Bitpanda Asset Management GmbH, Bitpanda GmbH

9845005X9B7N610K0093, 5493007WZ7IFULIL8G21

Horizen

Horizen is present on the following networks: Horizen, Horizen Eon. Horizen employs a hybrid approach to consensus, utilizing Proof of Work (PoW) for its main blockchain and Proof of Stake (PoS) for its EVM-compatible sidechain, Horizen EON. This combination provides a balance of security, decentralization, and functionality across the Horizen network. Core Components of the Consensus Mechanism: 1. Proof of Work (PoW) on the Main Chain: • The main Horizen blockchain operates on a Proof of Work (PoW) consensus mechanism, similar to Bitcoin. In this mechanism, miners compete to solve complex cryptographic puzzles to validate and add new blocks to the blockchain. This process secures the network by making it computationally difficult and costly for any single entity to alter the chain. • Mining Rewards: Miners are rewarded with newly minted ZEN tokens (Horizen’s native cryptocurrency) and transaction fees for successfully adding a block to the chain. This incentivizes miners to continue supporting and securing the network. • Difficulty Adjustment: To maintain block production at a consistent rate, Horizen adjusts the mining difficulty periodically based on network conditions and the total hash power contributed by miners. • Benefits of PoW: Using PoW provides Horizen’s main chain with a high level of security and resistance to certain types of attacks, such as Sybil attacks. This makes it ideal for Horizen’s public ledger, where security and immutability are paramount. 2. Proof of Stake (PoS) on Horizen EON Sidechain: • Horizen EON is a sidechain running parallel to the main Horizen chain, built as a fully EVM-compatible smart contract platform. This sidechain operates on a Proof of Stake (PoS) consensus model, allowing it to handle decentralized applications (dApps) and smart contracts while ensuring efficient processing. • Validators: In the PoS model, validators are selected to propose and validate new blocks based on the amount of ZEN tokens they have staked. The more tokens staked, the higher the likelihood of being selected as a validator. Validators are responsible for verifying transactions and ensuring the integrity of the sidechain. • Delegation and Staking Pools: Token holders who do not wish to run a validator node can delegate their tokens to a staking pool. This increases the pool’s total stake, enhancing its chance of being selected to validate blocks. In return, delegators earn a share of the rewards distributed by the staking pool. • Slashing: Validators face penalties (slashing) if they act maliciously or fail to meet network standards. This ensures that validators act in good faith and follow protocol rules, securing the sidechain. • Benefits of PoS for Sidechain: PoS on the EON sidechain allows for lower energy consumption compared to PoW, which is ideal for handling high transaction volumes for dApps and smart contracts. PoS also provides quicker block finality, making the EON sidechain highly efficient for smart contract operations. Overall Security and Cross-Chain Interaction: • Interoperability: Horizen has implemented sidechain solutions to allow seamless interaction between the PoW-based main chain and the PoS-based EON sidechain. This enables users to leverage the security of the PoW main chain for ZEN transactions while benefiting from the fast and efficient PoS sidechain for dApp and smart contract use cases. • Cross-Chain Verification: Horizen’s sidechain architecture includes mechanisms to ensure secure communication and consistency between the main chain and the sidechains, which is crucial for asset transfers and maintaining data integrity across the ecosystem. • Horizen Sidechain SDK: Horizen provides a Software Development Kit (SDK) for developers to build custom sidechains that can integrate with the main chain, extending the platform’s versatility and use cases. Horizen EON is an EVM-compatible sidechain within the Horizen ecosystem, utilizing a Proof of Stake (PoS) consensus model to ensure network security and scalability. Core Components of Horizen EON’s Consensus: 1. Proof of Stake (PoS) Model: Validator Selection: Validators are selected to validate and produce blocks based on the number of tokens they stake. The more tokens staked, the higher the chance of being selected as a validator, incentivizing participants to lock up tokens in support of the network. Delegation: Horizen EON allows token holders who don’t want to operate a validator node to delegate their stake to existing validators, sharing in the rewards while contributing indirectly to network security. 2. Cross-Chain Transfer Protocol (CCTP): Interoperability with the Main Chain: Built as a sidechain to the main Horizen blockchain, Horizen EON utilizes the Cross-Chain Transfer Protocol (CCTP) to enable smooth interoperability between EON and the main chain. This structure supports enhanced scalability, allowing assets and data to move seamlessly between chains for greater network flexibility. 3. Finality with Byzantine Fault Tolerance (BFT): BFT Protocol for Block Finality: Horizen EON’s PoS model is enhanced with a BFT protocol that ensures finalized blocks are irreversible. This finality mechanism reduces the chances of forks and secures the network by confirming that transactions in finalized blocks cannot be altered.

Horizen is present on the following networks: Horizen, Horizen Eon. Horizen secures transactions and incentivizes participation through a combination of rewards for miners, validators, and delegators, as well as transaction fees. Incentive Mechanisms to Secure Transactions: 1. Incentives on the Main Chain (Proof of Work): a. Mining Rewards: Miners secure Horizen’s main blockchain by competing to add new blocks through solving cryptographic puzzles. Successful miners receive a reward in the form of newly minted ZEN tokens and transaction fees from the block. This reward encourages miners to contribute their computational power, securing the network against attacks. b. Decentralization Incentive: By using a PoW system, Horizen’s main chain distributes validation work across multiple miners, making the network secure against potential threats like 51% attacks. c. Difficulty Adjustment: The mining difficulty adjusts periodically based on network conditions to maintain a consistent block production rate. This mechanism ensures that mining remains competitive and aligned with the network’s current capacity. 2. Incentives on the EON Sidechain (Proof of Stake): a. Staking Rewards for Validators: Validators on Horizen EON secure the sidechain by staking ZEN tokens. Validators are selected to validate transactions and propose new blocks based on their stake size. Those selected for block production are rewarded with staking rewards and transaction fees from the sidechain. b. Delegated Staking Rewards: Token holders who do not want to run a validator node can delegate their ZEN tokens to staking pools. This increases the pool’s total stake, enhancing its chance of being selected as a validator. Delegators earn a share of the pool’s rewards, incentivizing them to support trusted and high-performing validators. c. Slashing Mechanism: To ensure honest participation, validators face a penalty mechanism known as slashing. Validators can lose a portion of their staked tokens if they act dishonestly or fail to meet performance standards, which encourages reliable validation and maintains network security. Applicable Fees: 1. Transaction Fees: a. Main Chain Transaction Fees: Users pay transaction fees on the PoW main chain in ZEN tokens. These fees are added to the miner’s rewards for each block, incentivizing miners to process transactions efficiently and maintain network stability. b. Sidechain Transaction Fees: On the EON sidechain, transaction fees are generally lower due to the PoS system’s efficiency. Validators receive these fees as part of their rewards, providing economic incentives to keep the sidechain secure and responsive. 2. Smart Contract Execution Fees: a. Horizen EON supports smart contracts, allowing users to deploy decentralized applications (dApps) and interact with them. Smart contract execution incurs fees based on computational resources required, with fees paid in ZEN. These fees incentivize validators to allocate resources to support dApp transactions and ensure efficient processing. 3. Cross-Chain Transaction Fees: a. Horizen supports interoperability between its main chain and sidechains, allowing users to transfer assets and data. Cross-chain transactions incur minimal fees, which help cover the costs of maintaining cross-chain communication and security. Horizen EON uses staking rewards, transaction fees, and delegation incentives to encourage network participation and reliability among validators. Incentive Mechanisms: 1. Staking Rewards: Proportional Rewards: Validators earn staking rewards based on the number of tokens they stake. This incentive structure encourages users to stake tokens and actively participate in network security by operating as validators. 2. Transaction Fees: Additional Income for Validators: Validators receive a portion of transaction fees within the blocks they validate, providing an extra reward for maintaining network operations and efficiently processing transactions. 3. Delegation Incentives: Shared Rewards for Delegators: Users who do not run validator nodes can delegate their tokens to validators, allowing them to earn a share of the rewards. This model broadens participation by enabling passive token holders to contribute to network security through delegation. 4. Slashing Mechanism: Penalty for Malicious Behavior: Horizen EON employs a slashing mechanism to deter dishonest behavior. If a validator fails to fulfill their duties or acts maliciously, they risk losing part of their staked tokens. This penalty encourages validators to act in the network's best interest and uphold reliability and security. Applicable Fees: Transaction Fees: Transaction fees on Horizen EON are paid within each block and distributed to validators. These fees incentivize validators to maintain efficient network operations and prevent spam transactions by attaching a cost to network use.

2024-09-09

2025-09-09

13202.11636 (kWh/a)