What is Saga Protocol? How Does it work?

What is Saga Protocol?

Saga is a new layer-1 blockchain with focus majorly on gaming. It is not associated at all with Saga Mobile. Saga is a protocol for automatically setting up blockchains tailored to specific applications. This is created by reconstructing how developers and end users interact with blockchains. Through the utilization of mutual security, advancements in validator coordination, and a streamlined deployment process, Saga simplifies the process of releasing a specialized blockchain, known as a Chainlet, to the level of deploying a smart contract.

Its network is most effectively used as a layer for scaling web3 infrastructure.
Every Chainlet mirrors the Saga Mainnet, featuring identical validator set and security model.
Saga’s goal is to facilitate the growth of the next 1000 chains in the gaming and entertainment industry within the expanding Saga Multiverse.

Saga was founded by Rebecca Liao (CEO), Jin Kwon (CSO), Jacob Mcdorman (CTO), and Bogdan Alexandrescu (VP of Engineering). Rebecca is known for successful startups in crypto and AI, Jin for work in the Cosmos ecosystem, Jacob for product ventures, and Bogdan for engineering leadership roles at Apple and Twitter.

How Does SAGA Work?

In Saga, developers of smart contracts engage with the Saga Mainnet to ask for a Saga Chainlet. A Saga Chainlet is a blockchain designed for a specific application, protected by Cosmos Interchain Security (ICS), with security provided by Saga mainnet validators. The validators in Chainlets operate under the same rules as Saga’s Mainnet validators, creating blocks while verifying that all other validators adhere to a preset service-level agreement (SLA).
The terms of this Service Level Agreement (SLA) cover uptime expectations, operating relayers and services, and verifying correctly without signing twice. If a validator breaches the SLA for a Chainlet, proof is communicated by other validators through Inter Blockchain Communication (IBC) back to the Saga Mainnet.

The network will reduce the staked SAGA tokens of the validator who breached the SLA. With ICS, each Chainlet is automatically secure through Saga’s Mainnet without requiring its own staking token.

In Saga, a Chainlet has the option to utilize different Cosmos SDK modules, such as virtual machines like EVM, Cosmwasm, SolanaVM, MoveVM, and their variations from various projects like Juno, Osmosis, and Aptos. Each Chainlet is assigned its own VM which is installed on a separate chain. To activate, a developer just needs to ask for a Chainlet launch on Saga Mainnet.

What Makes Saga Protocol Standout?

Saga protocol claims to be the only L1 that has introduced L1s, aiming to provide developers with limitless horizontal scalability. Every Saga Chainlet comes with the following characteristics:

• Limitless horizontal scalability: Each Chainlet functions as an independent appchain instance, enabling applications to flexibly expand to their maximum performance and velocity.
  Developers have the option of selecting their preferred monetization model, which may include their own token, fiat currency, stablecoin, or another ecosystem’s token, and benefit from free transactions and affordable chain fees. The fees for all Chainlet transactions are determined through a daily reverse auction involving validators, promoting competitive pricing for block space.
  Automation enables developers to easily create a Chainlet in the Saga WebApp with just a click of a button.
• Interoperability and rapid bridging: Users have the ability to easily and swiftly move assets between Chainlets, as well as Saga and other ecosystems, through automatic interoperability and asynchronous composability. Due to the quick finalization of transactions in every Chainlet, users can also benefit from quick bridging to other chains.
  Completely adaptable stack: Developers have individual chains for maximum flexibility and customization of the environment.
• Diverse project environments: Saga supports creativity in various fields, from gaming to Decentralized Finance (DeFi).

SAGA Token

SAGA is the primary token of Saga protocol. Saga aims to address high transaction fees in cryptocurrency by shifting the burden to developers who must pay fees using SAGA tokens. Developers need to pay a deposit of SAGA tokens for computing power and consider how to fund additional power as the deposit diminishes.
Half of the 90 million initial circulating supply of SAGA tokens was offered to Launchpool participants. The purpose of SAGA is not just to incentivize interest in the project but to create a new fee model for developers using the token.
Saga’s tokenomics are split into two parts: the front-end and the back-end.

Front-end (End-user to Developer)

This part emphasizes the communication between users and developers. Contrary to traditional models where users cover network fees, Saga enables developers to set the fee system for their applications. This adaptability enables developers to test out different monetization methods, like freemium or subscription models.

Back-end (Developer to Saga Mainnet)

Developers use Saga tokens to pay for chainlet provisioning on the Saga Mainnet. This procedure is similar to how developers set up resources on platforms such as Amazon EC2. Developers have the option to select from different subscription tiers, each providing a distinct level of compute capacity. A higher capacity results in higher costs, while longer commitments can receive discounts.

The mainnet of SAGA Protocol was released on April 9, 2024, with 1 billion SAGA tokens generated initially. The token supply’s inflation is influenced by SAGA’s tokenomics and aims for an annual rate of around 7%.