The Saga Protocol is revolutionizing the way blockchains are deployed through its product, Chainlets, which are automated, high-performance blockchains that are interoperable and customizable within the Saga ecosystem.
Project name: Saga
Project Type: L1
Code: $SAGA
Cryptocurrency ranking: 221
Market Cap: $22.5M
Fully Diluted Value (FDV): $3.6B
Circulating Supply: 90M (9%)
Total supply: 1B
Max Supply: ∞
introduction
Modular blockchain provides solutions to the difficulties in achieving decentralization, security, and scalability in blockchain technology. This innovative approach distributes the basic functions of blockchain, such as execution, settlement, data availability and consensus, across specialized networks. Unlike traditional blockchains that rely on a single network to handle all operations, modular blockchains separate these tasks, significantly increasing the efficiency of each function.
Modularity is a promising path to improve blockchain scalability, addressing the key issues of decentralization and security that many blockchain projects are actively exploring and developing. Since Celestia was founded, the modular space has seen the development of various solutions such as shared sequencers, verification systems, interoperability protocols, order flow abstraction projects, and infrastructure providers like rollup frameworks and Rollup-as-a-Service (RaaS).
Source: Celestia
One notable project is Saga, a modular Layer 1 platform tailor-made for the gaming industry that has recently emerged as an innovative player in the crypto space.
Saga Overview
Launching a blockchain can be complex as it requires developers to deal with various technical aspects of blockchain infrastructure. The Saga Protocol simplifies this process by providing Chainlet, a dedicated blockchain that developers can launch as easily as deploying a smart contract. This solution integrates key elements such as data availability, consensus, execution, and settlement to create a seamless product experience. By integrating these components, Saga not only saves developers time, but also reduces the complexity typical of modular systems.
The Saga protocol runs on a fully decentralized proof-of-stake model, ensuring that each Chainlet maintains the same high security standards as the Saga mainnet and uses the same set of validators.
Saga’s influence is evident in its rapid growth. In less than two years, it has successfully attracted 350 projects, 80% of which are focused on the gaming industry. Strategic partnerships with industry leaders such as Polygon, Avalanche, and Celestia further highlight Saga’s ability to effectively scale infrastructure and support a wide range of blockchain applications.
Saga Architecture
Chainlets
The Saga Protocol is revolutionizing the way blockchains are deployed through its product, Chainlets, which are automated, high-performance blockchains that are interoperable and customizable within the Saga ecosystem.
These Chainlets are protected by the Saga blockchain and are validated and protected by a shared security model called "Interchain Security". This model enables Saga to provide security guarantees for its Chainlets, ensuring that they have the same level of security and decentralization as Saga itself, functioning similarly to the Cosmos SDK application chain, but without the need to manage a validator set on its own.
Source: Saga
Chainlets provide developers with a decentralized and secure way to deploy application-specific blockchains, allowing developers to freely choose the virtual machine of their preference. This flexibility was highlighted at the Saga Multiverse Summit, with the launch of Saga Realms, which enables developers to launch customizable chains on Saga with different features and services, such as technology stacks, security sources and their related obligations. Under the Realms framework, the standard Saga Chainlet will become one of the many fields supported in the future, including services for Saga partners Ethereum (Ethlets), Polygon, Avalanche, Celestia, etc.
Compared to the replication safety mechanism used by the Cosmos Hub, the process of launching a Chainlet is uniquely permissionless. Developers only need to pay the cost of setting up and maintaining their Chainlet using $SAGA tokens, which is similar to using subscription services from providers such as Amazon Web Services, but the payment method is $SAGA tokens.
Safety chain
The Security Chain is the main source of security for the Saga Protocol and uses the Cosmos-SDK. It is responsible for the minting, staking, and potential penalties for validator misbehavior of $SAGA tokens.
Platform Chain
The platform chain is also built on the Cosmos-SDK and is where developers launch and manage their Chainlets. It brings together multiple security sources including the security chain and extends security to Chainlets through a process called cross-chain verification (CCV), while reporting any reported misconduct back to the security chain for potential penalties.
Initially, the platform chain will primarily obtain security from the Saga security chain, but plans to incorporate additional security sources including Ethereum, Polygon, Avalanche, and other validators in the future.
Teams, Adoption and Alliances
The Saga team is led by a group of dynamic and experienced co-founders:
Jin Kwon, co-founder and chief strategy officer, was formerly vice president of Ignite and holds a master's degree in computer science from the University of California, Berkeley.
Jacob McDorman, co-founder and CTO, previously co-founded software consulting company Cellaflora and holds a bachelor's degree in mathematics from Purdue University.
Bogdan Alexandrescu is a technologist and entrepreneur active in the Bitcoin Foundation and multiple blockchain projects.
Rebecca Liao, Co-founder and CEO, is also the co-founder of Skuchain, a global trade blockchain. Under her leadership, Skuchain has achieved annual transaction volume of over $5 billion and was named a top blockchain company by the World Trade Organization in 2020.
As of April 26, 2024, the Saga Innovator Program includes 350 projects, 80% of which focus on the gaming sector, 10% on NFT and entertainment, and the remaining 10% on decentralized finance (DeFi). These projects leverage Saga's technological innovations and expand its blockchain applications.
Saga has partnered with several leading blockchain protocols to enable scaling with its Chainlets technology:
XPLA and Com2uS: In November 2022, Saga partnered with XPLA to provide scalable infrastructure for gaming-specific chains.
Celestia Labs: In January 2023, Saga began implementing a sequencer as a service, collaborating with Celestia to scale the convolutional architecture.
Polygon: In February 2023, we will collaborate to automate the super network and promote the deployment of application chain solutions.
Avalanche: In April 2023, Saga automated the instantiation of subnets, enhancing the deployment of application chains.
Saga Origins was launched in March 2024 and is dedicated to bringing Web3 games to market. The division actively supports game developers at every stage, from initial concept to final release. To promote success, Saga Origins provides a range of services including working with influencers to increase visibility, financial support for user acquisition, and extensive promotional support to maximize impact and engagement.
Token Economics
The $SAGA token has multiple uses in the Saga protocol. It is the currency that developers use to pay network validators when launching and maintaining Chainlets. It is also a way to reward users who stake tokens to support network security. In addition, holding $SAGA also gives users voting rights on future decisions of the network. Initially, one billion $SAGA tokens will be issued, of which approximately 90 million, or 9%, will be released at the Token Generation Event.
The market cap is $22.5 million and the fully diluted value is $3.6 billion. The number of tokens in circulation is currently 90 million, which is 9% of the total supply of 1 billion.
Token Allocation:
Source: Cryptorank
Token issuance plan:
Source: Binance Research
Financing History
In October 2021, the company successfully raised $2 million with investment from Ignite. The following year, on May 19, 2022, it successfully raised an additional $6.5 million in a seed financing round, with investors including Hypersphere Ventures, Maven 11 Capital, SamsungNext, Merit Circle, Polygon Studios, and LongHash Ventures. On November 20, 2023, it raised another $5 million in an extended seed round, led by Placeholder Ventures and supported by LongHash Ventures, Com2uS, Red Beard Ventures, Dispersion Capital, and Tykhe Block Ventures.
In addition to these successful funding rounds, Saga’s landmark launch on Binance surpassed all previous launch pool records on the platform, attracting over $13 billion in funding in less than 24 hours.
Bullish fundamentals
Modularity is critical: Modularity is the key to solving the challenges of scalability, decentralization, and security in blockchain technology. As an early adopter of this model, Saga will benefit greatly once this model becomes widely accepted.
The rise of the game finance industry: Game Finance (GameFi) has become one of the most promising industries in the digital asset field, and Saga is investing significant resources in this area to ensure that it occupies a prominent position in the industry.
Strategic Partnerships: Saga has established strategic partnerships with key blockchain entities such as Polygon, Avalanche, and Celestia. These partnerships strengthen Saga’s technology infrastructure and broaden its ecosystem, enhancing its ability to support scalable and efficient blockchain applications.
Received significant investment: Saga has received significant investment from well-known investors, providing the necessary financial stability to support its continued development and expansion. Saga's record launch on Binance highlights its market credibility and potential for success, which is supported by the extensive community participation and strong confidence of investors.
Bearish fundamentals
Fierce market competition: The blockchain sector, especially the gaming and decentralized finance (DeFi) markets, is highly competitive, with many established players and emerging new entrants. Saga's success depends on its continued innovation and its differentiation from other blockchain platforms in terms of improving scalability and efficiency.
Highly volatile market: From an investment perspective, the cryptocurrency market is extremely volatile and very sensitive to macroeconomic factors, liquidity cycles, and economic news. Despite the high potential of the technology and Saga, the speculative nature of the market often obscures its actual use and demand.
Regulatory and Legal Risks: Regulatory changes or legal developments that are unfavorable to cryptocurrencies could impact Saga’s operations, particularly in key markets that are critical to its growth.
Conclusion
As blockchain evolves, Saga is a notable player in modular blockchain technology, especially in the gaming space, which enhances efficiency, security by dividing different blockchain functions into specialized networks and scalability, the importance of Saga is particularly prominent. The introduction of Chainlets and its commitment to scalable, interoperable and cost-effective infrastructure positions Saga not only to meet the current demand for blockchain solutions, but also to profoundly impact the future development of decentralized applications. Saga’s commitment to progress and innovation marks it as a key and noteworthy entity in the blockchain ecosystem.
