$15 Million Venture Proposed By Ethereum Foundation For Verifiable Delay Functions

Verifiable Delay Functions (VDFs) is a new technology that the Ethereum foundation is examining, offering an unpredictable and unbiased computer-generated response system. Ideally, VDFs would be used in a “proof-of-stake” (PoS) system, and Ethereum is aiming to implement it in Serenity, which will be the next stage of the network in the coming years. To introduce this technology, the Ethereum Foundation is aiming to lead a $15 million venture to fund the work.

Since this technology is capable of creating randomized secure numbers, the inclusion of it into Serenity would make it possible to use it with any dApp, considering the anchor of Ethereum in so many applications. While discussing the current studies on the VDF technology, an Ethereum Foundation researcher named Justin Drake said,

“We’re basically doing all this groundwork to make an informed go, no-go decision on the bigger project. The bigger project is 15 million dollars on that order of magnitude. So, we want to make sure that if we do go ahead it’s going to be successful.”

As far as the financial work on the project, Drake said that the foundation would need to take a multilayered approach. He added,

“To an extent, we need the buy-in from the wider Ethereum community that this is a good idea and that the foundation should be spending this money. This is something where we can reach rough consensus on public calls.”

At the moment, there are multiple tests that need to take place before the technology is even allowed to be integrated into Serenity. One such test, the RSA ceremony, involves hundreds of random individuals around the world to participate as the technology’s security for random number generation is tested, using a VDF.

Along with the RSA ceremony, a competition will be hosted for participants to create and test ASICs in the running of VDF computations. Explaining, Drake said,

“In the VDF, we basically need an ASIC which is very low latency, that is very fast. The so-called circuit – the way transistors connect in the ASIC – needs to follow a clever algorithm … We don’t need it to be the fastest in the world, just fast enough.”

Other than the Ethereum Foundation, the Chia decentralized app has just finished a VDF open circuit competition, which is the first of its kind. The participants that qualified for awards were provided with a cut of $100,000. Now, Chia is preparing for a second round, by “incorporating the solutions from this first round.”

Bram Cohen, the co-founder of Chia, said, “If we don’t do a great job of optimizing performance … there are likely to be sudden jumps in performance of the best VDF that anyone has out there post-launch, which could result in significant network instability.” Presently, eleven other blockchain companies are looking at this technology for their own use, and each one has a different way to implement it.

POA Network, an Ethereum side chain, is planning a “public bounty” for implementation, which will include Gitcoin. Other projects include Filecoin, Tezos, NEAR protocol, and ThunderCore. Collaboration between the different companies would be helpful to VDF progress, considering that the technology is “like a fundamental new primitive,” says Drake. At this point, all of the companies are still working individually, though Filecoin had previously agreed to split costs in their VDF work with Ethereum Foundation during a collaboration.

Drake added,

“It’s quite generic in that sense … It would be nice if the industry standardizes around a single VDF, partly because that would make the various blockchain projects more compatible with each other, but it also means that we wouldn’t have to reinvent the wheel and [would collectively] pay less.” He later added, “So the various studies that we’ve just kicked off should take four to six months, but I think that in about four months we’ll be able to make an informed go, no-go decision.”

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