After nearly four years of flawless operation, the Tao blockchain is due for some major upgrades so we can move into the next phase of our project. While we have made tremendous in-roads in the entertainment industry and saw amazing success with our musical partners, we have allowed our philosophy of “the cryptocurrency which runs best changes least” to slow down development far too much. The community, developers and major stakeholders in the Tao blockchain, including myself, have come up with a plan to bring Tao into 2020.
This first part will outline the reasons for the upgrade, the plan for the upgrade, and what this upgrade will provide the network and its vision.
It’s Not Like The Old Days
While we certainly value our existing exchange partners such as QTrade.io and Alt.Market, the team took a long, hard look at the friction to adding Tao to other platforms. Here’s the short list of the most critical items:
- Lack of BIP32 support — BIP32, if you’re not familiar, is an improvement born from the Bitcoin community which allows for hierarchical deterministic wallets … or those wallets which may support tens of thousands of public addresses with a single seed value. This improvement is vital for exchanges to manage deposit addresses, as well as allow users to take advantage of hardware wallet support.
- Lack of Masternodes — Masternode activation has been a long time promise of the network which we have waited for the right moment to implement them. Masternodes allow those economic service providers to participate directly in consensus in ways which proof of stake makes cumbersome to implement at large scale.
- Lack of Clear Governance — While I’m certainly the most visible individual involved in the governance of Tao, I’m far from being the only one. We want to clarify and codify the governance of Tao in order to include stakeholders such as exchanges.
- Lack of Developer Tools — Without development tools there’s no way for individuals to actively and directly participate in the future of the music economy, which is a true failure of this project.
But the real problem is…
This is great and all, but none of that addresses the first and foremost complaint of not only the community, but those who would wish to join the community: liquidity.
Traditionally this has been an off-limits issue for projects within the United States due to the nature of regulations however, while one size does not fit all, the way Tao has grown and been managed does lead to some interesting potential within the SEC’s new Safe Harbor guidelines.
Tao is a hodl community. While I couldn’t be more pleased that individuals have such support of the project, market liquidity has all but dried up as a result of individuals hoarding tokens for an eventual breakout. The blockchain being a blockchain, any potential investor of a significant amount of funds would be able to do the math to see a wide range of whales waiting to dump on them.
Market making is now open season. Another significant change has been in the opinion of market makers. As the cryptocurrency space becomes more mature, the reality of market makers in any financial sector has become to be appreciated. This second factor of liquidity is vital as a market maker would maintain order book spreads, as well as the overall health of the marketplace including the encouragement of price competition.
Pivot: Threading the Needle
Clearly these are complex and multifaceted issues which encouraged a great deal of debate and discussion within the community. We suggested a starting point for a new path of development and allowed the community to make suggestions, alterations, or offer alternatives. Here are the results of those discussions.
- Smart contracts are crucial — Not only to fulfilling our mission to artists and musicians, but also to allowing our ecosystem to grow and expand. Developing the existing Tao smart contract capabilities is an expensive, long term issue which may never result in being as robust as existing solutions.
- Music still needs its own blockchain — Moving to Ethereum or Tezos or a platform with equal market traction is simply not an option as it fails to respect the concerns of the music industry with cryptocurrency. Music must have its own solution which comes from and is dedicated to the music economy.
- Technological harmony — Remaining technologically harmonious with the greater of the cryptocurrency marketplace is vital for market traction, developer support, and general adoption.
- Increase liquidity — Not only through an addition to the total tokens represented on the network but by raising funds specifically for the purposes of automated market making.
Given everything stated above, we’ve decided on the following course of action which we are confident will not only bring Tao in line with the rest of the cryptocurrency marketplace, but elevate it to the truly unique position which it has always deserved.
- EVM-based network protocol — The network itself will be upgraded to an Ethereum Virtual Machine based protocol which will enable Solidity development and the potential migration of music and entertainment projects from Ethereum to Tao.
- Delegated Proof of Stake — Tao will move from a pure proof of stake to a delegated proof of stake consensus model in order to solve the complex engineering problems presented by a more complex blockchain protocol.
- Full Documentation and Developers Tools — The documentation is taking longer than the code because we want the documentation and tools we provide to not only be complete, robust, and instantly able to be integrated into applications, but because the overall understanding of the capabilities of the protocol will able to be fully revealed.
- Truly Decentralized Governance — A “Board of Governors” will be created and selected from participating masternodes to guide network development, provide for the administration of various duties and tasks related to network operation, as well as creating outreach programs to assist in bringing new developers and products to the platform.
- Mobile Wallets — Enough said.
We’re hard at work building the code and docs and websites and tools and apps that are needed to roll out an undertaking as massive as this one. Even with such a daunting task ahead of us, we are looking to migrate from the existing chain to the new chain before the end of March.
Part Two of this series will include a description of the pieces of the new ecosystem, what each piece then enables, as well as a rough outline of the time frames in which they will be released. The result will be a clear and complete picture of the new Tao ecosystem, which will be ready from almost day one for developers to move in and start creating!