According to a recent report by crypto.com, the total number of global cryptocurrency owners may grow by 3x in 2022. We are really looking at billion+ users sooner rather than later. When we look at existing networks and their capabilities though, we can see they are all falling agonizingly short for mass adoption. The current layer one (L1) blockchains are simply not designed to serve at such a large scale yet. That said, there have been no dearth of L1 blockchains attempting to scale up the network in the recent past. Even those who are successful at it today, end up compromising decentralization and/or the security tenets of open source technology. Other measures like increasing the block sizes or having layer two (L2) solutions come with their own problems.
We are also realizing that vertical scaling with more hardware resources is not sufficient to take the underlying technologies towards mass adoption. It is safe to say that permissionless blockchain have rendered Moore’s law more or less unpredictable in the world of distributed computing networks. This lays the ground for our next question. How can sharding be the panacea to a challenging “scalability trilemma” problem?
Sharding by Zilliqa & Polkadot
Sharding means partitioning to distribute a network’s computational and storage workload. That way each node operator can relieve themselves from shouldering the total transactional load on the network. Further, sharding breaks the job of validating and confirming transactions into small, manageable bits. Each node maintains information related to transactions it handles. Transactions are then processed within the partition or shard it is on by reaching consensus.
Shardeum is not the first blockchain to attempt Sharding. One of the prominent examples of sharded chains is Polkadot, which acts as a layer zero (L0) solution. Here, multiple heterogeneous shards (parachains) attach themselves to the Polkadot base layer and execute various transactions. Polkadot claims to provide security and communication across parachains. Another example is Zilliqa, which claims to be the world’s first L1 blockchain to use the sharding method. This then raises the question: what makes Shardeum ground-breaking? One of the key answers, in my opinion, lies in its consensus by a transaction.
Sharded blockchains like Zilliqa group transactions into blocks and seek consensus at the block level. They can theoretically achieve higher efficiency with this, but it is not the most efficient way to deploy sharding. Since consensus and commitment takes place at a block level, the finality of transactions takes more time and resources. On the other hand, Shardeum achieves consensus on each transaction. A transaction in this case does not have to wait till a consensus is reached across multiple shards for processing. This allows the network to introduce the below mentioned features which when combined together makes Shardeum truly scalable, albeit, in a linear and horizontal way.
Dynamic State Sharding by Shardeum
Note, the following contents are an excerpt from a recently published blog which comprehensively explains how Shardeum will eventually solve blockchain trilemma. To begin with, the network won’t have a static group of nodes as fixed shards. Nodes on Shardeum are free to move around and accommodate more data as dynamic shards. Dynamic state sharding will work hand in hand with Shardeum’s auto-scaling feature allowing the network to automatically adjust the number and size of shards based on the current workload. This allows the system to optimize performance and maintain high levels of scalability as it grows and evolves.
Static state sharding only enables a blockchain network to have static/pre-defined group of shards and transactions can only be processed sequentially after a minimum number of nodes join the network to create a new shard. There are two issues at play here. For one, this does not allow for growing dynamically in proportion to the demand in the network. Two, sequential processing slows down the network as a result of high latency arising from the time taken for new nodes added to sync to the latest state of shards they are involved in.
Dynamic state sharding allows validator nodes on Shardeum to be assigned dynamic address ranges across multiple shards. Unlike static state sharding where all the nodes in a shard cover the same address range of an account, dynamic state sharding requires each node to hold a different address range, but there is significant overlap between the addresses covered by nodes in respective shards. Since consensus is done at the transaction level, a transaction that affects multiple shards will be processed simultaneously by these shards rather than sequentially as with block level consensus. This not only reduces the time to process the transaction even if it affects multiple shards, but also ensures atomic processing. Shardeum will further ensure cross shard composability.
Atomic Processing & Cross Shard Composability
Cross-shard communication allows for transactions to access and utilize data and state from different shards, enabling complex transactions and smart contracts to be executed in a sharded environment. Atomic composability is also important because it ensures that transactions are executed atomically, meaning that either all parts of the transaction are executed successfully or none of them are. Without atomic composability, transactions could potentially fail or leave the blockchain in an inconsistent state, leading to security risks and reduced reliability. Shardeum will ensure complex transactions and smart contracts are executed effectively in a sharded environment while maintaining the integrity and consistency of the blockchain.
Shardeum Scales Linearly
Through dynamic state sharding, every node added to the network will increase the transaction throughput instantly. So basically, by simply adding more nodes from the network’s ‘standby’ validator pool during peak demand, the TPS will increase proportionally making Shardeum the first Web3 network to scale linearly. And this is the main X factor that impacts every other outcome on a blockchain network favorably including throughput, decentralization, security and constant transaction fees irrespective of the demand in the network.
That’s how Shardeum’s underlying protocol, Shardus, was able to demonstrate 500 TPS with 100 nodes over the last 3 years. Shardeum is aiming to enable up to 1 TPS or more per node which will be a huge breakthrough for the Web3 ecosystem. Even with 2k active nodes on existing blockchain networks, we can only see them process an average of 350 TPS at best when Web2 peers like PayPal and Visa processes an average of 5000 TPS every day. Shardeum’s idea is to mobilize millions of nodes eventually which can process over 1 million TPS to realistically host a ton of dApps providing products and services to billions of users thereby eliminating middlemen taking advantage of our data/privacy.
Shardeum Maintains Low Gas Fees Forever
And why does linear scaling matter? In a nutshell, one key advantage with Shardeum is that the consensus and processing are done at transaction level and not at the block level. And, through dynamic state sharding, the network will shard its state by evenly and dynamically distributing compute workload, storage, and bandwidth among all the nodes. This not only allows for parallel processing of transactions but also very low overhead for validator nodes as they will store only the state data of transactions they are involved in.
This is how Shardeum will get to maintain low transaction fees for developers and end users perpetually. Just to be clear, dynamic state sharding is the most advanced version of state, transaction/network and static state sharding employed by more recent sharded chains which runs into both inter-related and standalone problems such as high latency, vertical scaling (as opposed to linear scaling), sybil attack, weak finality and lack of cross shard composability. That said, dynamic state sharding is also the most complex way to shard the state of a network.
Shardeum: A Unique Blockchain for the Future
Shardeum pioneers a new approach with sharding. With dynamic state sharding on top of its EVM compatibility, Shardeum will be truly capable of handling multitude of DApps and layer 2 solutions across industries and consumers with optimum performance. It will indeed maneuver in unchartered territories in the blockchain space. Otherwise it will not be aiming for 1 million TPS with high decentralization and solid security. However that only adds to the excitement to finally see another blockchain that builds on the great architecture of Ethereum and its EVM. So let’s stay tuned 🙂
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Opinions expressed in this publication are those of the author(s). They do not necessarily purport to reflect the opinions or views of Shardeum foundation.
The contributing author is a Web 3 and blockchain enthusiast based out of Gurgaon, India. He provides strategic research-based inputs, analysis, and content support for entities in this space. You can follow and contact him on Twitter