Handshake V2 Proposal #67
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HNSrevolution
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Handshake V2
Genesis Ideas of Handshake
The initial phase of Handshake was centered on three fundamental ideas that were focused on fostering a community and providing a decentralized alternative to ICANN:
Checkpoint
The idea of establishing a decentralized alternative to ICANN has been embraced by the domain and blockchain communities. Despite the absence of centralized leadership, progress has been made within the community, particularly in the areas of marketing, development, and network establishment. Notable events since Handshake launched in 2020:
Lessons Learned
The two key components in the Handshake launch plan, the airdrop giveaway of HNS to open-source developers and the donation giveaway of invested VC funds, did not yield the intended results.
A significant part of Handshake's ecosystem launch strategy was an airdrop intended to increase developer awareness and support. However, the airdrop that targeted open-source developers had limited success, with only approximately 2.9% of the allocated 900 million HNS claimed.
This outcome highlighted an important learning opportunity: simply giving away coins does not necessarily align incentives. This is similar to the challenges associated with unconditional basic income models, where reciprocal behavior is not mandated.
Also, the entire $10.2M raised from reputable funds, including Founders Fund, a16z, and Sequoia Capital, was immediately donated to support open-source non-profit organizations, such as Apache, Arch Linux, Debian, Gnome, OpenSSL, TOR [3]. Consequently, this allocation led to the unavailability of funds for critical areas such as exchange listings, partner integrations, and further developmental initiatives.
Identities & Communities
Identity is not limited to a mere name or number. It is a reflection of oneself in social, formal, and institutional contexts, and it shapes one's connections with societal institutions.
In essence, a name linked to community membership represents an identity more accurately than a standalone name. For instance, AliceBob.ReligiousBelief, AliceBob.Country, or AliceBob.bitcoin better describes the person, than the name, Alice Bob, alone.
For instance, the two individuals known as Andrew Lee within the Handshake community are frequently mistaken for each other, yet they are seldomly confused with any other individuals bearing the same name. The primary source of confusion lies in their concurrent involvement in the communities associated with Bitcoin, Handshake, and Joseon. To distinguish between the two, individuals often make reference to their non-overlapping affiliations, identifying them as "PIA Andrew" or "Purse Andrew."
Digital Communities
Humans, being social creatures, have an innate desire to belong to groups. The evolving digital landscape has enabled us to engage in a wide array of digital communities, from crypto alpha groups and educational forums to influencer networks and crypto/NFT communities. Ideally, we would like to have the same digital identity across all these communities, although there can be exceptions. Having control over our digital identity is a key benefit.
Market for Communities
Communities connect individuals who share common values. The strength of a community is fueled by the size of its membership, the depth of connections among its members, and the unwavering belief in its values.
For example, the Bitcoin community has grown significantly through bringing together individuals who appreciate decentralized currency and open source technology. It's difficult to quantify the total number of Bitcoin community members and the strength of their connections, but it's clear that these numbers are increasing in proportion with the price of Bitcoin. Ultimately, Biitcoin’s market cap reflects the value of its community.
The majority of communities lack a ticker or market price, yet it is worth considering whether more should. As confidence wanes in institutions and mainstream media, individuals are increasingly turning to communities as a reliable source of truth. Nevertheless, it is important to recognize that communities are fallible, and tribal instincts can override judgment and reason for far longer than necessary.
In general, free markets excel at disseminating information that can highlight truths and discredit misinformation. Communities are able to swiftly distinguish between truths and falsehoods related to their specific areas of focus and expertise. There are abundant opportunities to capitalize on communities, ideas, or movements. This can result in rewards for those communities that grow and are trustworthy.
Communities on Handshake
SLD mints is an exciting emerging use case for Handshake. TLD owners can mint SLDs off-chain via Namecheap and Varo, or on-chain via HNS.ID and Forever.domains. The monetization of TLDs through SLD mints increases the value of TLDs, thereby generating value for the network, as HNS tokens are burned to acquire TLDs.
Through SLD mints, TLDs are essentially minting community membership cards for new members that buy SLDs because they align with the values projected by a particular TLD. Handshake is an ideal system for communities where members can have IDs (SLDs) for the communities they join (TLDs). In the future, communities might want to issue tokens in addition to IDs. Handshake is the only open source technology that allows any online community to have access to all of these monetization options.
Handshake V2: Launchpad for Communities
Summary
The purpose of the Handshake V2 proposal is to apply lessons learned since Handshake launched. This includes fixing the airdrop model and further incentivizing activity by those that have been adding value to the network. Overall, the aim is to have better organization and resources within the Handshake community. The proposal consists of four main components: reallocating the unclaimed airdrop, forming a company to kickstart Handshake V2, developing an EVM-based L2, and making the remaining reserved names claimable.
Reallocation
There are currently 622M HNS in circulation, and 890M HNS left unclaimed for open source developers. This sizable airdrop was expected to have been claimed shortly after launch and in circulation.
Current HNS Supply
As of July 31, 2024 (blockheight 236,087) [4]:
Airdrop to Inaugural Communities
This airdrop is open for community discussion and must be approved by the initial advisory board. These inaugural recipients are being offered this airdrop due to their historical and prospective contributions to the HNS ecosystem.
The inaugural communities will consist of the first members for the Republic of TLDs, the future governance for funding the Handshake ecosystem. Potential inaugural recipients must submit the following details in order to be considered:
Airdrop to TLD communities
This 45M HNS airdrop is intended for TLD owners and the communities established therein. There will be two cutoff dates, which will reward early TLD communities, and also future communities that are incentivized by this airdrop. The desired result of this two-pronged airdrop is for the TLD owners to reinvest the funds in their existing community, in addition to marketing and outreach initiatives.
The first cutoff consists of 31.5M HNS, or 7% of the overall airdrop allocation. This first cutoff concluded on July 31st 2024, and is dedicated for on-chain and off-chain SLD registries, such as Namebase Registry. These registries will be worked with directly to deliver accuracy, trust, and transparency. The airdrop amount will be based on the USD amount earned at the time of registration for the respective TLD, which may involve converting HNS or ETH earnings. This measurement is based on the market and ensures the TLD communities that are the most valued will be rewarded accordingly. There must be a minimum of 20 SLD registrations in order to be considered for this airdrop. As of July 31st, there are 212 HNS TLDs staked with the NB Registry that qualify for the airdrop. The TLD and the airdrop amount earned will be tallied at a later date and shared publicly.
Registries Included:
Open for Discussion:
The second cutoff consists of 13.5M HNS. The cutoff date is February 3rd, 2025, which coincides with Handshake’s fifth birthday. This later cutoff will encourage newcomers as well as other community participants to register, stake, and build communities around their TLDs. Only TLDs staked on dSLD registries, such as HNS.ID or digitalis, will be considered for this airdrop. The reasoning is that dSLD registries are more transparent by nature and should be promoted. In order for existing web3 namespaces (.eth, .btc, .sol, etc.) to qualify for this airdrop, their respective TLD(s) must be bridged over to the HNS TLD counterpart. This will mean that HNS is the active root zone in addition to providing DNS record functionality for their respective namespace.
As this airdrop is intended to encourage positive-sum behavior and community growth, TLD owners that promote cashback programs or self-registering SLDs will not be tolerated. A cashback program is defined as refunding SLD registrants, but may be distinguished from marketing activities such as occasional giveaways. TLD owners that are registering SLDs for the sole purpose of this airdrop will be excluded. Accordingly, there will be extra scrutiny on the larger TLD communities. It is therefore expected that fast growing TLD communities need to publicize their activities and prove their contribution to the network.
All TLD Owners
A total of 45M HNS will be airdropped to all HNS TLD owners. The domain must have been minted by February 3rd 2025, and has to be active by the hard fork date in order to receive the airdrop. The airdrop amount will be proportional to the amount burned at the last on-chain auction for the HNS name. This will encourage quality domain registrations and overall chain activity, while dissuading spam.
Domains may be held on Namebase, ShakeStation, Bob Wallet, or another HNS wallet provider. For domains held with custodians (eg. Namebase), it is at their discretion to allocate the airdrop to individual accounts. For HNS names bought on the secondary market, the airdrop amount will be based on the amount burned for the name’s last on-chain auction. As of July 31st 2024, there were 11.3M domain registrations and 62.5 million HNS burned during auctions. As of now, this roughly equates to a full refund, although that’s subject to change with increased market activity.
HNS V2 Company
Outline
Founding Members & Board
The HNS V2 Company will be governed by a part-time volunteer board consisting of key stakeholders. Board members will not be paid salary or commission. The acting managers for the HNS V2 Company will be long-time community members, including Nole Oppermann, Founder of Hey TX, and Andrew Lee, Handshake co-creator. Other founding members include Namebase, Kyokan, and Superlink. They will collectively be responsible for assisting with the hard fork, HNS L2 development, and dSLD application. Delegation of responsibilities include Namebase helping with the protocol, Kyokan with the technical coding for the L2 and application, and Superlink with the design. The board will include these founding members, in addition to others as determined by the HNS community. New participants may be added to these efforts to contribute according to their own ability.
HNS L2 (revolution)
To improve and extend Handshake as a platform for communities, we propose developing the ability to mint SLDs and issue TLD tokens via introduction of an L2 chain. Combined, this will enable TLD owners to mint SLDs on-chain without leaving the Handshake ecosystem, while providing an option for TLD owners to further launch tokens.
An EVM-based L2 would also enable bridged HNS to trade on decentralized exchanges and integrate with EVM based infrastructure including wallets and block explorers.
A Handshake L2 with EVM will improve user-friendliness for the following use cases:
Since Handshake is a fork of Bitcoin, the L2 explorations are based on how L2 systems are currently designed on Bitcoin.
Rollups
Rollups bundle transactions off-chain and then aggregating it back to the L1 via some form of compact proof. There are two popular types of rollups in the Ethereum world: Optimistic roll-up vs ZK roll-up.
Optimistic Roll-up
Optimistic roll-up operates under the assumption that all transactions are valid unless proven otherwise. This setup requires a multisig controlled by a validator network to inscribe new rollup blocks to L1. In the case of a false transaction, a time-delay challenge-response system is used to halt withdrawals from the main chain.
ZK Roll-up
Zk roll-up utilizes Zero Knowledge proofs to condense validity of all transactions within the proof itself, allowing it to operate under a more trustless environment. The validity proof can be verified directly on L1 before being inscribed on main chain. Whole the validity proof is computational intensive, it does not require a multisig to inscribe new proof onto main chain
Alternative L2
Spiderchain to be researched. However, trust minimization and scalability are preliminary concerns.
Validators (assuming zk roll-up)
L2 Behaviors
SLD Registry Behaviors
Pre-HF requirement
We will need some place for TLD to create a digital community. It does not need to be on footnote, and it should be okay to temporarily use a centralized system for digital communities until the L2 launch.
HF requirement
We will need a way to verify validity proof on HNS L1, and make a coin spendable only if the validity proof checks out. This is done via 'op_cat' and taproot script on Bitcoin L1. We might be able to do something simpler on Handshake depending on how much we can customize consensus rule. Unlike BTC, there is no need to make our solution overly generalizable.
rev id application
The first application built on top of the HNS L2 will be rev id, a decentralized platform for social media creators. The team will closely collaborate with creators to incorporate desirable features. Communities will have the ability to mint dSLD’s, and have their own community token. The HNS V2 Company can receive a portion of the dSLD registrations as revenue. At launch, there will be several social media creators with community sizes larger than one hundred thousand members. This has the potential to be Handshake’s killer app through millions utilizing HNS names.
Future Governance
Republic of TLDs
445M HNS will remain to expand the Handshake ecosystem via a Republic of TLDs.
A network of digital communities coordinates together and practically functions as decision-making mechanism for Handshake, similar to a republic of communities. Contrary to a republic of communities where individuals’ voting power is weighted based on the amount of tokens they own, handshake digital communities vote based on the number of SLD users they have onboarded.
A handshake digital community is an association of people who work together for the betterment of the protocol. For example, the hsd core developers can form a digital community with a mission to maintain the protocol, whereas an influencer can form one with a mission to bring new users to the ecosystems.
A digital community can gain voting power via one of two ways:
A digital community can delegate all or part of their votes to other digital communities. For example, if digital community A has onboarded 10 SLDs and delegated 5 to digital community B, both digital communities will have a voting power of 5.
A SLD user may also re-delegate their vote to another TLD, or to burn their vote entirely by delegating to no one, if they do not agree with the voting direction of their respective TLD. It is recommended a TXT record should be updated to reflect delegation choice of an SLD.
Application Process
There will be an application process where proposals are submitted before the Republic of TLDs. Proposals may be submitted for development, marketing and business initiatives, and other potential benefits to the HNS ecosystem. This future governance model will empower the HNS community to continue advancing the protocol and ecosystem.
A proposed member and/or recipient must state the following:
Technical Considerations
SLDs
As SLDs are a central piece to this system, we need a sybil resistance way of onboarding SLDs. We require all eligible SLDs to be onboarded to an ENS-like system, as described in HIP-005, in order for the TLDs to receive voting power. A burn amount may be added to SLD registration in future proposals if the community deem it necessary to increase the level of sybil resistance. Voting power is based on the number of SLD owners, rather than the number of registered SLDs. Individual owners are determined by public addresses.
Footnote
We propose the footnote protocol as a decentralized method for digital communities and users to coordinate. Footnote is a decentralized protocol designed to work with handshake to store and share a small amount of data.
All digital communities are required to register their TLD on footnote and publish the following information:
All proposals and discussion around the proposals should also be published on footnote.
New L2
HIP-005 supported decentralized SLD registry using an ENS-like system on any EVM-compatible chain. In order to better support future iteration of the digital community systems, we propose a new EVM-compatible, proof-of-stake L2 to be launched with its stakes pegged to handshake. Such a system will be able to provide a more permanent data storage for footnote, a better burning mechanism for SLD registration, as well as any other future improvements to the system.
SLD sovereignty
While TLDs are sovereign, the SLDs can be censured or revoked for violating the communities’ rules and values. This is a necessary condition for the TLD owner, such as a community leader, to enforce the rules and values of the community. As the TLD represents the community, the SLD owner should abide by, and not contradict, the community. Obviously, some communities’ governance will be less restrictive than others.
Remaining Name Claims
With the soft fork of February 2024, the unclaimed Alexa Top 10K and ICANN TLDs were locked. This hard fork proposal includes unlocking the Alexa Top 10k and ICANN for claiming. ICANN TLDs will be permanently reserved for the ICANN TLD owners, and the Alexa Top 10K will be reserved for the ICANN domain counterpart (eg. discord.com) for an additional four years from the hard fork date. While initial $HNS allocations were included for claiming reserved names, this early adoption mechanism will be removed. 10 $HNS will be attached for each of the remaining 11,509 name claims in order to be utilized for updating DNS records, transfers, and renewals. The previously allocated 188.2M HNS, while technically never in existence, will effectively be deducted from the total supply.
Adjusted HNS Coin Supply
Based on July 31, 2024 (blockheight 236,087) [4]:
Other Considerations
The Vision
The vision is to cultivate humans' potential through ensuring freedom of speech, communication, and assembly online with HNS-based technology. From the perspective of many, freedom of speech online has been the focus, but this proposal expands beyond that. There will be an emphasis on building and emboldening diverse communities through Handshake’s deliverance of freely communicating and assembling online. Current events, online and the physical world, highlight the importance of this.
Crypto represents the tokenization of human energy. Massive human energy equates to a valuable community like Bitcoin. HNS can currently be considered a small, passionate community with periodic flickers of energy. While the individuality warrior streak of HNS will remain, this new iteration will bring the coordination and impact of an army.
HNS is a secret hidden in plain sight. From a technical standpoint, HNS is DNS on blockchain. Coupling that with a few enhancements, there are opportunities for limitless communities to coalesce around HNS TLDs. This has never been possible before and has the potential to be a significant improvement on the online community experience.
There is admittedly a pivot from the “build it and they will come” camp. This has been attempted repeatedly over the years without garnering acclaimed success. The HNS L2 (revolution) and first application (rev id) will be built based on direct input from some of the largest content creators and influencers online. This ensures massive distribution on Day 1 of the application’s release. Increasing publicity and usage will have a positive impact on the overall HNS ecosystem.
On the topic of centralization, this proposal will be decided on and implemented by the community. We fully expect (and hope) that the Handshake V2 proposal has amendments based on thoughtful feedback from the community. A primary goal is to have better coordination in the short-term. POW will remain; none of this proposal can be implemented unilaterally. No one, individually or collectively, will be controlling the protocol itself. At the beginning, the implementation of HNS was complex and multi-faceted [1]. Making improvements and iterations demonstrate that there is life within the community and ecosystem. The February 2024 soft fork was a demonstration of this. The potential passage of this proposal does not dictate that there be a singular voice, but rather, all voices of the community will be amplified.
Providing grants through this multi-layered airdrop reallocation to diverse individuals, groups, and businesses will accelerate building and growth. This reboot effort is necessary in establishing a healthy, thriving ecosystem. Half of the overall airdrop reallocation (445M $HNS) will be dedicated to a self-governing funding mechanism to continue progress for the HNS community. This will ensure that current (and future) community projects or initiatives receive adequate funding and attention.
The contents herein are not one-dimensional; the perspectives of community members (builders, miners, entrepreneurs, TLD and coin owners, etc.) have been taken into consideration. The outlined focuses in this proposal will ensure that we as a community accomplish what's necessary to ensure massive adoption for HNS.
HNS is a revolution. We all know that it is a solution to real world problems. HNS represents and embodies rugged freedom; online and the physical world. This proposal is an evolution of Handshake in order to spread this freedom-enhancing technology across the world. We all want to change the web. Let’s make it happen.
[1] Handshake Original Whitepaper https://hsd-dev.org/files/handshake.txt
[2] Web3 Naming Registrations from Encirca https://altroots.com/stats
[3] Grants & Sponsors https://handshake.org/grant-sponsors/
[4] https://hns.cymon.de/stats
[5] https://rerecord.skyinclude.com/
[6] https://github.com/skyinclude/HIPs/blob/HIP018-Adding-A-AAAA-Records/HIP-XXXX-adding-A-AAAA-records.md
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