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PART 2: Token Functionality and Scaling Morpheus.Network

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Morpheus.Network was designed as a decentralized middleware solution that allows companies to digitizeoptimize

The platform creates a digital representation of a supply chain by turning information into actionable data and notarizing the actions and events and completion of supply chain processes using distributed ledger technology. Just a few examples, to make this concept more understandable:

· Sensor Data, typically found in Internet of Things (IoT) applications: Using data from temperature sensors in cold food chains to ensure adherence to regulations from production to shelf and implement warning systems along the supply chain. Also tracks accountability based on timestamps of transactions (e.g. handover points) that can be used to automate insurance reimbursements.

· Document Handling System: Manually created and signed documents (e.g. Bill of Lading, Custom documents) can now be digitized using advanced technologies, such as OCR and digital signatures. This allows all parties to implement automated cross-checks with documents in workflows.

In any supply chain workflow, a number of intermediate transactions is carried out with documents, at times the workflow also involves transactions that deal with different systems and possibly different blockchain protocols. This requires a need to have a common middleware platform.

The use of a decentralized consensus and notarization platform creates trust and transaction settlement between multiple parties — we refer to it as an immutable data trust layer. Utilizing the immutable nature of DLT, agreements and exchanges between parties are recorded using actionable datasets and predefined conditions (think of it as “if (…), then (…)” contractual agreements).

To drive automation and digitization of processes, we use an event trigger architecture that is based on smart contracts. Involved parties can predefine conditions that have to be met to advance to the next executable step of a supply chain, which can be payments, tracking or sensor data like temperature in a cold chain. Every step in the supply chain represents an event, that Morpheus.Network can automate based on the actionable datasets created. Previously manual information and processes are turned into digitally automated actions. This is where the MRPH token comes into play.

Morpheus.Network provides an interface that allows a user to configure a supply chain workflow with customizable modules. Modules represent steps in the supply chain like a created / signed document, delivery of goods or payments. When modules are executed, they use preset event conditions to check completion and trigger the next module. We achieve this level of automation with smart contracts, using the MRPH token as the fuel to drive the modules. All activities, smart contracts and completed modules are written to the Ethereum blockchain to create a single source of truth for involved parties.

When a user initiates a contract/workflow, a proportional value of the fees in MRPH is set aside to notarize and validate the completed workflow modules. As a notarization network, the Ethereum mainnet is used, which is the main blockchain the Morpheus.Network platform utilizes. Ethereum was chosen based on its native ability to process smart contracts and the fact that it is one of the most secure and widely recognized decentralized networks.

In our pursuit to provide a unified communication layer between different systems and blockchain protocols, Morpheus.Network provides an abstraction layer that leverages multiples distinct and disparate platforms in one place. When the workflow is completed, the data is notarized on the mainnet for all steps pertaining to the specific contract/workflow, leveraging Ethereum gas (the native transaction fee on Ethereum network). The reserved MRPH fee will cover gas price for hashing, the remainder will be moved to a platform wallet.

From a user standpoint, MRPH tokens are used to “pay” for two key functions of the platform: Firstly, automating processes that had to be done manually before, thereby saving time and money. Secondly, notarizing all transactions/datasets in an immutable ledger for all parties to create a single source of truth. The platform creates an immutable Digital Footprint for every single workflow.

2. Scaling

Our SaaS based pricing model is based on volume and varies between clients depending upon needed functionalities and various 3rd party integrations. To achieve full notarization of all supply chain activities, every time Morpheus.Network writes to the Ethereum mainnet, a gas fee occurs and consequently, MRPH has to be reserved to cover the transaction fees.

Using blockchain for data notarization can become expensive, when data such as IoT geolocation or cargo temperature must be notarized. With a number of intermediate transactions coming from various devices and systems (that drive the digital transformation process) and because of the inherent nature of blockchain to notarize all transaction, the transactional throughput accumulates quickly. For a single company executing on an average 20 to 25 workflows in a day, the calculated number of intermediate transactions easily ends up at around 7500 transactions per day. These figure represent enterprises with a complete transformation using a multitude of modules and functionalities.

The Ethereum mainnet can handle about 15 transactions per second, which equates to about 1,300,000 maximum transactions per day. Currently, the network averages approximately 900,000 transactions per day. Fifty companies using Morpheus.Network would claim 375,000 transactions per day. Added to this, there is also a large number of other DApps that are competing to get access to the Ethereum mainnet. Considering over 500 active DApps at any given moment, there is cause for concern of mainnet congestion even putting aside the transactions caused by the Morpheus.Network platform itself. If these transactions are posted for notarization directly to the Ethereum mainnet there can potentially be a huge backlog and bottleneck effect. Gas prices also rise the more congested the network becomes. In return, the costs and performance of the middleware service platform can also be impacted greatly. An example will give more insights:

Calculation example with all transactions running on Ethereum mainnet:

· 7,500 transactions per user (company) per day. Calculated as 25 workflows (x) 20 modules (x) 5 documents in each module (x) 3 API calls/transactions for each document.

· $900 Ethereum gas transaction fees per day per user (company). Calculated as $0.06 avg. gas fee per transaction (x) 7,500 transactions per day (x) 2 for read and writes.

That means that a company (user) would have to spend $900.00 per day to have all transactions notarized on the Ethereum mainnet (in an ideal scenario wherein it is not competing with other DApps to get access). Unfortunately, as Ethereum gas costs scale linear, these costs would accumulate to almost $1 mn per day with 1,000 companies (users) actively notarizing data on the mainnet.

When validating all transactions by all nodes on the mainnet, the platform works inefficienctly and dependency is increased. Also, controlling privacy to sensitive data and facilitating access to data notarization verification becomes more difficult. This leads to a structure wherein a central control needs to be brought in thereby leading to a hybrid public/private blockchain structure.

Morpheus.Network developed a solution to reduce operational costs without compromising on security and trust of notarization services, using a layering / sidechain approach. The goal is to reduce burden and cost of using blockchain in large scale.

To realize the concept, master nodes will be created as local validators in the second layer (aka sidechain) as a separate ecosystem, comparable to an intranet. The notarized certificate (transaction hashes) from sidechain transactions will be bundled and written as a single transaction on the mainnet.

Without master nodes (or sidechains), Morpheus.Network clients will run into major issues dealing with mainnet congestion and thus slowing down or completely halting the entire company’s supply chain. This is of course in addition to the massive increased costs involved in hashing all the supply chain operations on the Ethereum mainnet. The result will be uneconomical costs at scale and a backlog of transactions that cannot be processed.

Morpheus.Network has developed a layered platform that allows abstraction of different blockchain protocols that enable users to leverage the inherent strengths of those blockchain protocols and other systems for leveraging the required transaction data in one, single place.

The Layered platform of Morpheus.Network are open APIs that allow:

· The user (system architect or developer) to select the main chain and sidechain thereby providing the flexibility to optimize the processing required based on the business process.

· The control stays with the DApp developer as part of the ecosystem to configure how the processing should happen on the sidechain. Processes can be configured to extract data from a node in a blockchain instantly or compressed as batch or based on gas fees (or equivalent unit of the blockchain), based on the need of the application.

· The goal is to offer the user full flexibility and control over the process.

In practice, a supply chain workflow can be set up as follows:

· The sidechain is a master node running with a private Ethereum blockchain. Multiple sidechains can come together to build a chain link, collaborating for computation and storage. As a master node, the sidechain has no gas cost or transaction settlement delays (compared to main net).

· From a completed workflow, data to be notarized is passed to asymmetrical encryption and then data is hashed to write on the sidechain, using lossless compression techniques to reduce data volume. Reference of this notarization is returned by the owner and can be shared with other stakeholders as a notarized certificate. Morpheus.Network integrates an API to verify data with the certificate (transaction hash received in previous step) to decrypt and compare the hash.

· A supply chain management DApp built on top of Ethereum involves executing a smart contract including multiple steps in an execution workflow, such as RFID scans, QR Code scans, Geo Tagging or IoT triggers. All data in each step is encrypted, hashed, compressed and notarized on the sidechain. This approach achieves omission of transaction costs and ensures optimal performance. The final posting of the completion of the workflow and all nested steps will be written to the Ethereum main net blockchain.

It should be noted that side chains do not have to be operated on the Ethereum network. Depending on customer needs, other networks can be utilized that are more optimized for privacy (permissioned) or throughput. In this scenario, the Ethereum mainnet is only used as the notarization layer for final validation.

The MRPH token is again the fuel for all transactions and smart contracts, enabling the automation of steps and notarization of data. In other words, for the user there are no changes in architecture required compared to the previous setup.

Calculation example with Morpheus.Network sidechains implemented:

7,500 transactions per user (company) per day. Calculated as 25 workflows (x) 20 modules (x) 5 documents in each module (x) 3 API calls/transactions for each document.

Since all platform transactions occur on the sidechain, the number of transactions required on the Ethereum mainnet drops tremendously, with the notarization for each company costing only a few dollars per day in gas fees vs the $900 figure mentioned above.

Using a private sidechain and master node implementation for notarization, for a single company (user) the cost is much less per day (a few dollars on average) compared to $900.00 per day with all transactions being notarized directly on mainnet. The true impact becomes apparent with more companies (users) utilizing Morpheus.Network services. Instead of transaction costs accumulating to almost $1 mn per day with 1,000 companies (users) as before, they would only be a few thousand dollars per day.

There would have to be a large number of master nodes deployed and depending on the actual supply chain business processes, the quota of transactions on side chains and mainnet might not always be the same. The above numbers are only used to illustrate the benefits of the Morpheus.Network layering approach.

Morpheus.Network helped US Department Of Homeland Security (DHS) tackle the problem of counterfeit products in an Intellectual Property Rights POC (Proof of Concept).

By implementing sidechains, effective transaction costs can be reduced to a minimum by taking away the linear scaling problem of fees in the mainnet. The bundling mechanism allows to share operational costs between users, ultimately reducing costs with more active users implementing sidechains/master nodes and using the platform. Thus, it provides a sound solution to scale the solution in an economically viable way without jeopardizing security or trust of data.

Follow us on our Medium for Part 1, 2 and 3 of this series.

PART 1: MRPH Platform Scalability: Masternodes, Layering And Sidechains

PART 2: Token Functionality and Scaling Morpheus.Network

PART 3: Platform MRPH Token Flow

We optimize and automate supply chains. This is accomplished with our SaaS middleware platform seamlessly integrating legacy and emerging technologies while providing supply chain managers with a digital footprint, providing shipment and item visibility for automating safe and secure supply chains saving time and money.

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