How does Centrifuge work?

Centrifuge's mission is to change the rules of global trade and create economic opportunity around the world. Global B2B spending (that is, sending invoices) is about $180 trillion. With an average payment term of 60 days, businesses, especially SMEs, need financing to bridge the gap. This is one of the main reasons why SMEs have a harder time achieving sustainable growth than large corporations. Existing solutions, such as decomposition and reverse decomposition, can only address a small part of this need. That's why we created Centrifuge OS - to allow businesses to exchange business documents such as invoices, and tokenize these assets for greater access to financing - thereby unlocking value that was previously unavailable.

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Centrifuge Chain is the gateway to the blockchain multiverse for real-world assets. We built the Centrifuge chain on Parity's Substrate and built a bridge with Ethereum! This allows us to change faster and use a consistent approach to certain features.

At the same time, we were able to develop a standardized Ethereum bridge that can be reused by other projects, which in turn increases interoperability. Substrate allows us to easily enter the Polkadot ecosystem and connect with other blockchains that support the standard.

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Centrifuge Efficiency

Centrifuge Chain is specifically optimized for the transactions required for our specific use case. This focus allows us to improve current architectures in several key areas: speed, cost, storage efficiency, and privacy.

Ethereum does well for low volume high value transactions. A large number of use cases that require privacy protection require different solutions. The average enterprise user, whether a SME or a large enterprise, will spend more money using Centrifuge on Ethereum than existing solutions. For most businesses, it's not worth making the change. But what if we could keep costs down and have high throughput capabilities?

Transactions on the Centrifuge Chain are optimized for the small subset of operations required for our specific use case. This allows for faster logic execution and transaction finalization. The optimization of transactions, coupled with our PoS architecture, also greatly reduces transaction costs. The Centrifuge Chain also implements a state rent model, requiring users to pay for the continued availability of their data over long periods of time. This encourages decentralization as fewer resources are required to run a node. Building our own chain will also allow us to improve the user and developer experience on Centrifuge. Our users want privacy, and that's something we can build directly into - targeting the features they need from the start. For developers, we can provide custom APIs and tools that come with blockchain nodes instead of smart contract APIs that are difficult to integrate.

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The Centrifuge Chain uses its own native token - the Radial (RAD) token. It also incentivizes validator and nominator participation through block rewards.

The Centrifuge chain is built on Parity Substrate and relies on pledged validators to reach consensus on 3 components to submit blocks to the blockchain:

• BABE - Block Generation/Authorization

• GRANDPA - Block finality tool

• NPoS - Validator Election Algorithm

Any node can present itself as a validator candidate, but the number of validators is limited. Only validators with the highest stake will be selected into the validator set. Validators can stake their own RAD or be elected by nominators who hold RAD.

Validators must run a full node and directly participate in block production, finality, and validity checks. They can choose a reward commission, collect upfront from the reward, and then split the remainder with the nominator.

Validators must remain online and available with high uptime. Validators are punished with slashes for deliberate attacks, running modified software, serious bugs in the code, and unresponsiveness.

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Original link:https://docs.centrifuge.io/chain/overview/introduction/

Translation: Centrifuge Chinese Community