Ankr Network Whitepaper

Tuesday, June 11, 2019
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A Brief Introduction 01 to Ankr As technology continues to advance, so too does the concept of cloud computing, also known as on-demand computer system resources. What began only as mainframes, on-site data centers, and private clouds has evolved into something entirely different: public clouds. Today, companies are reducing costs and speeding up deployment with the help of public clouds and global cloud service providers (CSP’s) like Amazon AWS, Microsoft Azure, and even Alibaba. But with so many companies relying on CSP, the power of old-school data centers is being underutilized. Every year, an increasing amount of idle computing power goes unused, untouched–left over. That’s where Ankr comes in. Ankr believes idle cloud computing power should not go to waste. In fact, at Ankr, we believe idle cloud computing power could replace the need for large CSPs altogether. With Ankr’s technology, companies can utilize excess cloud computing power from data centers and edge devices that are not being used to their full potential. As if the idea of recycling computing power wasn’t interesting enough, there is much more to be excited about when it comes to Ankr. First, as trends such as Internet of Things (IoT) technology continue to grow, the need for highly- distributed infrastructure, service, and intelligence increases. With Ankr’s ability to repurpose unused cloud computing power from on-site data centers and devices around the world, companies can meet this need by implementing a truly distributed system when it comes to hosting, computing, control, and information. Such a distributed system provides loss avoidance, improves production, and mitigates risk when organizing data and analytics. On the flip side, Ankr also provides a slew of benefits for owners of unused cloud computing power. Now, consumers and enterprises can monetize their surplus computing power, whether in the form of a device, an on-prem data center, private cloud, or even public cloud. With the introduction of Ankr, establishing an operational architecture that utilizes distributed computing power becomes easy. Use Ankr to create a production environment that leverages people, processes, and technology in a scalable manner and without getting stuck in a vendor contract. Even enterprise operations that need their legacy systems to fit into a larger framework can use Ankr via virtualized hosts, data management, and open API tools to guarantee a production environment that will stand the test of time. At Ankr, our solution of a shared, repurposed cloud economy is based on cloud-native and blockchain technology, providing us with abstraction over various types of hardware, operating systems, and unified user interfaces. We define the organizational structure of each participating device based on its condition, taking into consideration aspects like location, bandwidth, CPU, memory, and more. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 03

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Edge Node Design In our blockchain network, there are three types of nodes, including: Seed Peer: Generates new blocks, and is deployed in Ankr Hub. Persistent Peer: Synchronize blockchain, and is deployed in data center. Access Peer (or Ankr Miner): Access Persistent Peer and report the workload. Ankr Miner also provides computing services as an additional edge computing node to the data center. Since the mining equipment is also used for resource sharing and calculation, the graphics card mining machines with CPU, disk, and memory are selected to deploy. With the ever-growing development of 5G technology, the modern network has much higher bandwidth and much lower latency. This allows for the implementation of a variety of real-time coordination applications using Ankr Miner, such as IoT, machine learning, distributed storage systems, and VR/AR. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 10

03 Ankr DCCN Blockchain Ankr’s shared cloud economy uses blockchain for metering, international micro-payments, and smart-contract-based service level agreements (SLA). To keep track of all of these moving parts, all usage data and transaction data are recorded in the blocks. This allows organizations to easily verify their records, prevent backtracking and manipulation, and establish a user account reputation system. Ankr blockchain is a public chain aimed at DCCNs. The blockchain’s network is multi-layered, expandable, and freely organizable. The Ankr blockchain also features a smart contract system, which supports multiple programming languages such as C/C++, JavaScript, Rust, Python, and more. Blockchain Network Structure Ankr | A Shared Cloud Economy Driven by Idle Processing Power 11

Ankr’s blockchain network is divided into four layers: 1. Core Layer: This is the core consensus layer. Here, all nodes are full nodes on the layer. The consensus calculation this layer uses is the Proof of Service Level and Stake Byzantine Fault Tolerance (SLSBFT), which defines the service quality of bandwidth, computation, and storing in the distributed cloud computing service market. Within this layer, blocks will be produced until a consensus is reached by the Block Producer (BP) nodes. From the user's point of view, the core layer consists of validator nodes and regular nodes. The validator nodes are currently being approved by Ankr DCCN, and will be voted on by the community in the future. The regular nodes are open to the public. 2. Relay Layer: The relay layer is for fast network routing. All nodes in this layer are also full nodes, but they will not produce blocks or take part in the consensus. Users have the ability to add a better network on top of the layer, and they can earn an ANKR coin reward based on proof of a network contribution (PNC). The PNC calculation is based on the node’s relayed packet number, network steadiness, network bandwidth, and the node’s quality of service. 3. Access Layer: The access layer contains data center nodes, mining nodes, and edge computing nodes. All of these are light nodes and can control illegal node access. 4. Micro-Node Layer: The micro-node layer contains device nodes and some transaction hashes. If a micro-node needs to retrieve network proof, it will ask the access-layer node. If the access-layer node can’t provide a proof, the request will pass through the relay layer to the core layer. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 12

The provider of the network, the computation, and the store will provide proof periodically to the access layer. The access layer will then verify the proof, and the result will be passed to the core layer. If the proofs are verified, the resource provider’s service level will be increased, which in turn increases the probability that the provider will be elected as a BP node. Using supernetting technology, Ankr’s blockchain network can aggregate the idle network and produce more bandwidth, thus providing better service. To do this, a supernetwork IP is formed by routing two or more networks into a larger network. The new routing prefix for the combined network represents each constituent network as a single routing table entry. This process is often referred to as “supernetting,” but is also known as “prefix aggregation,” “route aggregation,” or “route summarization.” Expandable and Freely Organizable Network The Ankr blockchain network imports distributed sloppy hash tables based on the traditional Kademlia DHT. The node can retrieve physical neighbor nodes, allowing packets to be transmitted faster and more nodes to join the Ankr blockchain network. Ankr has also expanded network organization by using the tag model, in which nodes with the same tag are clustered into the network organization. High Security Using a Proof of Work (POW) node ID generation calculation, Ankr’s blockchain network avoids Eclipse and Sybil attacks. The blockchain network also avoids hostile routing attacks by using disjoint path-finding algorithms. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 13

Consensus Ankr’s blockchain consensus is called Proof of Service Level and Stake Byzantine Fault Tolerance (SLSBFT). For verification, the consensus also has three phrases: 1. Propose 2. Prevote 3. Pre-commit Ankr’s blockchain consensus sequence can be visualized in the following diagram. The difference between SLSBFT consensus and standard BFT is the BP node election. BP node election is based on service level and stake, such that if a user has a specific ANKR token, they can take part in the BP node election. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 14

The user’s service level is calculated by the DCCN resource provider’s Quality of Service (QOS) and the resource consumer’s credit. The first step for all satisfied account nodes is to become a candidate node. For security, all of the validator nodes are randomly selected from a pool of candidate nodes. During each cycle, the proposal node is randomly selected from all validator nodes. Smart Contract The history of smart contracts begins in the 1990s, when they were first invented by computer scientist Nick Szabo. Smart contracts are “self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.” (Investopedia) Although smart contracts aren’t born from blockchain, they can provide a convenient way to automate blockchain further. Smart contracts are not only executable computer programs, but also active participants in the blockchain system. They can receive, store, and reply to received messages, as well as make the message and its value external. The diagram below is a visualization of how smart contracts work in Ankr’s blockchain. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 15

Ankr | A Shared Cloud Economy Driven by Idle Processing Power 16

Ankr’s smart contract blockchain system is characterized by the following traits: It supports multiple programming languages, such as C/C++, JavaScript, Rust, Python, and more. The virtual machine (VM) of the smart contract complies with WebAssembly 1.0. During the execution of smart contracts, Ankr’s blockchain can invoke the contracts API via a service bus. In the smart contract development tool, the responding language’s IDE plugin will be supported.Ankr’s blockchain will charge transaction fees based on the smart contract instructions. It supports the smart contract’s communication with Ankr blockchain.It supports the smart contract’s direct communication with the off chain system. For example, the DCCN’s edge node. Incorporation with DCCN The Ankr DCCN blockchain serves Ankr’s DCCN in several ways, including: It provides the payment interface for cloud users and providers.It rewards resource providers and computing users when they successfully finish their computing tasks. It rewards validators when they help maintain the blockchain and handle transactions. It provides smart contract functionality. The relay network secures communication between DCCN hub and DCCN daemon. The resource provider can provide proof to Ankr DCCN blockchain, and the Ankr DCCN blockchain can verify it. In addition, the Ankr blockchain provides APIs to DCCN services and frontends. These APIs include wallets, transactions, history, validator management, metering, and smart contracts. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 17

04 Operating Model Stakeholders and Incentive Mechanism There are four stakeholders in the circulation ecosystem. On the supply side, there are Enterprise-Grade Data Center Providers and Edge Node Owners. On the demand side, there are Infrastructure Consumers and Application End Users. These stakeholders can be defined as follows: Enterprise-Grade Data Center Providers: Ankr’s open marketplace enables providers to sell surplus cloud computing power, allowing them to monetize their depreciating assets. These providers can be colocation data centers (e.g. NTT), on-site server clusters (e.g. Intuit) and public cloud providers (e.g. Amazon Web Services, DigitalOcean). Edge Node Owners: Anyone can purchase an Ankr-manufactured edge mini-server. These edge nodes should have a DCCN hub and daemon pre-installed in order to share resources, monitor status, and earn rewards. These hardware devices must be purchased. Ankr will announce the price of these devices in the very near future. Infrastructure Consumers: Ankr’s open marketplace allows for a dynamic pricing model when it comes to infrastructure cost. This provides the market with an equilibrium to match the supply and demand. Application End Users: Users select applications through the marketplace and run APP tasks through data centers and edge nodes. Ankr’s staking mechanism ensures individuals within the ecosystem act honestly and with integrity. To do this, the Ankr provides a monetary incentive to individuals that participate in the network and have a good reputation. The risk of fraudulent behavior is highest when new, unknown providers join our network. Still, rather than requiring a centralized or federated approval process for new accounts, Ankr allows anyone to join. When a new edge node owner (miner) chooses to offer their resources to the network, they are not immediately approved. First, they must stake a meaningful value on the network in the form of ANKR tokens. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 18

There is no minimum stake amount, but participation in Ankr’s network is proportional to the provider’s stake, and is thus a fraction of the sum of all stakes. Additionally, stake contribution is factored into the provider’s reputation score. Tenants may use this score as a deployment criterion, as the score of the edge node provider will be visible. In order to promote the healthy development of the Ankr cloud computing platform and to provide customers with high-quality services, an advanced incentive mechanism is provided to all relevant participants in the ecosystem. Rewards for participants are calculated using several factors, including: Rewards for Ankr stakeholding Rewards for Ankr stake consumption (ANKR tokens) Rewards for resources and services provision Rewards for reputation Ankr Platform Revenue Model Ankr charges some percent (e.g. 5 percent) of every deal. This fee is made up of three parts: a fee paid to the resource provider, a fee paid to the Application provider, and a fee paid to Ankr. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 19

Financial Incentive to Reward Demand The demand of service are encouraged to make full use of our platform. Reward tokens are paid according to consumption history and stake-holding records. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 20

Financial Incentive to Reward Application Supply Application suppliers are encouraged to continue providing high-quality applications. Reward tokens are paid to them according to completed deals, rating score, earned fees, stake holding records, etc. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 21

Financial Incentive to Reward Resource Supply Resource providers are encouraged to provide more abundant and appropriate resources. Reward tokens are paid to them according to completed deals, reputation, earned fees, stake holding records etc. Ankr | A Shared Cloud Economy Driven by Idle Processing Power 22