Libra Blockchain by SmartContract Thailand

by SmartContract Thailand
Libra Blockchain Architecture

Libra Logical Data Model
Confidential & Copyright © 2019 by SmartContract Thailand
All data in the Libra Blockchain is stored in a single versioned database. A version number is an
unsigned 64-bit integer that corresponds to the number of transactions the system has executed.
At each database version i, Tuple (Ti, Oi, Si) representing the transaction (Ti), transaction output (Oi),
and ledger state (Si). Given a deterministic execution function Apply:
Apply(Si−1, Ti) → ⟨Oi, Si⟩.
the meaning of the tuple is: executing transaction Ti against ledger state Si−1 produces
output Oi and a new ledger state Si

Ledger State & Address
The Libra protocol uses an account-based data model to encode the ledger state. The state is structured
as a key-value store, which maps account address keys to account values. An account value in the ledger
state is a collection of published Move resources and modules. The Move resources store data values
and modules store code.

create_account(a) → verification/signature key-pair (vk,sk) → a = H(vk)
H = SHA3-256 and
digital signatures with
EdDSA using the
edwards25519 curve
vk = verification key
sk = Signature key – similar to private key
When a transaction attempts to send Libra to an account at address a that has not yet been created:

Ledger State: address (aka a) → value
resource (data value)
module (code)

module
type = 0x56.Currency.T.Here
declared by
To get 0x12 resource =
0x12/resources/0x56.Currency.T
resource

Libra Transaction
Apply(Si−1, Ti) → ⟨Oi, Ei, Si⟩.
• Transaction (Ti) → Transaction script (Move bytecode), and Arguments
• Output (Oi) → New ledger state (Si),
Execution status code, (e.g., success, exited with an error e, ran out of gas, etc.)
Gas usage
Event list (Ei)
• Event list (Ei) → List is a set of side effects produced by executing the transaction. Each event is associated
with a unique key and a payload, which provides detailed information about the event.
Clients of the Libra Blockchain update the ledger state by submitting transactions:

Libra Transaction
In a system where transactions can fail, an event
provides evidence not only that a particular
transaction has executed but also that it had
successfully completed with the intended effect.“

Libra Transaction Structure

Libra Ledger History
There is no concept of a block of transactions
in the Libra ledger history.
“In the logical data model, the transactions occur in sequence without distinction as
to which block contained each transaction. The consensus protocol batches
transactions into blocks as an optimization and to drive the consensus protocol

Libra Transaction Requirement
1. Known initial state. All validators must agree on the initial, or genesis, ledger state of the system. Because
the core components of the blockchain — such as the logic of accounts, transaction validation, validator
selection, and Libra coins — are defined as Move modules, the genesis state must define these modules. The
genesis state must also have sufficient instantiations of these core components so that transactions can be
processed (e.g., at least one account must be able to pay fees for the first transaction; a validator set must be
defined so a quorum of the set can sign the authenticator committing to the first transaction).
To simplify the design of the system, the initial state of the system is represented as an empty state. The
genesis state is then created through a special transaction T0 that defines specific modules and resources to be
created, rather than going through the normal transaction process. Clients and validators are configured to
accept only ledger histories beginning with a specific T0, which is identified by its cryptographic hash. These
special transactions cannot be added to the ledger history through the consensus protocol, only through
configuration.

2. Deterministic. Transaction execution must be deterministic and hermetic. This
means that the output of transaction execution is completely predictable and based
only on the information contained within the transaction and current ledger state.
Transaction execution does not have external effects (e.g., printing to the console
or interacting with the network). Deterministic and hermetic execution ensures that
multiple validators can agree on the state resulting from the same sequence of
transactions even though transactions are executed independently by each validator.
It also means that the transaction history of the blockchain can be re-executed
from the genesis block onwards to produce the current ledger state

3. Metered. In order to manage demand for compute capacity, the Libra protocol charges transaction fees,
denominated in Libra coins. We take the approach of selecting validators with sufficient capacity to meet the
needs of the Libra ecosystem. The only intention of this fee is to reduce demand when the system is under a
higher load than it was provisioned for (e.g., due to a denial-of-service attack). The system is designed to have
low fees during normal operation, when sufficient capacity is available. This approach differs from some
existing blockchains, which target validators with lower capacity and thus at times have more demand to
process transactions than throughput. In these systems, fees spike during periods of high demand —
representing a revenue source for the validators but a cost for the users.
The size of the fee is determined by two factors: gas price and gas cost. Each transaction specifies a price in
Libra per unit of gas that the submitter is willing to pay. The execution of a transaction dynamically accounts
for the computational power it expends in the form of a gas cost. Validators prioritize executing transactions
with higher gas prices and may drop transactions with low prices when the system is congested. This reduces
the demand for transactions under high load.

Executing Libra Write Transaction

6 Steps of Executing Libra Transaction

Ledger

Consensus – Libra BFT

Read Request

Proof of Stake

by SmartContract Thailand
Libra Reserve

What Is the Purpose of the Reserve?
Value Preservation
To drive widespread adoption, Libra is designed to be a currency where any user will know that the value of a Libra today will be
close to its value tomorrow and in the future. Just as consumers in Europe know the number of Euros it takes them to buy a
coffee today will be similar to the number of Euros it will take them tomorrow, holders of Libra, too, can be confident the value
of their coins today will be relatively stable across time.
The reserve is the key mechanism for achieving value preservation. By fully backing each coin with a set of stable and liquid
assets (described later) and by working with a competitive group of exchanges and other liquidity providers, users can have
confidence that they will be able to sell any Libra coin at or close to the value of the reserve at any time. This gives the coin
intrinsic value on day one and helps protect against the speculative swings of other cryptocurrencies. The mechanics of the
reserve and the various actors in the system are described later in this section, but, at the outset, it is important to highlight why
the reserve was created in the first place — to support stability and value preservation.

Where is the money for the reserve
coming from?
The money in the reserve will come from two sources:
• investors in the separate Investment Token
• users of Libra.
The association will pay out incentives in Libra coin to Founding Members to encourage adoption by
users, merchants, and developers. The funds for the coins that will be distributed as incentives will
come from a private placement to investors.
On the user side, for new Libra coins to be created, there must be an equivalent purchase of
Libra for fiat and transfer of that fiat to the reserve. Hence, the reserve will grow as users’ demand
for Libra increases. In short, on both the investor and user side, there is only one way to create more
Libra — by purchasing more Libra for fiat and growing the reserve.

How will the reserve be invested?
Users of Libra do not receive a return from the reserve. The reserve will be
invested in low-risk assets that will yield interest over time. The revenue from
this interest will first go to support the operating expenses of the association — to
fund investments in the growth and development of the ecosystem, grants to
nonprofit and multilateral organizations, engineering research, etc. Once that is
covered, part of the remaining returns will go to pay dividends to early investors in
the Libra Investment Token for their initial contributions. Because the assets in the
reserve are low risk and low yield, returns for early investors will only materialize if
the network is successful and the reserve grows substantially in size.

How is the reserve being held?
The reserve will be held by a geographically distributed network of
custodians with investment-grade credit rating to limit counterparty
risk. Safeguarding the reserve’s assets, providing high auditability and
transparency, avoiding the risks of a centralized reserve, and achieving
operational efficiency are the key parameters in custody selection and
design.

What are the actual assets that will be
backing each Libra coin?
The actual assets will be a collection of low-volatility assets, including bank
deposits and government securities in currencies from stable and reputable
central banks.
The basket has been structured with capital preservation and liquidity in mind. On the capital preservation point,
the association will only invest in debt from stable governments with low default probability that are unlikely to
experience high inflation. In addition, the reserve has been diversified by selecting multiple governments, rather than
just one, to further reduce the potential impact of such events. In terms of liquidity, the association plans to rely on
short-dated securities issued by these governments, that are all traded in liquid markets that regularly accommodate
daily trading volume in the tens or even hundreds of billions. This allows the size of the reserve to be easily adjusted as
the number of Libra in circulation expands or contracts.

How Do Entities Interact With the Reserve?
Users will not directly interface with the reserve. Rather, to support higher
efficiency, there will be authorized resellers who will be the only entities authorized
by the association to transact large amounts of fiat and Libra in and out of the
reserve. These authorized resellers will integrate with exchanges and other institutions
that buy and sell cryptocurrencies to users, and will provide these entities with
liquidity for users who wish to convert from cash to Libra and back again.

Contact
E: hello@smartcontractthailand.com
W: www.smartcontractthailand.com
M: +66-92-996-9546
B: medium.com/@sathapon

Libra Blockchain by SmartContract Thailand

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