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Restructured from flat .tex/.pdf files into per-paper subdirectories. Added Antje Worring as co-author on all papers. Synced PDFs to pdfs/ for download site.
52 lines
2.5 KiB
TeX
52 lines
2.5 KiB
TeX
\section{Background}
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\label{sec:background}
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%%==========================================================================
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\subsection{Lux Appchain Architecture}
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A Lux appchain consists of:
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\begin{itemize}[leftmargin=1.5em]
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\item A subset of Primary Network validators who additionally validate the appchain;
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\item A custom virtual machine (VM) specifying the state transition function;
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\item An independent consensus instance (Beacon or custom);
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\item Optional: native gas token, custom fee structure, validator admission policy.
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\end{itemize}
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Appchains are registered on the P-Chain via a \texttt{CreateAppchain} transaction, which
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requires a one-time fee of 1 LUX (as of this writing). Validators opt into appchain
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validation via \texttt{AddAppchainValidator} transactions. Critically, appchain validators
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are not required to use LUX as their gas token; they may denominate fees in any ERC-20
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token or in the appchain's native currency.
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\subsection{Economic Primitives}
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Let $\mathcal{N}$ denote the set of Primary Network validators with staking weights
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$\{w_v\}_{v \in \mathcal{N}}$ and total stake $W = \sum_v w_v$. The annual Primary Network
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staking yield for validator $v$ is:
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\[
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y_v = \frac{\text{AnnualPrimaryReward}(v)}{w_v \cdot P_{\text{LUX}}},
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\]
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where $P_{\text{LUX}}$ is the LUX price in USD. This yield represents the \emph{opportunity
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cost} that appchain incentives must exceed to attract validators.
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\subsection{Related Work}
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Cosmos Zone economics~\cite{kwon2016cosmos} are the closest analogue: application-specific
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chains with sovereign validator sets secured by ATOM-denominated staking. Key differences
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from Lux appchains include: Cosmos chains maintain independent validator sets (no sharing),
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IBC is the interoperability layer (versus Lux's native cross-chain messaging), and ATOM
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inflation subsidizes security rather than fee revenue.
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Ethereum Layer 2 economics~\cite{konstantopoulos2021optimism} address a different
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problem---reducing mainnet congestion through off-chain execution with on-chain validity
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guarantees---but share the challenge of bootstrapping sequencer economics without
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centralization.
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Polkadot parachain auctions~\cite{wood2016polkadot} provide an interesting comparison:
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parachains bid for relay-chain security through DOT bond auctions, creating a market-driven
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mechanism for security allocation. LRP appchains instead pay validators directly, which is
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more flexible but requires more explicit incentive design.
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%%==========================================================================
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