What Is Syscoin (SYS)?
What Is Syscoin (SYS)?
Syscoin is a blockchain platform that combines the security of Bitcoin’s Proof of Work (PoW) consensus mechanism with the functionality of Ethereum-based smart contracts and ZK-rollups. The project achieves this with its dual-chain Layer 1 architecture. Syscoin’s native blockchain, UTXO, provides data availability and finality, while a second chain, a Network-Enhanced Virtual Machine (NEVM), enables compatibility with Ethereum and the creation and execution of smart contracts. Combined with Layer 2 scalability solutions like ZK-rollups, Syscoin is able to offer the scalability of Ethereum with the security of Bitcoin.
Finally, Syscoin is also merged mined with Bitcoin, which means miners can simultaneously mine both cryptocurrencies at the same time.
Who Created Syscoin?
Syscoin was launched in 2014 as a fork (a modified version) of the Litecoin network with the vision of creating a “Bitcoin 2.0” cryptocurrency, offering decentralized services like marketplaces, escrow, identity, and asset creation.
The project’s founder is Sebastian Schepis, a seasoned entrepreneur and software developer with over 25 years of experience. Today, the project is led by the non-profit Syscoin Foundation with Foundation President and Lead Developer Jagdeep Sidhu.
Sebastian Schepis is currently serving as the co-founder and CTO of Nomyx, a platform providing a no-code tokenization-as-a-service-solution. His experience in the cryptocurrency and finance space includes CTO, consultation, and Technical Architect roles in companies like Figur8 Cloud Solutions, Blockchain Foundry Inc, AllCloud, NextBlock LLC and more.
Jagdeep Sidhu is the President and Lead Developer of the Syscoin Foundation and CEO of SYS Labs. With nearly 20 years of software development experience, Sidhu is an expert in blockchain technology, artificial intelligence (AI), machine learning (ML), client/server development, and distributed systems. He holds a Bachelor of Technology in Computer Science from the British Columbia Institute of Technology with a major in AI and digital image processing.
How Does Syscoin Work
Syscoin Blockchain: Layer 1 Components
Merged Mining with Bitcoin
As a hard fork (a permanent split from the original blockchain with different rules) of Bitcoin, Syscoin employs a Proof of Work (PoW) consensus mechanism and benefits from merged mining with Bitcoin. This allows miners to mine both BTC and SYS (Syscoin's native cryptocurrency) simultaneously at no extra cost, potentially increasing profits without having to spend extra energy.
Decentralized Finality on Top via Sentry Nodes
In traditional Proof of Work (PoW) systems, a 51% attack occurs when a malicious entity gains control of over half the network's computing power, enabling them to manipulate the blockchain by censoring transactions, double-spending, or even preventing other miners from mining.
Syscoin uses a masternode network (referred to as Sentry nodes) and the ChainLocks mechanism borrowed from the Dash blockchain to enhance the security of Bitcoin’s Proof of Work (PoW) consensus mechanism and mitigate this risk.
These mechanisms work together to create decentralized finality by having Sentry nodes (acting as full nodes) form quorums that vote on the validity of new blocks. Once a quorum reaches consensus, a ChainLock message is broadcasted, cryptographically locking in the block and its transactions, making them irreversible even in the face of a 51% attack on the underlying PoW chain.
Native UTXO Chain Powered by Z-DAG
Syscoin's native UTXO (Unspent Transaction Output) chain incorporates the Z-DAG (Zero-Confirmation Directed Acyclic Graph) Protocol, a scalability solution designed to enable high-speed, low-cost token transfers. Z-DAG transactions are validated by Bitcoin's Proof of Work (PoW) miners via merged mining, but they achieve faster finality due to a relay network that utilizes multithreading for efficient transaction processing.
The UTXO Token Platform built on this chain allows users to create their own Syscoin Platform Tokens (SPTs), which can represent various assets, including NFTs and fractionalized NFTs (F-NFTs). SPTs leverage the UTXO model, inheriting benefits such as compatibility with upgrades on the Bitcoin network like the Lightning Network and Taproot.
Z-DAG also facilitates high-throughput transfers of SPTs with low fees. Average throughput speeds for Z-DAG range from 8k to 15k TPS depending on latency. Furthermore, users can define the number of block confirmations required for a transaction to be considered final, such as near-instantaneous confirmations for micropayments to longer confirmation times for high-value transactions.
Syscoin Blockchain: Layer 2 Components
Network-Enhanced Virtual Machine (NEVM)
The Network-Enhanced Virtual Machine (NEVM) serves as the smart contract layer of the Syscoin blockchain. It provides native, Layer-1 support for EVM (Ethereum Virtual Machine) smart contracts, enabling seamless migration of existing DeFi projects, NFTs, or DApps from Ethereum to Syscoin.
NEVM is a modified version of Ethereum's EVM specifically designed to enhance scalability and interoperability while reducing costs via two key features:
Parallel Transaction Validation: NEVM uses zero-knowledge proofs to validate transactions in parallel, significantly increasing the potential transactions per second (TPS), reaching up to 210,000 TPS.
Elimination of Withdrawal Delays: By utilizing ZK-Rollups to batch transactions off-chain, Syscoin’s NEVM eliminates the typical withdrawal delays associated with the Ethereum mainnet, which can take up to 2 weeks.
Why Trade SYS?
SYS is the native utility token of the Syscoin network with the following use cases:
Gas and Transaction Fees: SYS is used to pay for transaction fees within the Syscoin network, including the minting and transferring of Syscoin Platform Tokens (SPTs) and NFTs, ensuring a constant demand for SYS as trading volume increases.
Masternodes: Users with 100,000 SYS can host masternodes to participate in the governance of the network and provide blockchain services to earn extra SYS rewards such as block rewards, seniority bonuses, and a share of transaction fees.
Governance: SYS is needed to create and vote on governance proposals for the network.
Token Creation: SYS can be burned to create Syscoin Platform Tokens (SPTs) for high-speed transactions or converted to ERC-20 SYS tokens to interact with smart contracts on the NEVM.
SYS Tokenomics
Syscoin’s tokenomics are designed with a focus on long-term sustainability and network growth, based on the EIP-1559 proposal on Ethereum. Following the proposal, SYS uses a dynamic fee structure where a portion of each transaction fee is burned, effectively reducing the circulating supply of SYS over time. By creating deflationary pressure, the token’s value can potentially increase over time as network usage and trading volume grows.
Name: Syscoin
Symbol: SYS
Total Supply: 792,569,633 SYS
Circulating Supply: 792,569,633 SYS
Market Cap: $87,189,263 (on 23 September 2024)
Price: $0.11 (on 23 September 2024)
Token Allocation:
Initial Distribution: 364 million SYS, representing approximately 45.9% of the current circulating supply.
Treasury Fund: 100 million SYS, representing approximately 12.6% of the current circulating supply.
Remaining Allocation (Base Chain + NEVM Rewards + Transaction Fees): 41.5% dedicated to ongoing block rewards for miners and masternodes.
How to Trade SYS on Flipster?
Sign up for an account on the Flipster website or by downloading the Flipster app (Android or Apple).
Click the [Trade] tab.
Search for SYS and click on it.
Select the leverage (up to 100x).
Select either a Trigger Order or Market Order.
Input the amount of crypto you wish to trade, or select a percentage of your available funds to use.
Once you have confirmed the details, click the [Long] or [Short] button to open a position.
Disclaimer: This material is for information purposes only and does not constitute financial advice. Flipster makes no recommendations or guarantees in respect of any digital asset, product, or service. Trading digital assets and digital asset derivatives comes with significant risk of loss due to its high price volatility, and is not suitable for all investors.