Proposal: Bringing Steem Back to the Future with a Decentralized Sidechain for Dapps & Token Economies
Echelon - A Fully Decentralized Sidechain for Steem
📌 Summary
Since SteemEngine left the ecosystem, the Steem blockchain currently lacks a native layer for managing tokens and NFTs, which are essential for many modern decentralized applications. We propose the creation of Echelon (name is not definitive), a sidechain built to integrate seamlessly with Steem. This sidechain will focus on enabling token creation, trading, and management, with functionalities that empower users to create, swap, buy, and sell tokens (including NFTs) using custom_json operations on the Steem blockchain.
Echelon will facilitate community-driven token economies by allowing anyone to create custom tokens on the sidechain. These tokens can be used for a variety of purposes, such as rewards, governance, or NFTs, while maintaining security, scalability, and decentralization.
🎯 Objectives
The Echelon sidechain development will follow an agile and iterative approach, with features being developed and tested simultaneously. The primary objectives include:
Stable Consensus: Achieving a stable and decentralized consensus mechanism for the sidechain to ensure network reliability and security as it scales. It will include features like witness rewards and validator nodes, ensuring that all participants are incentivized to maintain network integrity. This feature is currently being tested.
Replay Mode: Implementing a replay mode for the sidechain, which will allow users to replay transactions from Steem in a secure and consistent manner, ensuring the integrity of the blockchain and providing auditable history for all token-related transactions. This feature is currently being tested.
Custom JSON Operations: Echelon will leverage Steem’s custom_json operations for interactions with the blockchain, allowing users to easily interact with Steem-based decentralized applications (dApps) through secure and fast operations. This feature is currently being tested.
Token Creation & Management: Users will have the ability to easily create custom tokens. This feature will be one of the first functionalities available, allowing for a simple and secure way for developers and users to create and manage their own tokens on the sidechain using Steem custom_json operations. This feature is currently being tested.
Token Trading & Swapping: A decentralized exchange (DEX) will support token trading and swaps, enabling users to interact with the tokens they create. Tokens will be tradable, and liquidity will be provided through pools.
Liquidity Pools: Liquidity pools will be introduced to allow users to add liquidity and earn rewards. This will be integrated early on and expanded with additional features like staking and reward distribution.
Witness Rewards & Security: A reward system for witnesses will ensure network security and decentralization. This will incentivize witnesses to participate in maintaining the consensus of the network and provide reliability for the entire ecosystem.
Public Beta Testing: We will begin public testing as soon as core features are ready. User feedback will help refine features like the token exchange UI, liquidity pools, and wallet interactions. This will ensure that we address issues early and make adjustments based on real-world usage.
💡 Sidechain Features
The Echelon sidechain will provide a robust and scalable solution for creating, managing, and interacting with custom tokens. Here are the core features:
Token Creation: Echelon will allow anyone to create their own tokens using a simple and secure interface. These tokens can be customized to fit various use cases, including rewards, governance, and utility within the ecosystem.
Token Trading: Echelon will have a decentralized exchange (DEX) where users can buy, sell, and trade tokens. The exchange will feature basic order book management, allowing limit and market orders for a smooth trading experience.
Token Swapping: A token swap functionality will be built, allowing users to quickly exchange one token for another within the Echelon ecosystem.
Liquidity Pools: Users will be able to add liquidity to various token pairs, contributing to the health of the exchange and earning rewards from trading fees.
API Endpoints: Each Echelon node will provide a complete API endpoint to facilitate data retrieval. This will allow developers to easily integrate with Steem-based decentralized applications (dApps) using the sidechain. Any observer node will also provide an endpoint (similar to Steem RPC) with custom filters.
Governance/DAO: Users will be able to vote on proposals and changes to the sidechain.
Documentation: A complete documentation about the sidechain, its features and how to use them.
💻 UI: Simple Exchange for the Sidechain
To facilitate the use of the Echelon sidechain and ensure that users can easily interact with tokens, we will build a simple decentralized exchange (DEX) as part of this proposal. The UI will be designed to resemble features found in larger DEXs, providing a familiar and seamless experience for users.
Key Features of the Exchange UI:
- Wallet Integration: Integration with Steem wallets (Steem Keychain) and third-party services like Steemlogin will be prioritized to ensure users can seamlessly interact with the sidechain using their Steem account. This will include the ability to send, receive, and store Echelon tokens (with a delay of 3-6 seconds).
- Token Management: Users will be able to create and manage and transfer tokens directly on the exchange.
- Token Trading: Users will be able to buy and sell tokens directly on the exchange with simple order book management (limit and market orders).
- Token Swap: A swap interface will allow users to exchange tokens for others within the sidechain ecosystem.
- Liquidity Pools: Users can add liquidity to pools or create their own for tokens and earn rewards from trading fees, similar to decentralized exchanges.
- Simple User Interface: A clean, intuitive design with basic charts, order history, and a smooth trading experience, inspired by major platforms.
🪙 Tokenomics
The Echelon sidechain will launch with an initial supply of 200,000,000 tokens. The distribution will be as follows:
- 80% (160,000,000 tokens): Distributed to proposal voters based on their SP holdings across multiple snapshots before launch.
- 10% (20,000,000 tokens): Allocated to liquidity to ensure proper market creation and initial liquidity on decentralized exchanges and other platforms.
- 5% (10,000,000 tokens): Reserved for development incentives for ongoing work and future development of the Echelon ecosystem.
- 5% (10,000,000 tokens): Reserved for development team incentives to reward the team for ongoing work and future development of the Echelon ecosystem.
The native Echelon token will not be mintable after launch. Inflation of the token supply will occur through specific mechanisms, including staking rewards and witness rewards, ensuring token value stability and scarcity as the ecosystem grows.
An example for witness rewards:
- Year 1: Witness rewards = 10.5 million (5.25% inflation rate of total supply)
- Year 2: Witness rewards = 10.5 million (5.25% inflation rate, same as Year 1)
- Year 3: 10.5 million will represent a smaller percentage (about 3.5% of total supply if most tokens are distributed by this point)
- Year 5: By Year 5, witness rewards will represent less than 2% of total supply.
Obviously, this might change if all witnesses decide and reach consensus to increase the rewards per block.
Development Team and Budget Justification
The development team will retain the 5% (10,000,000 tokens) initially allocated to them. This is because the development cost of Echelon is considerably lower than what external companies would charge for a similar project. We believe this allocation is necessary to ensure continued innovation and sustainability for the long-term success of the project.
This structure ensures that the development team is adequately incentivized while maintaining a sustainable and fair economy for the Echelon ecosystem.
💰 Funding Breakdown
| Category | Cost per Month (EUR) |
|---|---|
| Team (dev + testers) | 5,000 |
Salary Calculation
- Monthly salary: 5,000 EUR = 5188,75USD ≈ 6250 SBD
- Daily salary: 250 EUR = 259,44USD ≈ 312 SBD
- Total for 8 months: 40,000EUR × 1.04USD/EUR = 41,600USD ≈ 50,182 SBD
As the-gorilla detailed in his last proposal the current SBD price is lower than 1USD and we need to be cautious about the budget. So we use the same conversion price which is 1SBD = 0.83$. At any time if the amount of SBD sold everyweek is exceding the weekly USD payment amount, the rest will be transfered back to the DAO.
🔗 Cross-Chain Asset Integration (Later Development)
The Echelon sidechain is designed to support wrapped assets (BTC, ETH, etc.), but the integration of cross-chain transactions will be offered as a separate service which is not part of this proposal.
FutureShock will propose an integration service on its DEX using HTX Exchange, allowing seamless asset transfers between Echelon and external blockchains. However, this is not exclusive—other companies can also provide similar services on their DEX, ensuring a competitive and decentralized ecosystem.
🧩 SMT-Like Functionality (Later Development)
While the primary focus of Echelon will be on creating, trading, and managing tokens, we will aim to introduce features similar to Smart Media Tokens (SMTs) as a later enhancement. These features would enable:
- Staking: Echelon will eventually support token staking for additional rewards and governance participation.
- Rewards Distribution: Tokens could be distributed based on community engagement and other metrics.
This will give Steem the flexibility to evolve into a more advanced platform, allowing for broader ecosystem growth and utility.
💡 EVM Multisig Wallet Relay (Later Development)
A key feature will be the integration of a multisig wallet bridge/system to interact with EVM-compatible chains (like Ethereum). This will allow users to deploy and interact with contracts on EVM-based blockchains while leveraging Echelon's consensus. This integration will make it possible to connect Steem to any EVM chain, facilitating cross-chain functionality and increasing the interoperability of the Steem ecosystem.
🏁 Conclusion
The Echelon sidechain is designed to empower the Steem blockchain by adding support for token creation, management, and trading. Echelon will foster a thriving ecosystem for the Steem chain where users can participate in community-driven economies, create and trade tokens, and engage with decentralized applications in a scalable and secure environment.
By introducing these capabilities, Echelon will expand Steem’s functionality and bring new opportunities for developers, users, and creators alike, enabling the blockchain to better compete in the evolving decentralized economy.
We are excited to build and test this project in close collaboration with the Steem community. Together, we can make Echelon a valuable addition to the blockchain landscape.
Lead developer :
Steemit - https://steemit.com/@hightouch / Linkedin - https://www.linkedin.com/in/ayta%C3%A7-ozden-cetinkaya-3686a311a/
Repository: https://github.com/futureShockco/echelon
This proposal has been created with the help of AI, leveraging the current code from the Echelon GitHub repository to ensure accuracy and a thorough understanding of the project.
Vote for the proposal "Bringing Steem Back to the Future with a Decentralized Sidechain"
On Steemit
https://steemitwallet.com/proposals
With Steemlogin
https://steemlogin.com/sign/update_proposal_votes?proposal_ids=%5B90%5D&approve=true
It's good that you made the proposal. 👍
I agree with Steemchiller: the realisation of your project would be a milestone for the Steem. If we want to move the chain forward, we need to vote for this proposal. In my opinion, you have already shown very good approaches and I believe that you can successfully complete the project.
Your proposal isn't yet online?
Thanks for your support! I think that we have a good starting point already and this can be a game-changer for Steem. But since there’s still a lot to be done, I’ve extended the project over 8 months instead of 6 (which was very optimistic) to ensure we have enough time to complete and test everything.
This is undoubtedly one of the best ideas for evolving Steem I've seen in recent years! 🎉 I'm fully for it and will support your proposal 100%.
Thank you for your support! Hopefully, the proposal gets voted in so I can dedicate full time to making it a reality.
This is nice and appreciatable step, we support this proposal
Hello, Steem developer.
I have a favor to ask of you. Can you help me?
Can you help me find my SBD?
I sent 8000 SBD in my STEEMIT wallet to Binance steem wallet address by mistake.
At the time of transmission, the network was written down as Steem.
In addition, after inquiring with Binance, they asked Binance to wait for SBD to be listed.
Is there any way we can solve it in the current situation?
Hi @kimmankyu,
If your SBD’s have been sent to their wallet nobody except Binance will be able to help you get your funds back. I suggest you to insist a bit more, telling them that you have an emergency. I also suggest you to open a request to the support instead of talking with their chat.
Good luck!
Send them mail with screenshots
I hope you will be able to get back your SBDS
As the others said, you have to contact Binance.
This is the transaction ID of your transfer: 42914cdca93ae4ef77d18151569ece8f3faa8638. You can see the transaction here: https://steemworld.org/block/93365704/93365704-4
Binance should be able to retransfer the amounts if you send them the transaction ID.
I asked Binance and they said they can't solve it because it's an unlisted coin. The only way is to wait for SBD to be listed on Binance. It's hopeless
0.00 SBD,
0.24 STEEM,
0.24 SP
Maybe they'll list SBD soon, but if they wanted to, they could return the asset immediately. Because SBD ist on the same wallet and chain as STEEM and this asset is already listed.
0.00 SBD,
0.94 STEEM,
0.94 SP
A few weeks ago in a thread about a different proposal for a side-chain I posed a skeptical question, so it only feels fair to me to ask a similar one here: Is a new side-chain something that would get enough support in the broader world to actually work well? Given that the Steem mainnet is already struggling with broad acceptance wouldn't it make more sense to find a way to be better connected to other established chains than to try to spin up a new second layer?
(Hopefully this isn't interpreted hostilely, but more as a devil's advocate question to better understand the vision being proposed).
0.00 SBD,
0.00 STEEM,
0.35 SP
I can answer for both proposals since they share the same core idea, though I wouldn’t call either a true Layer 2. A proper Layer 2 inherits tech and consensus from Layer 1, like Arbitrum does with Ethereum. A sidechain, on the other hand, isn’t supposed to be broader than Steem—that’s not the goal. In the case of Echelon (this proposal), every action requires a Steem account, so by design, it stays within the Steem ecosystem.
Steem has fast, feeless transactions, which is great for developers, but the lack of smart contracts means projects can only rely on the STEEM token for their tokenomics. Most teams want their own token and economy (and I say this as the creator of Drugwars, which was the most played crypto game at one point). Because of this, developers tend to go for blockchains that give them more flexibility. That’s exactly where a sidechain like Echelon comes in. The proposal also includes a EVM Multisig Wallet Relay, which lets sidechain witnesses confirm transactions and pass them to any EVM-compatible chain (Ethereum, BSC, Arbitrum, etc.). What does that mean in practice? A developer or user could interact with Ethereum smart contracts using only their Steem account something that’s nearly impossible to do directly on Steem. We could even take it further by launching a custom EVM chain with zero fees for Steemians, so they can deploy Solidity smart contracts without paying any gas fees.
So I’m not sure if that fully answers your question, but in short:
Yes a sidechain can bring in more dApps and, ultimately, more users to Steem.
Even if people don’t care about the social aspect or the fundamentals of Steem, by using those new dApps they’ll still use Steem.
That being said, I’d be curious to hear your take, how do you see the connection between steem and those established chains, and in what way do you think it could bring real value back to Steem?
0.00 SBD,
0.21 STEEM,
0.21 SP
I think one of the big problems Steem has is economic isolation. It doesn't have broad support on exchanges or access to things like liquidity pools, and I think most people are more hesitant to care about tokens which are a hassle to sell than they are about tokens where there's a potential path to exchange them for something broadly valuable. Plus being isolated makes Steem more vulnerable to weird stuff, such as whatever was happening with the price of SBDs on Upbit for the past few years which is only now correcting, or exchanges arbitrarily enabling or disabling deposits with little explanation.
Personally I think that the only real long-term value strategy is to lean on Steem's unique value proposition -- chasing trends where other projects are already ahead is probably not going to pay off. So in terms of something like games, I think the way to go would be a way to find a way to build on what's different about Steem, not try to make it easier for devs to do the same things here that they do on other chains (of course figuring out what would actually do that is not easy).
I am not an expert in such things, but I posted this post wondering if using multisig accounts could be a way to have a consensus mechanism that doesn't rely on an independent set of block validators.
0.00 SBD,
0.00 STEEM,
0.34 SP
That's a great proposal. We want to fully utilize the sidechain for Hari-Raid👀
0.00 SBD,
0.17 STEEM,
0.17 SP
I just tried Hari-Raid and it's pretty cool like to see onchain transactions for a game like this. I'll try again soon to beat the Drowned Wraith!
And thank you for your support.
0.00 SBD,
0.17 STEEM,
0.17 SP
Awesome! We have you! Hightouch. I strongly support your proposal.
0.00 SBD,
0.16 STEEM,
0.16 SP
It is a necessary proposal and, given what you are suggesting, it is viable.
Thank you for presenting it.
Two questions, one related to the proposal and one not.
Question 1: How will this work for accounts with proxied votes?
Do the tokens go to the voter or to the owner of the stake?
Question 2: Just out of curiosity, is fundition.io still working? For some reason, I thought it had shut down years ago. But, I was surprised to notice recently that the site is still online, and I imagine that most of Steem's current user base is not aware of it...
Hi @remlaps,
But here you go with a screenshot of the new Fundition project creation screen. You will notice two new types of project that would be a great addition to the existent one
PS: you can open the picture on a new tab to see better.
0.00 SBD,
0.29 STEEM,
0.29 SP
Thanks for the reply!
1.)
I haven't looked at the code, but based on https://steemworld.org/proposals, I believe the proxy setting does apply for proposal voting, too. If you click into any proposal on that link, it shows influence from both owned SP and proxied SP. It also shows voters with no influence because their proxy hasn't voted.
2.) Nice to see that fundition.io is being developed. Thanks for the update on that. I always liked the concept.