dagger-contracts/Readme.md

Dagger Contracts
================

An experimental implementation of the contracts that underlay the Dagger storage
network. Its goal is to experiment with the rules around the bidding process,
the storage contracts, the storage proofs and the host collateral. Neither
completeness nor correctness are guaranteed at this moment in time.

Running
-------

To run the tests, execute the following commands:

    npm install
    npm test

To start a local Ethereum node with the contracts deployed, execute:

    npm start

This will create a `deployment-localhost.json` file containing the addresses of
the deployed contracts.

Overview
--------

The Dagger storage network depends on hosts offering storage to clients of the
network. The smart contracts in this repository handle interactions between
client and host as they negotiate and fulfill a contract to store data for a
certain amount of time.

When all goes well, the client and host perform the following steps:

    Client                 Host            Storage Contract
      |                     |                      |
      |                                            |
      | --------------- request (1) -------------> |
      |                                            |
      | ----- data (2) ---> |                      |
      |                     |                      |
                            | --- fulfill (3) ---> |
                            |                      |
                            | ---- proof (4) ----> |
                            |                      |
                            | ---- proof (4) ----> |
                            |                      |
                            | ---- proof (4) ----> |
                            |                      |
                            | <-- payment (5) ---- |

  1. Client submits a request for storage, containing the size of the data that
     it wants to store and the length of time it wants to store it
  2. Client makes the data available to hosts
  3. The first host to submit a storage proof can fulfill the request
  4. While the storage contract is active, the host proves that it is still
     storing the data by responding to frequent random challenges
  5. At the end of the contract the host is paid

Contracts
---------

A storage contract can be negotiated through requests. A request contains the
size of the data and the length of time during which it needs to be stored. It
also contains a reward that a client is willing to pay and proof requirements
such as how often a proof will need to be submitted by the host. A random nonce
is included to ensure uniqueness among similar requests.

When a new storage contract is created the client immediately pays the entire
price of the contract. The payment is only released to the host upon successful
completion of the contract.

Collateral
------

To motivate a host to remain honest, it must put up some collateral before it is
allowed to participate in storage contracts. The collateral may not be withdrawn
as long as a host is participating in an active storage contract.

Should a host be misbehaving, then its collateral may be reduced by a certain
percentage (slashed).

Proofs
------

A host is required to submit frequent proofs while a contract is active. These
proofs ensure with a high probability that the host is still holding on to the
data that it was entrusted with.

To ensure that a host is not able to predict and precalculate proofs, these
proofs are based on a random challenge. Currently we use ethereum block hashes
to determine two things: 1) whether or not a proof is required at this point in
time, and 2) the random challenge for the proof. Although a host will not be
able to predict the exact times at which a proof is required, the frequency of
proofs averages out to a value that was agreed upon by the client and host
during the request/offer exchange.

Hosts have a small period of time in which they are expected to submit a proof.
When that time has expired without seeing a proof, validators are able to point
out the lack of proof. If a host misses too many proofs, it results into a
slashing of its collateral.

To Do
-----

  * Actual proofs

    Because the actual proof of retrievability algorithm hasn't been determined yet
    we're using a dummy algorithm for now.

  * Contract take-over

    Allow another host to take over a contract when the original host missed too
    many proofs.

  * Reward validators

    A validator that points out missed proofs should be compensated for its
    vigilance and for the gas costs of invoking the smart contract.

  * Analysis and optimization of gas usage