⚛️FRIDDY LEDGER TOKEN DAG PROTOCOL

SUMMARY

The growing popularity has brought forth several key challenges with the incumbent cryptocurrency networks – high volatility, increasing transaction fees, and poor scalability. Built using the Directed Acyclic Graph (DAG) technology, Friddy Coin is a high-performance network delivering on all key challenges. Friddy, an anti-inflation stablecoin pegged to the USD, offers price stability. Friddy price increases in relation to the USD inflation, acting as an inflation hedge. In Friddy, every user has their own blockchain, called a user-chain. User-chain overcomes expensive consensus mechanisms, such as Proof-of-Work, reducing the transaction confirmation time and improving the scalability. Finally, Friddy levies zero transaction fee for all money transfer and commerce transactions. No other overheads and hidden costs. As a high-performing and low-volatile cryptocurrency, Friddy’s goal is to become the preferred global currency for online trading.

Keywords: Blockchain, cryptocurrency, DLT, transactions, DAG, block-lattice

1. INTRODUCTION

The year 2009 saw the birth of Bitcoin. Since Bitcoin many cryptocurrencies came into the market. As the popularity grows, cryptocurrencies are paving the way as a disruptive technology. Yet, there are many challenges [1] impairing the widespread use and adoption of cryptocurrencies. Even Ethereum, the next front runner after Bitcoin, is facing serious obstacles [2]. There are three key challenges facing the incumbent cryptocurrency networks.

High volatility : Cryptocurrencies must resemble established major currencies, to serve as a currency. Because of excess volatility, cryptocurrencies currently do not work as a major currency. Bitcoin, for instance, is extremely volatile and almost 10 times higher [3] than the volatility of major exchange rates (USD against EUR and yen).

Increasing transaction fees: As the transaction volume grows on the cryptocurrency network, the fees associated to process and validate the transaction skyrockets [4]. The networks force the users to make a choice between high fees for faster processing or long wait time for confirmation.

Poor scalability: At the heart of the scalability are two major challenges – block size and consensus mechanism. Each block in the blockchain network can store a limited amount of data, leading to a congestion of transactions in securing a spot. Proof of work (POW), the transaction verification process is much slower than traditional digital transactional systems [5].

Since its inception, cryptocurrencies have been a revolutionary development in electronic payment systems. Bitcoin was created as “an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party” [6]. Bitcoin advanced the cause of an electronic payment systems by creating a new class of digital currency. However, the challenges facing the incumbent networks are limiting cryptocurrencies from reaching their fullest potential.

To address the challenges facing the incumbent cryptocurrency networks, we’ll look at two key solutions Friddy Coin (USDR) leverages – Directed acyclic graphs (DAG) and Stablecoins.