Celer Network is a high-performance Layer 2 scalability platform, which aims to realize the grand vision of bringing the scale of the Internet into the blockchain and helping the commercialization of the blockchain through the above technological innovations. It proposes new technical solutions and economic models based on traditional off-chain solutions, and the experimental simulation results of this solution show an order of magnitude performance improvement. CELR Token can be used for the mortgage of liquid capital lending anti-fraud bonds, the payment medium of payment channel registration fees, transaction fees and other possible service fees. In addition, in the first 5 years of system operation, new CELR Token will be generated through PoLC mining, while LiBA only needs to mortgage the Token, and CELR will still belong to the lender after the mortgage period. When the 5-year PoLC mining period is over, LiBA will start to consume CELR, and the consumed CELR will no longer be returned to the lender, but injected into the system as a continuous PoLC mining reward.

Project Vision

Celer Network is a unified technical and economic architecture, as well as a blockchain that uses off-chain scaling technology to scale the Internet to existing and future blockchains. It can be scaled horizontally, and is trustless, distributed, and has privacy protection. It incorporates a layered architecture with significant technical innovations at each layer. In addition, Celer Network also advocates a principled off-chain encryption economic design to balance its scalability. Celer Network's mission is to unleash the full power of the blockchain and innovate how distributed applications are built and used.

Project Highlights

Off-chain scaling technology allows smart contract interactions between parties who do not trust each other off-chain instead of on-chain. The participating parties jointly maintain and each copy a multi-signature off-chain state machine that cannot be tampered with, and only resort to on-chain consensus when absolutely necessary (such as multiple parties unable to reach a consensus). Off-chain scaling is the only way to achieve distributed applications (dApps) that can scale horizontally and protect privacy while ensuring the trustless and decentralized nature of the blockchain. It is a turning point for the large-scale popularization of blockchain technology and will become the engine and cornerstone of all scalable dApps.

Application scenario

Celer Network's encrypted economic mechanism - cEconomy, is designed based on a basic principle: a good encrypted economic model (token model) should provide additional value and can introduce new dynamic games, otherwise it will Not as good, or not useful. Any off-chain solution to the scalability problem, however, is a trade-off, and would not be adopted without a crypto-economics that would enable new dynamics to balance these trade-offs.
A new compromise
Everything comes at a price. Off-chain platforms gain scalability by making the following tradeoffs.
Off-chain Scalability vs Liquidity
The off-chain operating network first achieves scalability by sacrificing the liquidity of the on-chain network, which is especially important for potential off-chain service providers It is challenging because a large amount of liquidity is required to provide efficient state channel services. However, large holders of encrypted assets may have no commercial interest or technical ability to build a state channel service infrastructure. People with the ability to build reliable and scalable state channel services usually do not have such a large amount of funds deposited in channels or fraud proof bond contracts. This mismatch presents a huge barrier to the development of technologies that operate in large numbers off-chain.
Off-chain scalability vs usability
While off-chain scaling doesn't compromise the trustless nature of blockchains in any way, it does sacrifice usability. Each state channel or off-chain contract is associated with a time limit, and when a party remains offline for a long time and exceeds a certain time limit, the relevant party will be in danger, or lose the current state.
Therefore, we need an incentive mechanism to provide sufficient liquidity to help those entities capable of running a reliable and scalable off-chain service infrastructure ensure that off-chain state is always available for possible on-chain disputes.
New Encrypted Economy
To complete the off-chain expansion solution, we have introduced a set of encrypted economic mechanisms called cEconomy, through Celer Network protocol token (CELR) and three Tightly coupled components to provide network effects, stable liquidity and high availability, and indispensable value.
Proof of Liquidity Commitment (PoLC)
PoLC is a virtual "mining" process to obtain rich and stable liquidity for the off-chain ecosystem. Anyone who wants to participate can get rewards by locking his idle liquidity for a period of time.
Liquidity Backed Auction (LiBA)
LiBA off-chain state channel service providers are able to obtain liquidity through "crowdsourced loans" at a negotiated interest rate. Lenders are prioritized based on points called “happiness scores” determined by the desired interest rate, the amount of liquidity provided, and the number of CELR tokens. Lenders with more CELR tokens (as an indicator of their past contribution to the ecosystem) have higher priority.
State Guardian Network (SGN)
SGN is a special and rigorous side chain that guards the user's state when the user is offline, so that the user's state is always available for dispute cases. State Guardians need to lock their CELR into SGN to qualify as Guardians and earn service fees.

Technical Overview

As a comprehensive platform that can be built on existing or future blockchains, Celer Network includes a clear layered architecture that separates complex off-chain platforms into hierarchical modules. This architecture greatly reduces the complexity of system design, development, and maintenance so that each component can easily iterate and adapt to change.
A well-designed layered architecture should have open interfaces, encouraging different implementations on each layer as long as they support the same cross-layer interface. Each layer only needs to focus on implementing its own functionality. Inspired by the successful layered design of the Internet, Celer Network adopts an off-chain technology stack that can be built on different blockchains, named cStack, which consists of the following layers, arranged in bottom-up order:
cChannel: Generalized State Channel and Sidechain Suite
cRoute: Optimal Value Transfer Routing
cOS: Development Framework and Runtime Environment for Off-Chain Applications
Celer architecture provides innovative solutions for all layers. Below we detail the technical challenges and key features of cChannel, cRoute, and cOS.
cChannel
This layer is the layer closest to the underlying blockchain, which directly interacts with the basic public chain, and within a limited time, it is the upper layer with a common abstract structure Provides real-time status updates. cChannel uses state channel and sidechain technology, which are the cornerstones of the off-chain scaling platform.
The state channel allows parties who do not trust each other to quickly reach an agreement with the latest agreed state on the off-chain program, and guarantee its tamper-proof security through the creditor's rights contract on the chain. This concept was originally introduced by the Lightning Network to support high-throughput off-chain Bitcoin microtransactions. Since the Lightning Network idea was proposed, there have been several research works addressing different problems in the context of payment channel networks, such as routing algorithms, time-lock optimization. However, off-chain networks are still in their early stages of development and face some significant challenges in terms of their modularity, flexibility, and cost-effectiveness. cChannel addresses current challenges by creating a series of new features.
Generalized off-chain state transfer. Off-chain transfers can be arbitrary state transfers that depend on the DAG. This enables Celer Network to support complex high-performance offline dApps, such as games, online auctions, insurance, market predictions, and decentralized exchanges.
Flexible and efficient value transfer. Provides a variety of state channel and side chain structures, various efficiencies and non-tamperable trade-off strategies to support fast value transfer with common conditions, minimize on-chain interactions, and minimize capital lock-up.
Pure off-chain contracts. Any contract that is not directly related to on-chain deposits does not require any on-chain operations or initializations unless disputed by them. Each purely off-chain contract or object has a uniquely identifiable off-chain address, which is only deployed on the blockchain when needed, and the on-chain address is assigned by the built-in off-chain address translator.
cRoute
Celer Network is a highly scalable dApps platform, and providing value transfer that supports high throughput on the platform is one of its most important promises. Off-chain value transfer is a fundamental requirement for many off-chain applications. While Celer Network has a bigger vision than a payment solution, it is a breakthrough improvement to off-chain payment routing as it directly determines how much value can be transferred within the ecosystem and how fast.
All existing off-chain payment routing can be attributed to the traditional "shortest path routing" algorithm, which may lead to poor performance of off-chain payment networks due to fundamental differences in link models. The link capacity of a computer network is constant and stateless (unaffected by past transmissions). However, the link capacity of the off-chain payment network is stateful (that is, determined by on-chain deposits and past payments), which leads to constant changes in the topology and link status in a highly dynamic network, which makes the traditional shortest path algorithm Convergence is difficult, resulting in low throughput, high latency, and even outages.
Celer Network's payment routing module recognizes this fundamental challenge, cRoute introduces the distributed routing balancing algorithm (DBR) using distributed congestion gradients.
Provably Best Throughput We proved that for any payment transaction request rate, if there is a routing algorithm that can support this rate, then DBR must be able to calculate this algorithm. According to our evaluation, compared to the state-of-the-art solutions, DBR achieves 15 times higher throughput and 20 times higher channel utilization.
Transparent Channel Balancing "Keeping channels balanced" has been an intuitive thing to do since the Lightning Network. However, existing attempts are to explore a large amount of on-chain or off-chain coordination to achieve a low-guaranteed balance. DBR combines the channel balancing process with routing and keeps the network balanced without any additional coordination.
Fully Decentralized The DBR algorithm is a fully decentralized algorithm where each node only needs to communicate with its neighbors in a state channel network topology. DBR also has low messaging cost in the protocol.
Failure Resilience The DBR algorithm is highly resilient to failures: it detects and adapts quickly to unresponsive nodes, supporting the maximum possible throughput on the remaining available nodes.
Privacy Preservation Due to its multipath nature, the DBR algorithm naturally preserves the privacy about the transmitted value without using any additional privacy preserving techniques (such as ZKSNARK). More importantly, the DBR algorithm can be seamlessly integrated with onion routing to protect the anonymity of the source and destination.
cOS
The dApp on the chain is just a simple front-end connected to the blockchain. Although the dApp off the chain has great potential for high scalability, it must be built on the basis of traditional public It's not easy on-chain. Celer Network introduces cOS, a development framework that makes it easy for everyone to develop, operate, and interact with scalable off-chain dApps, reducing the additional complexity that comes with off-chain scaling. Celer Network allows developers to focus more on the development of application logic and create the best user experience, while cOS handles the heavy lifting, including the following tasks:
Figure out the dependencies between arbitrary off-chain and on-chain states .
Handles off-chain state tracking, storage and disputes.
Fault tolerant and transparent to intermediate node failures.
Support multiple concurrent off-chain dApps.
Unified implementation to different on-chain and off-chain modules.

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