Blockchain economics and Consensus

Why the Reverse Gas Model Is Ineffective?

The reverse gas model is often praised as “user-friendly” because it allows applications to cover transaction costs on behalf of users. However, this model clashes with the economic realities of Web3. Unlike monopolistic Big Tech corporations that can subsidize “free” services by monetizing user data and advertising revenue, most decentralized applications are built by small teams or open-source contributors without perpetual financial backing. Expecting these developers to indefinitely fund user activity creates an unsustainable burden and effectively reintroduces centralized-style cost structures into a supposedly decentralized ecosystem.

Moreover, the “free” model of traditional tech companies comes at the cost of user exploitation—where personal data becomes the product. Web3 was designed to break away from that paradigm by aligning incentives around transparency, ownership, and accountability. Gas fees, while sometimes inconvenient, ensure that users directly pay for the resources they consume—preserving the principles of individual responsibility and economic fairness that underpin a truly decentralized web.

Reverse gas models across ecosystems

Many of today’s blockchain networks are adopting variations of the reverse gas model. For example, the Internet Computer (ICP) uses a reverse gas approach where developers must continuously fund computation and storage costs. Similarly, Polkadot’s model requires projects to purchase core time to secure a parachain slot, effectively imposing perpetual maintenance costs on developers. If a team stops funding or maintaining its slot, the application can simply halt—undermining long-term sustainability.

Agile core time auctions further complicate the issue, as prices can fluctuate unpredictably and are likely to rise with increasing network demand once hundreds of parachains compete for limited capacity. In contrast, smart contract platforms like Solana or Ethereum offer a more durable model: once deployed, applications remain available to users with minimal ongoing infrastructure costs. This permanence aligns better with Web3’s ideals of openness and resilience, without placing continuous financial strain on developers.

Solochain, Parachain and Smart contract

A solo chain provides complete control—something that smart contracts alone cannot offer.

For instance, developers can execute larger computations by extending the block time to 5–10 minutes. While a longer block time may slightly impact user experience, it’s a reasonable trade-off when tackling large-scale or computationally intensive problems. This approach effectively removes many of the computational constraints found in traditional smart contract environments, making it feasible to build systems such as voting platforms capable of supporting millions of participants.

Moreover, developers can leverage zero-knowledge proofs (ZKPs) with large proof sizes—something that most smart contract platforms restrict due to gas limits.

Does a solo chain require shared security?

How many solo chains—i.e., independent blockchains—using Proof of Stake (PoS) have suffered a 51% attack resulting in double-spending?

Based on current public knowledge and documented cases, there appear to be no confirmed instances of a successful 51% attack causing a double-spend on PoS network. Most known incidents involve Proof of Work (PoW) blockchains.

Proof of Work (PoW) — Real Attack Examples

Many well-documented 51% attacks with double-spending have occurred on PoW blockchains, including:

  • Bitcoin Gold (BTG) — attacked in May 2018 ($18 million lost) and again in 2020
  • Ethereum Classic (ETC) — attacked in January 2019 ($1.1 M lost) and again in August 2020 ( $5.6 M + $1.68 M lost)
  • Bitcoin SV (BSV) — attacked in 2021, with significant block reorganizations impacting ~570,000 transactions

and many more...

Proof of Stake (PoS) — No Known 51% Attacks

Despite theoretical vulnerabilities and lively debate, there are no known or verified cases where a pure PoS chain suffered a 51% attack that resulted in a double-spend.

🔑 Why Double Spending in PoS is Hard

1. Economic Security Model

  • In PoW, attacking is about renting or buying hash power. Once the attack is done, miners can walk away with their hardware or rented resources intact.

  • In PoS, attacking requires you to own and lock up a huge share of the stake (often 33–51%).

    • If you double spend, the protocol can slash your stake (burn or confiscate it).
    • That means the attacker risks losing billions of dollars instantly, making the cost of the attack self-defeating.

2. Slashing & Finality

  • Many modern PoS chains (Ethereum, Polkadot, Cosmos, Near, etc.) use slashing + economic finality:

    • Slashing: Validators caught equivocating (e.g., signing conflicting blocks) lose part or all of their stake.
    • Finality gadgets (e.g., Ethereum’s Casper FFG, Polkadot’s GRANDPA): Once a block is finalized, it’s irreversible unless >66% of validators collude. That prevents long reorgs that are necessary for double spending.

3. No External Rentable Resource

  • In PoW, you can rent mining power from services like NiceHash and attack smaller chains cheaply.
  • In PoS, you can’t rent stake easily—you need to actually own or borrow the token supply, and borrowing enough would skyrocket the token price. This makes acquiring >51% control almost impossible in practice.

4. Time Locks & Conviction

  • Many PoS systems enforce unbonding periods (e.g., 21 days in Cosmos, 28 days in Polkadot).

    • If you attack, your stake is locked for weeks—giving the community time to fork you out, punish you, or slash your funds.
    • This "skin in the game" discourages attackers.

5. Reputation & Governance Costs

  • In PoW, miners can remain anonymous.

  • In PoS, large validators are usually well-known entities (exchanges, staking providers, DAOs). If they attack, they risk:

    • Losing future staking revenue.
    • Damaging their business reputation.
    • Being voted/slashed out via on-chain governance.

If the initial token distribution (ICO or genesis allocation) is done fairly and widely among diverse participants, the network will likely have a high Nakamoto coefficient, making it much harder to attack in a Proof of Stake system. Even if an attacker somehow controls >51% stake, they risk losing millions through slashing or devaluation of their own holdings. Thus, the attack is economically irrational unless they have an external incentive to destroy the network.

The Proof of Stake Inflation Problem

A solo Proof of Stake chain often faces an inflation problem—rather than funding public goods, most of the rewards go to validators. However, allocating 3–5% inflation for validator rewards is generally sustainable for network security, while an additional 3% can be reserved for a public-goods treasury. Beyond inflation, the chain can also generate revenue through transaction fees, providing a balanced and sustainable funding model.

Solochain fund raising and DEX problem

A solo chain faces a DEX problem—raising funds and providing liquidity for trading is difficult without a native decentralized exchange. To overcome this, bridges are required, but building and maintaining them adds significant complexity. While Cosmos offers several DEX options and supports IBC-based bridge protocols, I’m not particularly fond of Cosmos since it’s built in Go, and the Rust implementation of Cosmos is still immature. In contrast, the Polkadot SDK is far more advanced for developing solo chains. However, bridge solutions for Substrate-based solo chains remain underdeveloped and not yet mainstream. Moreover, Polkadot’s design philosophy is toward parachains, which makes it harder for solo chains to integrate directly into its ecosystem.

That said, there are interesting DEX models emerging on other platforms—such as MetaDAO on Solana—that enable fairer fundraising and make rigging or manipulation much harder, offering useful inspiration for future dex for solo-chain fundraising.