The Skale token (SKL) is the native cryptocurrency of the Skale Network, an open-source, decentralized network for developing blockchains and decentralized applications (dapps) on the Ethereum network. The Skale Network aims to let developers build their own blockchains that can communicate with the Ethereum network, while avoiding Ethereum’s gas fees and scaling issues.
SKL is an Ethereum-based token that uses the ERC-777 standard. ERC-777 tokens are similar to ERC-20 tokens, but they use “made aware hooks,” which let token transfers occur in one transaction rather than two. The Skale team elected to follow the ERC-777 standard because of its support for token level delegation – a system that allows a user to stake SKL tokens using a delegation key instead of locking up funds in a smart contract – and its backward compatibility with the ERC-20 standard.
In September 2020, the Skale Network launched its token on the ConsenSys Activate platform. It chose that platform because of Activate’s ability to handle the Skale Network’s “proof-of-use” standards. Proof-of-use is a variation of the proof-of-stake (PoS) consensus algorithm. Some 4.14 billion SKL tokens were initially distributed at launch, with a maximum supply of 7 billion SKL. The token distribution was as follows:
• Delegator Allocation (28.1%): The delegator allocation provided SKL to public launch participants, with the remaining supply going to early supporters of the network.
º Public launch participants (4.23%): 3,736 users participated in the public launch, purchasing 167.1 million SKL for $0.03 each.
º Early Supporters (23.87%): Early supporters were provided SKL both pre- and post-launch. Tokens received pre-launch were distributed in three rounds, with varying prices for each token and fixed lock periods between two and five years after the launch.
— Founding Team (16%)
— Core Team (4%)
— Skale Foundation (10%): Skale’s Network of Decentralized Economics (N.O.D.E) Foundation was allocated SKL to support the development of the Skale Network.
— Protocol Development Fund (7.7%)
— Ecosystem Fund (1.3%)
The remaining 33% of the total supply of SKL tokens were reserved as validator rewards in order to encourage network participation. Validator rewards are distributed at a rate of around 9.3% each year and gradually decrease in issuance over seven years.
SKL was launched at $0.03 and never looked back. Although in the first round of the pre-launch, participants were able to purchase SKL for $0.0034 apiece, SKL has never fallen below $0.03, making its launch price its all-time low.
SKL’s price spikes have trended with the token’s listing on exchanges. The token was first listed on Binance at the end of 2020. Following the announcement that SKL would receive its second exchange listing on Huobi, the price of SKL doubled in two days. SKL reached its all-time high of $1.22 in March 2021 following the token’s listing on Coinbase.
How does SKL work?
SKL is a multi-use token that lets holders participate in the network as a validator, stake as a delegator or deploy an “elastic sidechain” or “elastic blockchain” for a period of time as a developer. Validators can stake SKL to run network nodes and earn both fees and tokens. Delegators can delegate their tokens to validators to receive a portion of the validator’s staking rewards. Finally, developers can pay SKL to rent computer resources to deploy their own elastic sidechain through a subscription-based model.
In addition to facilitating participation and activity on the Skale Network, SKL holders can use the token to participate in the network’s on-chain governance system. That means users can vote on proposals that determine the future direction of the project.
The Skale Network functions as both a security layer and an execution layer for the Ethereum. Skale’s white paper outlines how providing those two layers to Ethereum creates an Ethereum-compatible network that is capable of supporting independent blockchains, sidechains, storage chains and dapps.
The execution layer implementation for the Ethereum network provides a fast and secure layer-2 product using elastic sidechains. Elastic sidechains are independent blockchains that provide additional functionality to other “layer 1″ blockchains. What makes elastic sidechains unique is that they create a pool of validators that are randomly assigned in order to assure decentralization. Skale’s implementation of randomness, rotation and incentive-based technologies allow the network to also serve as a security layer for the Ethereum network.
Key events and management
The Skale Network was co-founded by tech entrepreneurs Stan Kladko and Jack O’Holleran, who as of December 2021 were serving as Skale Labs’ chief technology officer and CEO, respectively. The project is maintained by community developers, with improvements voted on using the blockchain’s on-chain governance. The project is maintained by the N.O.D.E. Foundation, which is partnered with Skale’s core team, Skale Labs.
The Skale Network has raised funds from nearly 50 different backers, raising a total of around $41 million. Prior to the SKL token launch, Skale raised $10 million in a Simple Agreement for Future Tokens (SAFT) sale and held an $8.68 million funding round led by Multicoin Capital.
In October 2019, the Skale network raised $17.1 million from Arrington XRP Capital, ConsenSys Labs, HashKey, Multicoin Capital, Winklevoss Capital and others in order to launch the Skale mainnet. Skale Labs contributed $10 million of the funds, with the remaining $7.1 million coming from outside investors.