Handshake is blockchain based, p2p, decentralized and permissionless naming protocol where every peer act as validator and manage a root DNS naming zone. Projects goal is to offer alternative to existing Certificate Authorities and naming system. So, Handshake is actually an extension of the existing centralized naming system and in a way creates a collaboration with it. Unlike its predecessor (Namecoin, Blockstack, ENS ...) Handshake focused on solving the problem of one component of the existing naming system - expand the root zone file and the root servers.
Handshake solution
Existing naming infrastructure are owned by big corporations like Verisgn, Google, Facebook, Twitter and DNS root zone is controlled ICANN. With created naming system, there are 3 problems:
Users can only rent a SLD (second level domain)
Users do not actually have full control over the rented domain names
Current centralized naming system is less secure, because single point of failure
The Handshake project seeks to solve the following problems by acting as an extension on root zone file where TLD (top level domain) ownership information is stored and the root servers with a distributed and decentralized blockchain-based system, which nobody controls and anybody can use. This allows the root zone to be uncensorable and permissionless without centralized third party (ICANN in this case).
Comparison of Handshake DNS with traditional DNS
Blockchain consensus mechanism
Handshake blockchain is based on the POW consensus algorithm. Unlike most blockchain protocols whose services require high scalability, which is why they migrate to alternative consensus, Handshake has no need to increase scalability. This is because the HNS (Handshake native token) is used exclusively for bidding at auctions, transfers and annual renewal of domains, so there is no need for a huge TPS metric.Handshake uses Blake 2B + SHA3 mining algorithm. Handshake ASIC miners are produced by the Goldshell company, and they also offer devices for home mining (less noise, cheapest) so that even "average users" can mine HNS. This is a big plus when it comes to protocol decentralization.
Goldshell HNS miner - GUI
Business model
The Handshake native coin -HNS is used by users to transfer, register, and renew domain names. The coin is necessary to prevent spam on the peer-to-peer network.
In addition to mining, customers can purchase the HNS coin at the Namebase exchange – TLD name registrar. Namebase is onramp for Handshake where you can easily buy and sell HNS as well as bid on, and use. Handshake Currently, it is possible to buy HNS only with Bitcoin, and only for US citizens with USD.
Handshake TLD names can be acquired in several ways depending on the current status of a particular name:
Bidding for name on auction for available names
Purchasing on secondary marketplace where seller determine price
Make an offer for already acquired names
Start auction on your own – make first bid for name you want
A Vickery auction is being conducted for available names. Users bid offer has two parts:
Bid amount – your real offer for name
Blind amount – this amount is for purpose of user strategy
Bid and Blind amounts together presents a lockup amount. In the auction process, only lockup amount is visible to other users competing for the same TLD, which is an excellent prevention of bots and brings a strategic element in the bid process.
After the auction is completed, the users with the highest bid (Bid amount) win the auction and receive a domain name at the price of the second highest bid.
During the auction, all users who are active in the auction lock their HNS (Bid + Blind) and after reaveling results it is returned to their wallets. Only the user who wins the auction pays the achieved HNS price.
Handshake usecase
Handshake has access to cooperation with the current Certification Authorities and starts as a certain extension to the already existing system, but from the position of root server and registration. Since ICNNA charges around $ 200,000 for TLD registration, which is very expensive for average user and most companies register that aim solely to monetize SLDs.
However, another advantage of such an approach is the variety of options that Handshake provides to the user of the purchased TLD. While the current infrastructure is based solely on website TLD extensions, Handshake gives users a choice of an additional set of options:
Create Website
Create dLink
Login with your domain name(ID)
Redirect your name to other domain (URL-shortener)
Sell or gift your TDL domain name
Selling subdomains of your domain name
Create a emailm address on your handshake name
Social networking with your handshake name as username
Handshake has expanded TAM beyond the scope of traditional business domaining (domain trading) and thus enabled the multifunctional use of this digital asset.
However Handshake allows the use of domain names for a wider range of activities in the digital world. Linking Handshake TLDs to social media accounts or logging in to websites is a true innovation, mostly because ownership can be verified on the blockchain.
Tokenomics
Handshake coin (HNS) is a native currency on Handshake blockchain and all transactions, offers and auction bids are performed with it.
The HNS coin can be obtained by contributing to the platform (mostly devs), mining or purchasing through the Namebase exchange.
The initial distribution of HNS is very interesting and completely different from other crypto projects. The vast majority of the initial coin supply was granted to the open source community via airdrop while 33.3% was intended for HNS miners.
Project creators are provided with 5% of the total supply which is below the average for the crypto industry.
Interestingly, 10% of the initial bid is reserved for existing TLDs, the first 100,000 websites according to Alexa ranking, Certified Authority and Registrars. With this move, the Handshake project has justified the claim that it wants to work with the current central entity while at the same time providing users with an option.
HNS Coin supply structure
Regardless of the large pre-mining part of the total supply, the token economy seems to be planned according to the needs of the crypto-system itself.
The protocol’s monetary policy also has a lock and burn mechanism. In auction bidding, the entire offered amount is locked for a certain period (the period depends on the block time), which consequently slows down coin velocity. Decreasing velocity in the token economy consequently increases the value of the coin/token.
Paid HNS amount at auction is burned. Burn mechanism reduces the coin supply and also has a positive effect on the value of the HNS coin.
Team and Investors
The people and teams behind the establishment and construction of the Handshake project are all veterans in blockchain technology behind which are many successful projects:
Joseph Poon - Creator of Lightning Network Protocol
Andrew Lee - CEO and Co-founder of Purse
Christopher Jeffrey - CTO at Purse and contributor at Handshake
Boyma Fahnbulleh - Bcoin and HNS contributor
Handshake Alliance
Namebase team
The list of investors in the Handshake project is quite long and the most important VC funds and individuals are:
a16z VC fund
Sequioa Capital
Boost VC
Pantera Capital
Polychain Capital
Draper Associates
Hashed VC fund
Meltem Demiros
Bobby Lee
Useful sources about project
Website
Namebase
Knowledge Base
Github
Explorer
