Chia Network has recently updated the Github repository where they store their CHIPs (Chia Improvement Proposals) and added a few critical ones that will help define the state of Chia over the coming year. I am going to go through them one by one to help get myself, and everyone else, up to speed.
CHIP-0001 is simply the first CHIP that outlines the actual CHIP process. This is what Chia Network released with the CHIP process and has been discussed before. However, if you want some background on what the CHIPs should be going through in terms of development and review its a good place to start.
CHIP-0002 is a proposal initially spearheaded by Dimitry of Goby Wallet, and describes a Decentralized Application protocol (dApp API) to allow for more seamless integration between web wallets and the Chia network nodes. The discussion on Github is both excellent, and very technical, but if you are interested in learning more you should visit this commit discussion.
As this is still in active development, there is no documented CHIP as of yet – that is still being worked on. If you want to see what that process looks like, there is a YouTube video of a developer discussion that took place where Dimitry was able to present his proposal and get feedback from it.
I’m not a developer, but my personal thoughts on this are that it could be done with middleware that sits on top of a node rather than direct node changes, however that might not fit the philosophy of decentralization and would leave a requirement for people to run that middleware for reliant web wallets to interact with dApps. I’m going to think on this one, because adding new base protocols and APIs to every node should be considered very carefully and all alternatives considered first.
CHIP-0003 is a proposal to add a minimum transaction fee setting, along with a default cost, to the Full Node code and configuration. This has been discussed a lot, by many people since the first dust storms began and has been a hotly debated topic. This CHIP is a concrete solution proposal to that problem, and we’re going to take a moment to discuss the implications.
First, if you are planning on transacting on the Chia blockchain as a consumer or developer you should be very familiar with this. This will affect NFT pooling and farming, as you will need to attach transaction fees to change pools or claim rewards. The fees being proposed are very small (about 10 million mojo for a standard transaction as a default) but forcing any fees at all will be a change that affects all aspects of interacting with the Chia blockchain network. This will also affect developers of all current Chia enabled software products and has the possibility of deprecating wallets or software that isn’t under active development.
There is an alternative proposal that would do all the technical work but leave the default at 0 – allowing people to decide if they want to participate in or simply drop dust storm transactions but I feel that has a bigger chance of causing problems then just updating everything to require transaction fees. One of the new RPC commands proposed by the CHIP is geared towards getting exact required transaction fees based on the cost of the transaction and that should make a lot of the switch seamless to the userbase without having to split the network into “tx fee required” and “no tx fee required” nodes.
This is an interesting one and has a lot of implication for the future of the network. I think I support this change but there are certainly edge cases I am not considering. Please put any concerns you have in the comments here and see if we can spark a discussion, or swing by the Chia Plot discord and give us your thoughts there.
Now we are getting into the real meat of the CHIPs meant to expand the utility of the Chia Blockchain. CHIP-0004 details out the Distributed Identifier support that Chia Network will be bringing in shortly. DIDs are a pretty top topic in the Identity Management world, with more opinions and questions than solutions and answers.
Because Chia Network has committed to following the current W3 draft specification for Distributed Identifiers not all of the information necessary to digest their reasoning behind decisions and why they are doing things without understanding the complete draft proposal.
This is actually a really big deal for blockchain acceptance in the broader finance world, because the inability to explicitly identify the owner of a wallet is a major hurdle for a lot of traditional transactions. Banks and registered entities cannot support self-custody solutions without running afoul of international anti money-laundering laws, but transactions to a registered DID would satisfy the requirements if implemented properly.
As DIDs get closer to production I will be paying more and more attention to them, because a working public identity system has inherent usefulness beyond what traditional blockchains offer. Also, I am very glad that they have gone with a single file format for the DID metadata standard as there was a big fight at the W3C about this regarding DIDs last year. The other concern was about the environmental impact of tying DIDs to blockchains, but I think Chia covers that concern fairly well.
And finally we have CHIP-0005 which details out the NFT1 standard coming to Chia soon. This standard will determine how NFT projects like Space Marmots and Marvelous Marmots operate as well as the “fine art” NFTs (I argue both Marmot projects qualify) that Chia Network is targeting as well as use cases we have only rambled about on Twitters spaces.
This is of prime interest to me, so I am paying very careful attention to developments in this space. The important thing is that all promises that have been made regarding the standard have been kept, including some cool new concepts. For example, there can be multiple royalty addresses with custom percentages. This makes collaborating on NFT projects a lot more enticing as trustless payments can be encoded directly into the royalty field.
They will also support payments and ownership by DID address as well as by XCH address, which will mean that ownership can be moved with the DID itself and won’t be relegated to a single key or account like other NFT standards. And because of the nature of the coin model over the Ethereum account model, NFTs are not just results from a smart contract but are independent coins themselves on the blockchain. This means that interactions with NFTs and NFT marketplaces will carry far fewer risks than we see with Ethereum based blockchains on OpenSea. This is paramount to widespread adoption because right now holding important assets as an NFT there is crazy. Between UTXO and offer files NFT transactions should be much safer and should never require authorizing access to your entire wallet.
Speaking of Offer Files, CHIP-0005 also details out “Offer files 2.0” which will support NFTs and royalty payments, and will really up the security game when transacting NFTs. Really its not even a contest, and if anyone involved in NFTs thinks about it for a second permissionless transactions and sales are the only way this works without the gatekeeper (OpenSea in this case) eventually accepting liability for stolen assets on their platform. NFT1 and Offer Files 2.0 avoid this fate entirely but allowing a marketplace like MintGarden.io to sidestep the liability problem entirely by never taking control of the assets.
Overall, I think the current CHIP processes are important additions to the Chia Network and I’m really excited to see them being detailed out on Github. The discussion process and information management process could do with a lot of work to organize discussions, but its a huge step forward over most other projects and shows a level of maturity that speaks to long term success.