The ICON platform and its coin are focused on the development of a decentralized interchain network and a smart contract platform with a global outreach. They hope to connect independent blockchains and enable transactions between them.
The ICON platform operates as a decentralized network with an ambition to enforce global interaction between various blockchains, based on smart contracts technology. At the heart of the project is its concept of the “ICON Republic” – a type of a global ecosystem in which the independent communities built around different blockchains are supposed to interact with each other in real time without facing technological obstacles. The ICON project seeks to overcome the separation of the communities built around specific blockchains that have been adopted across diverse industries. Its ICX coins are used to pay for the access to the global ICON network and serve as the tokens which enable the smart contract based transactions on the platform. These tokens are also awarded to the members of the network for their participation in it.
To bring its vision closer to reality, the ICON ‘s creators focused on designing a blockchain protocol which will support global interoperability for the benefit of various stakeholders, including the government institutions and the organizations in banking, insurance, healthcare, education and other sectors. The vision is to bring the representatives of these sectors under an umbrella of a unified network infrastructure supplied by ICON and allow them to engage in making transactions.
In this manner, the ICON network aims to connect diverse stakeholders which already use or are expected to adopt blockchain as the main platforms for their operations. For example, a healthcare institution using one blockchain can create a secure chain ID for a specific patient and forward it via the ICON network to the health insurance company on another blockchain. The insurance then checks the relevant data, processes the payment and sends the confirmation of it to the healthcare provider on the same network.
In addition to interoperability, ICON aims to create an environment which will facilitate communication between different blockchains without the involvement of the third parties. The network will also focus on setting out the global standards for the interaction between the blockchain communities using its loopchain blockchain (see below). Let’s see how this works in more detail.
ICON as the Network of Blockchain Communities
The ICON network is developed around several interconnected components which are organized hierarchically, based on the level they operate on. At the heart of the network are the communities built around a particular blockchain, governance protocol or any other technology, such as those that gather the users of Ethereum, Bitcoin or any other crypto platform. These communities consist of a set of nodes which are brought together under a single governance system which may differ from one community to the other. On the ICON network, they make up what is described as “ICON communities”. They are the focus of the ICON’s stated goal of making these groups interact without facing technological obstacles to it.
Closely related to the ICON communities are the community nodes (“C-nodes”). In addition to making up the infrastructure of a single community, the nodes are recognized as decision-makers on their blockchains based on the chosen consensus principle. They remain in charge of maintaining the existing governing system as well as of keeping an eye on the general health of the blockchain they exist on. Yet, in the context of the ICON system, each community and C-node is recognized as an independent unit which exists on its network and the ICON pledges not to interfere in the internal affairs of each community despite the fact that it exists as its “component”.
Citizens and Representatives on the ICON platform
In order to make the individual communities communicate and work together, the ICON network needs to provide an adequate interface for such an interaction to take place. Components of this system are what the ICON platform designates as the “community representatives” and “citizen nodes”.
Community representatives are chosen by their individual communities to represent their interests on the ICON network. In turn, these C-reps take care of the governance business and validation of transactions that take place between the communities which form parts of the ICON ecosystem or the “ICON Republic”. To a degree, one can compare their function to what the delegates do as part of the Delegated Proof-of-Stake (DPoS) consensus mechanism, such as those used by Lisk or BitShares platforms. In return for the tasks they perform, the C-reps are rewarded by the native currency of the ICON platform, the ICX coin.
On the other hand, citizen nodes act as the gateway which allows standard members of their individual communities to connect to the ICON platform. Considering that the ICON bills itself as a platform for smart contracts, the nodes are able to build and use the decentralized applications (dApps) on the ICON’s native platform. In this case, the ICON will provide the infrastructure for them to do so, as well as empower them to make transactions. At the same time, this does not mean that the citizen nodes will be granted any governing or voting power on the ICON network itself, or as part of their native blockchain communities.
Working towards the ICON Republic
Once the citizen nodes and community representatives have been established as the bridges between the participants in the ICON network, the ecosystem is ready to operate on the ICON and NEXUS levels. Just as the nodes which form a single community are interconnected, the ICON Republic ecosystem serves to link various communities to a single system. The “Republic” itself is made up of the citizen nodes and community representatives. It can be said to operate as a sort of a governing “federal” body for the independent blockchain communities represented by their individual C-reps. These representatives have the voting power in terms of the Republic’s governance and policies, such as regarding the use of cryptocurrency, protection of the network’s integrity and the handling of potential discrepancies related to transactions.
The C-reps are also connected to the “Nexus” as a blockchain serving as the foundation of the ICON Republic. These representatives function as the ICON’s “portals” through which the communities establish interaction with the Nexus which, in turn, allows the blockchain communities to interact among themselves. In the manner similar to that of Ethereum, the entire ICON ecosystem thus becomes a hub which allows for the creation and distribution of decentralized apps and other blockchain-based projects. All of these are readily available for access by any user having the status of a citizen node the ICON’s Nexus public channel.
What is the Loopchain?
One of the main challenges that ICON network had to contend with was making various blockchain platforms on a single ecosystem work together, knowing that each of them possesses unique architecture and incompatible governance models. In order to make this possible, the ICON’s technical team came up with the loopchain technology. They defined the loopchain as a high-performance enterprise blockchain offering smart contract functionality, with the focus on ensuring customizability based on specific operational requirements. This chain is connected to other distributed ledger platforms.
Loopchain lies at the heart of the ICON’s nexus-based system. The chain itself possesses multiple channels with clients representing individual blockchain communities. This multichannel system makes it possible to have several channels on a single blockchain network, all of them capable of handling requests and smart contracts as well as reaching consensus. While the individual communities are free to use their own consensus model, the consensus between them on the ICON network is ensured via the loopchain’s Fault Tolerance Consensus protocol. This protocol allows for a more secure and faster consensus reaching, without the need for forks. To a degree, the protocol operates in a manner which is similar to that of the Delegated Proof-of-Stake model, with C-reps participating in the ICON’s larger governance systems as an equivalent of delegates.
These representatives are linked to the ICON Nexus via the Blockchain Transmission Protocol (BTP). This system can manage transactions between individual blockchains, from the one initiating it (transmitter) to the one which receives it (the receiver). Each transaction is verified with the help of the Public Key Infrastructure (PKI) authentication system which serves as the basis of the ICON’s tiered system. In addition, ICON sought to remove the need for having separate virtual machines for its unified smart contract platform, opting for the implementation of its native system called the Smart Contract on Reliable Environment (SCORE) which made it possible in the first place.
Decentralized Exchanges on the ICON Platform
ICON platform runs its native decentralized exchange (DEX) system. As such, it allows for making transactions without the need to do it via centralized exchanges or through third parties. Transactions are executed independently and in real time as part of what is described as a trustless system. Based on this, the system is arguably more resistant to bugs, hacking attacks and server failures as the problems which often plague centralized exchanges. In addition, the ICON’s DEX system defines the currency reserves for each community on the platform, making it possible for them to use the ICON’s ecosystem for making transactions in real time.
Decentralized exchange on the ICON network also uses its own artificial intelligence (AI) analysis model which helps with the management of currency reserves and exchange rates. This is achieved by having the system analyze data related to the transaction frequencies, prices for various cryptocurrencies as well as the total call volume. Once the analysis is done, the AI is capable of modifying the relevant exchange rate and reserve parameters for each crypto, with the proclaimed aim of ensuring the system’s stability.
In addition, ICON’s implementation of AI also handles the platform’s Incentives Scoring System or the IISS, which is based on the DAVinCI financial solution. The ISSS system should be capable of calculating rewards for each node based on the parameters such as its C-rep standing, the ICX token’s exchange volume, the volume of ICX trading that the decentralized exchange handles etc. All of these features should reduce the dependency on the centralized exchanges by the members of the communities which want to trade currencies on the ICON network.
Who is behind the ICON project?
The ICON project was started in 2016 by the employees of the DAYLI Financial Group, a fintech company from South Korea. The development of the ICON platform was its joint project with the Loop Inc., another South Korean tech company focused on blockchain technology.
A team of more than 50 professionals with backgrounds in the blockchain, smart contracts, AI, marketing and design was actively involved in the development of the ICON platform. More prominent individuals include Min Kim as the founder of the DAYLI Group, Sunghwan Kim as the head of the AI department and Gail Kang who was in charge of the marketing. Kim has a decade-long professional experience in data analysis, while Kang has worked in the financial and branding industries.
The advisors on the ICON project include Don Tapscott, co-author of the book Blockchain Revolution and the Chairman of the Blockchain Research Institute. Other advisors include Jason Best, Yiseul Cho, Ismail Malik, Simon Seojoon Kim and others.
The Swiss-based ICON Foundation is an organization in charge of promoting the interests and use of the ICON platform at the global level. Its personnel includes professionals from various fields, such as blockchain, AI and IT security.
Deblock is a blockchain accelerator company founded as part of the ICON project with the goal to invest in and support the implementation of various projects involving the ICON technology. As of October 2018, the implementation of these projects has started in banking, healthcare and insurance sectors in South Korea. The ICON project has also received government support in its native country.
ICX Token Availability
As of November 2018, the ICX coin has a market cap of USD 243 million, down from more than USD 4 billion it had in early 2018. The current circulating supply of the ICX coins stands at more than 387 million units, out of a total of 800,460,000 coins. The ICON’s ICO ended in September 2017 and it managed to raise USD 42,750,000. Half of the available tokens were allocated for the sale, while 16 percent of them was set aside as the reserve. The Foundation received 14 percent of the tokens, with 10 percent of them going to the strategic partners and the same percentage reserved for the team and early contributors.
ICX coins are available and tradable on crypto exchanges such as Binance.