What is ICON and the ICX Token?

Ivan On Tech

Written by Ivan on Tech

September 19, 2021

Established by the ICON Foundation and maintained by the ICON Republic, ICON Network is a cross-chain interoperability network that bridges multiple blockchains without friction using the native ICX token. The underlying Loopchain technology powers the ICON blockchain protocol using the LFT (Loop Fault Tolerance) consensus mechanism. Plus, Community Representatives (C-Reps) and Public Representatives (P-Reps) govern the platform, representing native blockchain communities and performing governance tasks for the ICON crypto ecosystem known as the ICON Republic.

In this article, we’re going to dive deep into the ICON crypto ecosystem. We’ll explore the ICON Foundation, the ICON Republic, and the native ICX token. Plus, we’ll discuss the core technologies at the heart of the ICON blockchain interoperability network. 

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What is the ICON Network?

ICON is a highly interoperable, Turing-complete smart contract-enabled public blockchain protocol and aggregator chain established by the ICON Foundation in 2017. The native cryptocurrency of the ICON crypto ecosystem is the ICX token. 

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Icon implements a high throughput blockchain engine powering the ICON Network, using technology by industry experts, ICONLOOP. The name for this technology is “Loopchain”, aptly receiving its title from its development team. ICONLOOP is also responsible for the development of the ICON interoperability protocol and consensus algorithm, “Blockchain Transmission Protocol” (BTP).

ICON Network uses a Delegated Proof-of-Stake (DPoS) consensus model operated by just 22 nodes. These nodes, known as Public Representatives (P-Reps), are responsible for the production and validation of all transactions throughout the network. Furthermore, ICON Network can process and store up to 1,300 transactions every two seconds. This high throughput is partly thanks to the proprietary LFT (Loop Fault Tolerance) consensus mechanism that supports Byzantine Fault Tolerance (BFT).

The goal of the ICON crypto ecosystem is to facilitate high levels of interoperability between independent blockchains while enabling real-time transacting using ICON’s “Network of Networks” along with the ICX token. 

The ICON Foundation and The ICON Republic

The ICON Foundation is responsible for key activities such as marketing and developing the ICON protocol. The broader ICON community is known as “the ICON Republic”. The ICON Republic consists of Community Representatives (C-Reps), Public Representatives (P-Reps), and Citizen Nodes. These network participants are essential for the governance and interconnectivity of the ICON blockchain protocol. However, they do not directly engage with the governance of individual blockchain networks.

How Does ICON Network Operate?

The ICON Network combines various innovative technologies to provide a seamlessly interoperable bridge between blockchain networks. Below we discuss some of the core features of the ICON cryptocurrency network.

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Loop Fault Tolerance (LFT) Algorithm

ICON’s technology uses the proprietary Loop Fault Tolerance (LFT) consensus algorithm to optimize performance and enable sustainable scalability. Also, LFT supports the Byzantine Fault Tolerance (BFT) consensus mechanism and is an extension of the Tendermint BFT middleware. Plus, LFT helps to minimize communication errors and malicious actors throughout the network.

ICONLOOP

ICONLOOP is a strategic partnership between ICON Network and the LINE blockchain. The partnership aims to “create synergies” between the two platforms by providing LINE’s 300 million monthly average users (MAU) with access to ICON’s technology. The joint venture will facilitate enhanced business and technological developments. Plus, it will help create a range of advanced decentralized applications (dApps) for various use cases.

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The LINE blockchain platform, or “LINK Chain”, is operating using the LFT (Loop Fault Tolerance) consensus algorithm and the “SCORE” smart contract module (Smart Contract on Reliable Environment). Soon, we can expect updates to LINK Chain that include additional elements of ICON’s technology.

Loopchain

Developed by ICONLOOP, Loopchain is the proprietary blockchain that underpins the ICON crypto network. Loopchain is an enterprise-grade “hyper-connected” blockchain service with use cases spanning across several industries. This includes healthcare, finance, digital payments services, and ​​the CHAIN ID authentications system launched in partnership with Korea financial investment association.

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Also, Loopchain is the first-ever blockchain company to win the grand prize in the Korea SW Product Quality Award. Plus, Loopchain supports multiple consensus mechanisms and boasts multi-channel support with cross-chain interoperability.

ICX Token 

The ICX token is the native cryptocurrency and multi-utility token of the ICON blockchain ecosystem. The ICX token is the single unit of exchange within the Icon crypto ecosystem. It is essential for paying transaction fees and interacting with decentralized applications (dApps) on the ICON blockchain. Plus, ICX token holders can choose to partake in various staking features as part of ICON’s Delegated Proof-of-Stake (DPoS) consensus mechanism. At the time of writing, the ICX token is trading at around $1.93 with a market cap of $1.2 billion, according to CoinGecko.

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Icon Token (ICX) Staking

By locking up ICX tokens, holders can participate in ICX staking. ICX staking provides one of the highest staking rewards available natively through any blockchain. Stakers can earn 10.6% annually per ICX token. This means that by staking more ICX tokens, participants can earn more rewards. 

Also, staked ICX tokens are delegated to a Public Representative (P-Rep). Only by delegating staked ICX tokens can stakers receive rewards. However, delegated ICX tokens do not go to a P-Rep’s address or a smart contract. Instead, they remain within the custody of ICX stakers. The lock-up period for ICX staking varies depending on network activity. Currently, the lock-up period is approximately eight days. Moreover, ICX staking is essential to the growth of the network and can be a great way to make a passive income with crypto!

ICON Network Governance

Network participants known as Community Representatives (C-Reps) and Public Representatives (P-Reps) are responsible for the governance and block generation of the ICON blockchain network. A C-Rep represents a Community within the ICON Network. The election of C-Reps takes place autonomously within each respective Community rather than via the ICON Foundation or the ICON Republic. However, P-Reps are ICON blockchain participants known as “ICONists” who don’t have specific ties to any specific Community. Moreover, P-Reps receive election votes based on their contribution to the ICON blockchain network or the number of delegations they receive from other ICONists.

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Also, Representatives of both types must meet an “I_Score” using the ICON Incentive Scoring System (IISS). The ISS is a crypto-economic mechanism and decentralized autonomous organization (DAO) that measures different types of network contributions and coordinates incentives for the growth of the ICON crypto network. Also, the Contribution Proposal System (CPS) is a community fund under the management of the ICON blockchain community. The aim of this fund is to direct funding towards projects and developers to help expand and increase the adoption of the ICON crypto ecosystem and increase the value of the network.

Public Representatives (P-Reps) manage two types of on-chain governance. These are Governance Variables and Network Proposals. While Governance Variables inform the economic mechanisms of the network, Network Proposals refer to the parameters of the reward mechanisms for ICON nodes. Holders of the ICX token can delegate their votes to P-Reps and receive a Delegation Reward in return. Also, Citizen nodes are participants that do not take part in protocol governance but can query transactions on the ICON blockchain.

Icon Network Interoperability 

Blockchain Transmission Protocol (BTP) is a proprietary technology that provides interoperability for smart contracts and decentralized applications (dApps) across multiple blockchains. When deploying a smart contract on the ICON Network, BTP enables the contract to interconnect with various blockchains.

Furthermore, ICON uses a Delegated Proof-of-Contribution protocol that allows “22 fluid public Representatives to produce and validate blocks while participating in governance” across different chains. This makes the ICON crypto ecosystem one of the largest decentralized networks globally.

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Moreover, Icon’s interoperable technology is available beyond solely to public blockchains. It aims to connect both public and private blockchains by enabling them to interact via smart contracts throughout the ICON crypto ecosystem. As such, ICON’s technology boasts a broad range of use cases, from decentralized finance (DeFi) to enterprise applications.

Developer Tools and Resources

ICON Network also provides a range of developer tools and resources to help foster the platform’s development community. This includes T-Bears, a development tool suite that includes templates for building SCORE smart contracts quickly. Also, each ICON node in the network provides JSON-RPC application programming interfaces (APIs). These APIs support Java, Python, JavaScript, and Swift programming languages and can be used for sending raw JSON-RPC (remote procedure call) requests.

Another useful resource ICON provides is ICONex Connect. ICONex Connect is a protocol that enables third-party applications to transact with ICX tokens using the native ICON wallet. Furthermore, ICONex Connect supports iOS, Android, and the Chrome extension.

Exploring ICON Blockchain & ICX Token Summary

Thanks to the award-winning Loopchain technology and Blockchain Transmission Protocol (BTP), the ICON crypto ecosystem and the ICON Republic are aiding interoperability between blockchains and making it easier than ever to build and use cross-chain applications for a wide range of use cases. Plus, the high throughput ICON blockchain provides near-instant transaction finality for use with both public and private blockchains. Moreover, the ICON aggregator chain facilitates interconnectivity between networks, opening doors to a connected, unified blockchain industry.

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