What is Dragonchain?

What is Dragonchain?

Last Updated: 1st November 2018

Dragonchain serves as a commercial platform that gives real businesses a simpler way to integrate business applications onto a blockchain. The Dragonchain platform possesses features such as: protection of business data, currency agnosticism, multi-currency support, and a DragonFund Incubator, with all these features designed to produce an ecosystem of rapidly and securely deploying blockchain applications at a low cost.

Dragonchain is designed to act as a solution to businesses that want to leverage blockchain technology, but cannot do so because of the business need that can exist in having to protect sensitive information such as customer data.  A business could choose to either separate or obfuscate sensitive information, however, this would require further design and development work up front. Dragonchain proposes to solve this with its novel use of ‘context based verification’. The context based verification architecture provides for five levels of network consensus that is designed to produce a spectrum of trust for sensitive business information, and an increased level of security and flexibility that is currently not apparent in the market.

Context Based Verification

Dragonchain’s context based verification mechanism can best be understood in light of existing blockchain implementations, such as Bitcoin’s consensus mechanism, proof-of-work. Within Bitcoin’s architecture, consensus algorithm proof-of-work is used in order to add a block to the blockchain, and reach network consensus. Dragonchain introduces another design layer to that architecture, by requiring five levels of network consensus.

Level 1: Business (Approval) Verification

This first level can be broken down and understood in two parts. The first aspect of this level operates in a business context. In this level, business logic is implemented in order to provide for transaction approval. In other words, business logic, as defined by the business, will determine the required parameters of a transaction. Transactions will be approved or denied according to the parameters that has been laid out by the business. Sensitive business information can also be removed from a transaction, to ensure that the data does not form part of the consensus process in the Dragonchain architecture.

The second aspect of this level concerns system logic. The system logic is analogous to traditional blockchains such as Bitcoin, in that transactions are also arranged into blocks and chained together. This first level also allows for the integration of abstract proofs such as proof-of-work or proof-of-stake.

Level 2: Enterprise (Validation) Verification

The second level of Dragonchain’s consensus architecture checks for the validity of blocks and transactions, by ensuring that data elements such as block signatures, transactions signatures, and header element are all legitimate.

Level 3: Network Diversity Verification

The purpose of this level is to verify the diversity of Level 2 validations. This ensures that the validations of transactions being made by Level 2 nodes are originating from a diverse set of distributed sources. In order to achieve this, a Level 3 node will check the following criteria:

  • Level 2 verification records have been received.
  • That those records have come from unique sources.
  • That those records have come from unique deployment locations.
  • That those records have come from unique key management authorities.

Level 4: External Partner (Notary) Verification

This layer of the consensus process serves as a notary function in the Dragonchain architecture. A Level 4 node, in this context, is hosted by an external partner that will cryptographically sign all Level 3 verification records that it receives. The purpose of this notary layer is for Level 4 nodes to function as independent witnesses to Level 3 verifications.

Level 5: Public Checkpoint

A Level 5 node will act as a bridge to allow the interoperability of the Dragonchain platform to one or more public blockchains such as Bitcoin and Ethereum.


The Dragonchain platform is designed to be currency agnostic, this means that a created blockchain can function without the need for a currency. However, at the same time, the Dragonchain platform can also support the implementation of more than one currency. The architecture of the Dragonchain platform allows developers to monetize late into their design. This means that a developer’s blockchain can be watched over time, in order to determine the most effective way to monetize and incentivize participants that may be involved in the developed blockchain e.g. businesses, employees, and customers.

Dragon Tokens

Dragon tokens, which are also known as Dragons, functions as a tokenized license for interaction with Dragonchain platform and product services. These services include:

  • Launch nodes.
  • Provision of smart contracts.
  • Access to the DragonFund Incubator.

Dragon tokens will also act as an incentive mechanism, to reward individuals and organizations for running public or private nodes for network consensus. For the Dragonchain Foundation, as the manager of the open source code, Dragon tokens can be used to reward and incentivize developers to contribute to the open source project, as well as being used to encourage community members to support the Dragonchain platform by identifying various issues.

Dragonfund Incubator

The Dragonfund Incubator serves as a project incubation service, to assist in the development of tokenized ecosystems. Access to the incubator can lead to the following:

  • Marketplace dashboard for community engagement to monitor and compare projects.
  • Direct access to legal, technical, marketing, and economic experts.
  • Expedited launch cycles.
  • Sustainable token marketplaces.
  • Access to a Dragonchain platform team, to model the economics behind a proposed token model.

The Future of Dragonchain

Dragonchain offers a novel solution to achieving network consensus, one that promises a more flexible and secure model compared to the ones we see today. This unique consensus mechanism, combined with Dragonchain’s focus on serving as a commercial platform for the easy integration of business applications onto the blockchain, sets Dragonchain apart as one of the more interesting projects in the space to watch.