.

The native cross-chain communication can be public-to-public, private-to-private, or public-to-private.

Shardchain

The Venom blockchain utilizes shardchains by distributing the workload of processing transactions and creating blocks across individual units. The sharding infrastructure allows the system to react dynamically to the workload pressure exerted on the network.

Each shard has a team of dedicated validators responsible for processing transactions. These validators operate within a specific memory space with assigned smart contracts, ensuring they only handle transactions assigned to their chain.

When the network is under strain, the network automatically triggers a split event, dividing the overloaded chain into two new ones. This workload distribution prevents any single chain from becoming a bottleneck, and validators would be assigned to the new chains.

When the load reduces, and two neighboring chains consistently operate below capacity, they can be merged back into one. This reduces costs and optimizes resource allocation. The Dynamic Sharding Protocol handles the splitting and merging of chains based on demand.

Threaded Virtual Machine (TVM)

The Threaded Virtual Machine (TVM) is a component in the Venom blockchain designed to execute smart contracts with high efficiency and scalability. It is Turing complete and capable of executing computations using the resources it has available.

The TVM uses an asynchronous communication model to improve performance. In a traditional virtual machine that uses a shared memory model for communication, programs usually experience a performance bottleneck when attempting to access stored information.

Similar to two cars trying to access the same single-lane bridge simultaneously, the process usually experiences a logjam. The TVM’s communication model doesn’t allow programs to access shared memory directly. Instead, they send messages to each other. The TVM integrates the Actor model, which allows each account to function independently. These accounts can send and receive messages, alter their state, and even create new accounts.

The TVM, combined with the blockchain’s dynamic sharding, allows the blockchain to execute multiple contracts simultaneously without waiting for other contracts’ calls.

Features of the Venom Ecosystem: Venom Wallet, Venom Bridge, Venom Pools, Venom Scan and Venom dApp Explorer

Venom Wallet

Source: Venom Website

The Venom wallet is a non-custodial, secure platform for managing assets on the Venom blockchain. It allows users to hold the keys to their assets, granting them control over their funds. Developers can also build applications that integrate DeFi functionalities.

The wallet can hold VENOM tokens and other compatible assets, allowing users to store, send, and receive. Its user-friendly interface simplifies navigating the platform and managing digital assets, making it easier for new users to onboard into the Web3 space.

Venom Bridge

Source: Venom Website

The Venom bridge acts as a gateway between different blockchains and networks, allowing the transfer of assets and data. It supports major blockchains like Polygon, Ethereum, Binance Smart Chain, and Avalanche.

The platform also supports asset swapping. It goes beyond assets to seamlessly transfer NFTs, smart contract calls, and DAO execution decisions across blockchains. Relayers facilitate these features by acting as validators and monitoring all bridging events across connected networks.

This ensures a secure and reliable flow of data and assets between various blockchain ecosystems.

Venom Pools

The Venom pool allows users and holders of the VENOM token to contribute to the project’s security. This staking feature will enable users to lock up their VENOM tokens and participate in the validation process. They support validators and earn a share of the block rewards to compensate for their contribution.

The pool rewards help foster products and tools for users and developers. This supports the Venom Foundation Developer Program, which incentivizes application development. This allows the project to leverage its vibrant developer community while utilizing its full computing capacity.

Venom Scan

The Venom scan feature is the explorer for the Venom blockchain. It provides a comprehensive view of the network’s activities and allows users to search and analyze transactions, addresses, tokens, and other activities on the blockchain.

With Venom Scan, users can access information about transactions, monitor the supply of VENOM, and view the latest smart contract interactions. It also allows developers and users to track the assets in their crypto wallets.

Venom dApp Explorer

The Venom ecosystem is a network of applications and integrations designed to improve user experience on the blockchain. Popular applications on the blockchain include the Venomm wallet, which supports Multisig accounts and Ledger hardware. VenomStake allows users to stake their VENOM tokens to earn rewards, and Venom Bridge will enable users to interact with different blockchains.

The Web3.World application is a platform for DeFi activities like swapping, providing liquidity, and yield farming. The Oasis.gallery is an NFT marketplace on Venom where users can buy and sell unique digital assets.

What is the VENOM Token?

Source: @arianlicia/venom-tokenomics-5179644aa452">Medium

The VENOM token is the native token of the Venom project used to fuel transactions and secure the network. Users who stake their VENOM to the pool contribute to network security and are rewarded for doing so.

The venom network uses the TIP-3 and TIP-4 standards. Like the ERC-20 token standard, the TIP-3 standard creates fungible tokens for transferring, holding, or burning. The TIP-4 standard creates non-fungible tokens (NFTs) on the Venom network.

The token has a maximum supply of 8 billion tokens and a total supply of 7.2 billion. Its tokenomics allocated 22% to the community, 28% to the Venom ecosystem, and 15% to the Venom Foundation. 7.5% is reserved for early backers, 7% for the development team, 10% for market liquidity, 10% for the validators, and 0.5% for the public.

Is Venom a Good Investment?

Holding the VENOM token offers a combination of utility and future potential value. The token is the native token of the blockchain, so validators use it to pay transaction fees, which incentivizes security. Users who hold and stake VENOM would have passive access to earn for their participation.

Soon, VENOM holders will play an essential role in decision-making on the platform. Their voting rights empower them to support decisions in their interest, ensuring the project’s long-term prosperity.

Risk Analysis

Advantages

The Venom blockchain’s multi-layer architecture supports scalability, security, and decentralization. This allows the blockchain to handle large amounts of transactions without failure. It is also a Turing-complete network that can host self-executing smart contracts, enhancing the transparency of web3 applications.

The Venom project also complies with regulations, having obtained its license to operate in the Abu Dhabi Global Market (ADGM). This allows the project to promote crypto adoption and interoperability, onboarding new users into the Web3 space.

Disadvantages

While the multi-layer architecture benefits scalability, it is also complicated for newer developers to understand. The token standard for the Venom network does not use the popular ERC-20 but a newer TIP-3, which can be difficult for even experienced developers to master.

Similar to the token standard, the Venom project is a new project that has yet to prove its track record. This would make it difficult for conservative users and investors to trust the network.

Challenges

While the Venom blockchain is built for scalability, the crypto space is still far from truly solving the scalability problem. Venom would have to ensure the security and stability of the network, which would force it to minimize the amount of approved validators.

It will also risk losing funds transferred from one workchain to another, limiting the project’s expansion and scaling capabilities. The cost of transactions, though low, could increase with the onboarding of more users.

Balancing the cost to remain attractive to users while ensuring the service’s sustainability will also be challenging.

Competitive analysis

Polkadot and Venom are innovative multi-layer blockchains designed to address the scalability issue of the crypto space. While both projects utilize sharing technology, Venom uses a homogeneous sharding model. Here, all shardchains share the same security model and validator set.

On the other hand, Polkadot uses a heterogeneous sharding model with a relay chain at its core. The relay chain coordinates communication and security between parachains, which are entirely independent blockchains.

Polkadot uses its parachains to achieve scalability. Each parachain can process transactions independently, reducing the relay chain’s load. Venom uses its shardchains and the dynamic sharing protocol. The network automatically adjusts the number of shardchains based on transaction volume, ensuring efficient resource allocation.

The Venom project targets developers and businesses seeking to build a scalable and user-friendly platform, while Polkadot caters to developers looking to create custom blockchains with high interoperability needs.

How Can You Own VENOM?

Users can follow a simple process to own VENOM tokens and become a part of the Venom ecosystem.

Setup a Wallet

One way to own VENOM tokens is to purchase them through an exchange. For this, the user must create a Gate.io account, complete the KYC process, and add funds to the account to buy the token.

Utilize the VENOM Tokens

Once users have acquired VENOM tokens, they can explore the Venom ecosystem by staking VENOM tokens, bridging, and participating in governance.

Take action on VENOM

Users can trade the VENOM token here.