Introduction

Being one of the oldest projects on the cryptocurrency market, DMD Diamond has undergone several significant changes in its architecture as a response to the constantly changing and evolving technology and market conditions.

DMD Diamond v4 is an independent blockchain with full-stack integration of application, networking, governance, and consensus layers for building, deploying, and running general-purpose and interoperable decentralized applications in a fast and low-cost manner. By utilizing a mix of Honey Badger Byzantine Fault Tolerance consensus algorithm (HBBFT) and the delegated Proof-of-Stake based validator election (POSDAO) protocols, DMD Diamond v4 has become the first blockchain to implement cooperative consensus with a low carbon footprint, fast transaction times (approx. 400 tx/s (transactions per second)) 1 and low fees.

The DMD coin — one of the oldest cryptocurrencies on the market — maintains its original fixed-issuance coin emission model and remains five times more scarce than Bitcoin with a finite supply of just 4.38 million coins. DMD is one of a very small number of coins, including Bitcoin, Litecoin, and Peercoin, that have survived from the inception (2013) to now and that are still actively supported and traded.

DMDv4 is also the first blockchain that implements sustainable endless coin rewards for consensus nodes and dPOS stakers while maintaining a coin maximum by utilizing a new mechanism that reinserts unclaimed and abandoned coins into circulation after a number of years. This mechanism is designed for the long-term limitless growth of the networks and prevents a possible imbalance within scarce-supply coin ecosystems.

Moving with the progress of the industry, the DMD Diamond team has implemented changes that allow interoperability between DMD and other blockchains, using an addressing structure and smart contract engine that allows interoperability and cross-chain movement of values and messages. The “coin wars” are over and it is an industry-wide imperative to create stability and interoperability among the coin and token holders across the cryptocurrency industry. For that reason, DMD is creating strong interoperability capabilities with other Ethereum-based projects (Open Ethereum, POA Networks, xDAI, Artis.eco, lab10.coop, etc.).

The DMDv4 coin development represents the first step towards a DAO (Decentralized Autonomous Organization) 2 as the change is based on a vote taken among the DMDv3 holders, creating a democratic process. DMDv4 is a newly developed chain that will replace DMDv3 and that includes the capacity to add on-chain governance mechanisms that will be deployed in versions 4.1 and beyond.

Mission

The fourth iteration of DMD Diamond is a cornerstone of a store-of-value monetary system that is not government-issued or controlled. Their mission is to enable people to achieve financial freedom and independence, by creating a platform that provides a safe, affordable, and rewarding smart contract powered blockchain economy.

DMD Diamond's vision is to contribute to the blockchain ecology through the development of Open Source protocols, utilities, and services, forwarding the interoperability of blockchains, thus increasing the viability of the entire cryptoverse.

Features and Benefits

To address the industry challenges, the DMD Diamond team presents version 4 of its blockchain. DMDv4 is the first cooperative consensus blockchain with a delegated PoS-powered validator election which allows for high speed and performance, absolute censorship resistance and fork resistance, instant finality of transactions, and other advantages that cannot be delivered by a competitive consensus

* To increase the decentralization of HBBFT DMD Diamond did choose to expand it with a dPoS based node election mechanics powered by POSDAO.

The DMD v4 blockchain adds the smart contract functionality and sets out to align with the industry as it is: the coin wars are over and blockchain interoperability is important for the entire industry. Therefore, DMDv4 is compatible with Ethereum EVM smart contracts, making it simple to port smart contracts written for Ethereum towards DMD Diamond v4.

Diamond is also designed so that it can be a participant in future blockchain-based ecosystems that utilize bridges and other cross-chain value transaction methods. The aim is to provide every participant with maximal freedom to host projects on the platforms that best apply to their needs. The DMD blockchain answers many of those needs, and other blockchains are part of answering specific needs for other developers and participants.

To sum it up, The list of DMD Diamond v4 features includes the following important capabilities:

• Limited issue of tokens, with a low cap of 4.38 million tokens, with full issuance of all tokens at genesis block, with no ability to mine any additional tokens or dilute the existing amount of coins in any way.

• Smart contract capabilities with Turing-complete programming language.

• Instant finality of all transactions using the Honey Badger BFT protocol

• Fast throughput: predictions and testing demonstrate a minimum of 400 TPS.

• Rotating validation nodes, and maximum validation node staking allows for a randomized distribution of power among validators for 12 hours (Epoch), no concentration of power, and fair rotating.

• Censorship-resistant, utilizing threshold encryption. Single nodes cannot act maliciously against particular transactions because they cannot see the contents of the transaction until it is validated.

•  DMD staking happens with a limited set of validator nodes, and a maximum amount staked on top of these nodes because of DMD’s scarce supply.

• Interoperability and full compatibility with other blockchains: Code written for Ethereum EVM will run on the DMD v4 blockchain enabling easy migration between chains.

• Fork-proof, with 2/3 majority required, and no opportunity for a dispute of the chain.

• No orphan blocks resulted from simultaneously created competing blocks are possible on the chain, because of its cooperative protocol with fractional transactions

•  On-chain governance support with upgrade 4.1

• Random number generation capabilities built-in.

• No wasted network capacity. If there are no transactions, no empty blocks are created as with other blockchains. DMD may include a very small heartbeat block if for periods of time of more than 10 minutes there are no transactions.

•  Recovery of lost coins through a fair aging mechanism that identifies abandoned coins in POSDAO after a number of years.

• Sustainable long-term coin and ecosystem maintenance and issuance.

 Interoperability and Migration for DApps

DMD Diamond has taken the approach that cooperation and interoperability across chains is a must for the sustainable and long-term development of the crypto industry.

For that reason, the DMDv4 is being created as a system that is fully compatible with Ethereum, using Open Ethereum addressing systems and foundations, and running EVM apps according to the protocol standards. The result is that dApps can be easily migrated across chains.

Open Ethereum Client (formerly Parity) is included as part of the package for DMDv4. This is the most well-known and fastest Ethereum client and is robust and well-proven in the industry.

Interoperability Bridges provide connectors to other chains, allowing the transfer of value across coins and other blockchains. DMDv4 allows easy integration by using third-party Layer 2 interoperability solutions that support DeFi apps and other apps that integrate smart contract functionality with multiple different crypto assets. Connectors allow access to games, NFT, DeFi, and other types of dApps across chains.

Other solutions can interact with or run on DMD in the future. For example via TokenBridge 8 Arbitrary Message Bridge (AMB) — a bridge designed for universal cross-chain data transfer — that could potentially allow integration with other chains in the future. The idea behind these bridges is to allow smart contracts from one blockchain to understand and interpret smart contracts from other chains so that they can work together on different types of dApps or communicate across dApps.

Such solutions allow for migration of fee intense parts or whole DeFi protocols, or decentralized exchanges, or similar projects to run partly or as a whole on DMD Diamond blockchain and still able to move assets back to other chains, for example, Ethereum.

Smart Contract Support

DMDv4 will include smart contract support based on EVM so that existing smart contracts developed on other chains can run on DMD. DMDv4 supports Solidity and the other languages that are supported by the Ethereum blockchain.

Because of the much faster transaction times, lower fees, the ability to run the same code on multiple chains, and easy smart contract migration back and forth, DMD represents an appealing alternative to Ethereum. DMD Diamond is a long-running blockchain with a highly distributed community of holders, meaning that it is a very secure and stable network, so application developers can feel comfortable with using DMD as a fast-throughput alternative to Ethereum.

Secure Consensus

DMDv4 is a decentralized multipurpose blockchain with a highly secure and distributed consensus algorithm and a distributed system for rewarding the nodes that secure the system. Diamond has an old community with many coin holders and uses delegated Proof-of-Stake so that every coin holder can be part of the validation mechanism and cast their weight to the validators that are acting in good faith on the system.

The DMD network allows any full node with 10,000 DMD to become a validator candidate, and for any coin holder with at least 100 DMD to stake their coins on validator candidate nodes. In this way, coin holders can signal the nodes they trust most to be reliable/stable and increase by adding coin weight on them the chance to get selected to be part of the active validator set more often. The maximum DMD per node is 50,000 DMD, either held by the node or staked by DMD coin holders. Up to 438 nodes are possible, based on the amount of DMD in circulation.

Validation rotates among the validation candidates, with 25 being picked randomly every 12 hours, called Epoch. During the Epoch, the validator nodes use the Honey Badger Byzantine Fault Tolerance consensus protocol to validate transactions, and Epoch rewards are distributed equally among nodes. The distribution algorithm is weighted such that every node will get chosen to be in the Validator Set in proportion to the amount of staking on the node.

This system is designed such that:

• Validator Candidate Full nodes secure the system: 438 maximum, 50 – 75 expected.

• A highly distributed system where a random subset selection of 25 active validators is made every 12 hours via POSDAO dPOS mechanic, so all validators candidates have a chance to get a turn twice a day. Note that if there are fewer than 25 candidates, the system can function with fewer validators too.

• Coin holders can stake their coins on the nodes, showing support for the best candidates, which weights the choice and ensures that validator nodes that are more reliable are chosen more frequently.

• Epoch rewards get split equally at the end of the Epoch between all active validators. Each validator then split his share proportionally between the coin owners who staked upon this validator. Misbehaving validators get no rewards at all, their coins get locked and they cannot become a part of the active set during a few Epochs.

• HBBFT consensus algorithm allows fast/instant final transactions, high transaction throughput, and increased security of the system via threshold encryption.

Network Participants

Coin Holders & Wallets

Any coin holder on the DMD network can stake their tokens on validators to earn Epoch rewards and to vote when governance decisions become available in versions DMDv4.1 and onward. The staking will be available from a web-based dApp accessible for anyone with a wallet that supports a custom Ethereum style network and WalletConnect, such as Minerva, Metamask, or MyEtherWallet. Anyone with DMDv3 must upgrade to a new wallet and claim DMDv4 as described in the Migration from DMDv3 to DMDv4 section, and then they can easily participate in the securing and governance of the network.

Validators

DMD Diamond v4 utilizes validators for the transactions, as per the HBBFT protocol. Each elected (active) validator receives an equal share of Epoch rewards for cooperative contributing to block creation and validating the transactions and compute smart contract executions on the DMD blockchain in a defined timeframe (one Epoch), each active validator shares the rewards among themselves and their delegates. The validation process has been described in detail in the Secure Consensus section.

Block rewards for active validators and delegates on them are split proportionally according to the number of coins staked for that validator. However, the minimum to the validator will be 30% of the block reward. If the validator’s share of the staked coins is less than 30%, the validator gets 30% and the rest 70% is distributed among the coin holders proportionally according to their stakes.

Validator candidates require:

• Full node installation of the DMDv4 chain on a Linux server with the DMD version of Open Ethereum which include the DMDv4 extensions including HBBFT/POSDAO and the proper configuration

• Internet with Static IP address and a reliable 24/7 uptime.

• Minimum collateral of 10,000 DMD (from validator candidate owner), maximum 50,000 DMD can be staked on one validator candidate (combined from the owner and others who stake on top of his node).

• Link to address of the node that delivers the work.

• The validator candidate registration and collateral locking through the POSDAO dApp.

Note that the node address is not the same as the address where the coins are coming from. Validator candidates re-stake the coins they earn as rewards. Validator candidates and dPOS stakers on top of them can adjust (deposit or withdraw) staked coins anytime (inside the allowed range) and the change (transaction of coins) happens at the next Epoch (12 hours).

Governance

The DAO Governance module is a weighted voting module that allows validators to vote for system changes, upgrades, and other proposals and optionally approve requested funding from the DMD DAO governance funding pot.

Important: DAO Governance and POSDAO are different things. DAO Governance is a manual smart contract powering the decision-making tool to vote over proposals, POSDAO is an automated smart contract to support a fair and decentral election of active validators. POSDAO is an essential part of Mainnet launch 4.0; DAO governance is part of the first planned big upgrade 4.1.

Only validator candidates registered on the permissionless network can vote in the DAO, but coin holders can stake their DMD token with any validator candidate they choose and change their affiliation at any time, with the change taking place when the Epoch changes. To stake, coin holders use a web interface or the interface of a compatible wallet that can connect to a customized Ethereum-like network and interact with dApps via WalletConnect. All voting and staking take place without the need for the full node. The validator votes on behalf of all coins that are delegated to the validator. This way, distributed governance is enabled through delegated Proof-of-Stake.

All proposals and voting are public and transparent. This is important so that participants can delegate their stake to the validators that are voting aligned with their interests.

Proposal cycles

The proposals submitted to the DAO will be discussed ongoingly and any community member can participate in the discussion. There will be a fee associated with submitting a proposal for a vote to avoid malicious attempts to disrupt the process with spam requests. Proposals of any type can be accepted: code changes, requests for funding, or any type of written proposals to the community. On a regular monthly basis, the validator candidates will take a vote on the open proposals and funds will be allocated from the DAO pool accordingly. The monthly cycle will allow 2 weeks of deliberation and feedback and 2 weeks for voting.

DAO Voting Change Decision by Validator

Validators are able to change their decision. Delegates should monitor their validator voting behavior and to switch to a validator that doesn't change his opinion at the last minute. DAO encourages validators to make decisions early and stick with them, in order to attract further delegates who search for predictable voting results. Validators are encouraged to vote early in order to display their opinion by voting for an option in a proposal. Delegates are encouraged to stake their funds on active validators that vote according to their preference.

It is possible to change a vote during the 14-day voting period and the change will be transparent — so validators are encouraged to explain why they change the vote to provide that those who staked should have a chance to either agree or move their stake to another validator. Delegates whose validators are inconsistent in their voting behavior are likely to switch to another validator.