We are pleased to announce the listing of the new digital asset Orchid (OXT) in our INR markets on 25th June 2020. Deposits will begin at 25th June, 4:30 PM IST (12.00 PM CEST) and trading will go live on 25th June 2020, 5:30 PM IST (1.00 PM CEST).
Orchid is a San Francisco-based blockchain and software company that has built the first incentivized, peer-to-peer privacy network. This project provides a decentralized VPN, working to create a secure and private internet against private and public surveillance. It works on the Ethereum blockchain and allows users to buy bandwidth from a global pool of VPN service providers. The project is of particular interest to people who live in countries with excessive intrusion in browsing by the government.
The idea behind Orchid is that it can build a stronger network by offering people incentives for sharing bandwidth. The first consumer-facing Orchid product, the Orchid app, provides a mobile VPN on Android and iOSin Testflight that masks users’ internet traffic by routing it over the Orchid network. This peer-to-peer privacy network consists of the Orchid app, the Orchid VPN client that runs in the app and the Orchid digital currency, and OXT that powers the network, connecting buyers and sellers of bandwidth in an open marketplace.
Rather than competing with existing VPN providers, Orchid has partnered with existing VPN providers to provide their services on Orchid. This ensures that Orchid always has bandwidth to make the network usable.
The Orchid Protocol
The Orchid Network’s marketplace is two-sided. Payments are expected to be made at a per-packet level with high frequency. Ethereum’s layer 1 would be too slow and expensive to settle nano transactions at the level of bandwidth exchange required between buyers and sellers in the ecosystem. To maintain a low cost marketplace, Orchid uses an advanced payments architecture known as probabilistic nanopayments for per-packet network payments, which allow Orchid to scale its payment throughput.
This nanopayment system is the foundation of the Orchid peer-to-peer bandwidth marketplace where clients pay node operators OXT “tickets” for proxy bandwidth. The system is designed to lower the transaction fees on small payments by amortizing transaction fees across many transactions and even across multiple parties.
Service providers on Orchid run software similar to a typical VPN daemon for protocols such as OpenVPN, but which speaks the Orchid protocol.
Orchid nodes maintain registration information in a stake registry and provider directory on Ethereum. The stake registry is optimized for enabling the Orchid app to automatically discover random servers in a decentralized environment, while the provider directory allows Orchid nodes to register metadata such as geolocation or additional services offered.
Staking in Orchid
Staking is a process where one deposits and locks up an asset into an illiquid contract or mechanism in exchange for revenue or rewards. In Orchid, VPN service providers stake OXT in an Ethereum smart contract to advertise their services to clients. Orchid clients then select a service provider randomly, weighted by proportional stake, so that the probability of picking a particular provider is equal to their fraction of the total stake. Once a node reaches its maximum bandwidth capacity, any additional stake is unnecessary since it is effectively wasted.
OXT which are staked allows for bandwidth provisioning to begin immediately. If the user wishes to unlock and withdraw their stake they must go through an unlocking process. This involves a cooldown period of three months, during which time the finds cannot be used as a stake deposit, nor can they be transferred elsewhere.
In fact, Orchid allows delegated staking on its platform. This means that any OXT holder can stake their OXT on other service providers of their choice. There are no automatic benefits of staking on someone else’s behalf, but the staking mechanism could be combined with a revenue sharing contract between the staker and the stakee.
Privacy and Anonymity
Orchid is set up as a single-hop circuit configuration, which provides users with protection from websites seeing a user’s IP address and physical location and ISPs seeing what websites are being visited by the user and when.
There is no way to trust a VPN provider. So, the Orchid system allows its users to decide which nodes they trust. Orchid also provides another solution by allowing users to string together several Orchid nodes into a multi-hop circuit. This advanced feature prevents any single provider from gathering enough information to know who you are and what information you’re accessing. Users may configure multi-hop routes themselves.
The Orchid Digital Asset (OXT)
OXT is a new Ethereum (ERC20) compliant digital currency. It is used by users to purchase VPN service, and service providers receive OXT for the bandwidth they provide. Both users and providers stake OXT in the Ethereum smart contract. The supply of OXT is fixed at 1 billion with the only possibility of some OXT burn. This means, there can be no inflation but only a small potential for some deflationary pressure.
The OXT digital currency provides value in the Orchid network in a number of ways:
A Bandwidth Provider - Anyone can operate an Orchid Node, but must first stake OXT, with the more OXT that is staked, the greater the chances of reward in the network. Since Orchid protocol works on probabilistic nanopayments, the larger the amount of OXT staked the greater the chance of being rewarded for providing the network with bandwidth. Assuming typical and honest selling behavior (no users drop them for bad service) the traffic based on the OXT staked will translate into a similar portion of the total revenue. The staking decisions of sellers is left to their own choices.
A Bandwidth User- For the first time, users can opt for a pay as you go service and have a secure internet connection. Users only pay for the bandwidth they consume and not on a subscription basis.
Though the Orchid project started in 2017, there has always been a need for a low cost marketplace for VPN for a long time. The VPN services being provided by Orchid are certainly a valuable commodity. Privacy and security while being online is becoming increasingly important in our modern world.
Users simply need to download the Orchid VPN app, purchase OXT (from CoinDCX), add OXT to their wallet (any wallet that supports Ethereum will support OXT) and choose the path they wish to use for a secure connection anywhere in the world while only paying for the bandwidth they consume.