Shardeum: Everything You Need to Know
Discover Shardeum, the Layer 1 blockchain revolutionizing scalability. Learn about its industry-first features and solutions to the scalability...
Discover Shardeum, the Layer 1 blockchain revolutionizing scalability. Learn about its industry-first features and solutions to the scalability...
In this comprehensive guide, you’ll learn the basics of Shardeum, how its unique architecture works, the key features that set it apart, and useful resources on how you can get started. Whether you’re here to explore the technology, participate in network operations, or simply learn about the potential of SHM coin, this guide has you covered.
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Although the blockchain/crypto industry has evidently made significant strides, becoming a trillion-dollar sector over the last 17 years, its adoption by the general public and other industries remains notably limited. Why? Blockchain technology faces a unique challenge: it must not only efficiently scale, become user-friendly, and reduce costs as demand grows—similar to the evolution of PCs and mobile phones—but also maintain high levels of decentralization, a requirement that traditional systems do not need to fulfill.
Early layer 1 blockchains like Bitcoin self-limited their scalability to prioritize security and decentralization, highlighting a trade-off known as blockchain trilemma, that continues to challenge newer chains. On the other hand, this lack of scalability leads us to continued reliance on traditional centralized institutions, which historically have been prone to exclusivity, misuse of power and lack of transparency – the key catalysts for decentralization.
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While modern blockchains boast higher throughput than traditional ones, their architectural limitation and reliance on vertical scaling curtail scalability once the maximum TPS is reached. This results in network congestion and high gas fees during peak demand. Although Layer 2s and other scaling solutions improve scalability, they are often insufficient for demanding applications and may compromise decentralization and/or security.
This underscores the necessity to simultaneously achieve scalability, security, and decentralization (and solve the scalability trilemma). Applications and utilities built on this foundation will inherit the aforementioned attributes, all while significantly reducing costs, maintaining performance and UX that rivals Web2 companies. This, in turn, democratizes access to resources that were traditionally confined by high barriers set by established entities. By placing the community at its center, Shardeum dismantles these artificial constraints, ensuring fair and impartial opportunities for all, regardless of background or status.
Shardeum is an EVM-based Layer 1 blockchain that scales horizontally, delivering high speed and low gas fees without sacrificing security or decentralization.
Ultimately, Shardeum will enable applications like AI and trading platforms to scale affordably on its network—merging blockchain’s eminent benefits—with the crucial ability for users to maintain control over their resources, free from central points of failure.
Below are the important innovations and features that will allow Shardeum to address the scalability problem faced by the industry.
As blockchain networks grow, they often struggle with maintaining high performance amidst increasing transaction volumes. Traditional blockchains handle transactions within a single, sequential chain, leading to bottlenecks and high fees during peak times. Sharding is a technique that splits the network at the protocol layer (Layer 1) into multiple shards, each capable of independently processing transactions to achieve high scalability.
Shardeum takes this to another level. Dynamic State Sharding enables Shardeum to dynamically adjust the number of shards based on the network’s needs. Each shard will have 128 nodes with adequate redundancy. And each shard operates a portion of the network’s state and transaction load, ensuring that the system remains efficient and responsive as it scales. Moreover, in Shardeum, validator nodes in each shard independently processes transactions and reaches consensus, unlike traditional blockchains where transactions and consensus occur at the block level. This approach gives Shardeum a blockless architecture. Once consensus is achieved, individual transactions are batched at specific intervals and sent to archive nodes for storage. In a nutshell, dynamic state sharding efficiently distributes processing across multiple shards, enabling parallel transaction execution and significantly increasing the network’s overall throughput while maintaining atomic composability.
Shardeum is referred to as an autoscaling blockchain, which is an industry first. Autoscaling refers to Shardeum’s ability to adjust its capacity based on real-time network demands automatically. As the transaction volumes increase, Shardeum dynamically scales up by adding more shards to handle the load, ensuring that performance remains high without compromising on speed or cost. Autoscaling on Shardeum will work by measuring the network load every cycle (60 seconds) and coming to consensus on the required number of validator nodes needed to process the current load autonomously. How cool is that? 🤗
Autoscaling is crucial because, when you build a decentralized network, it should ideally be able to self-govern the number of nodes with an optimal incentive mechanism. Maintaining high efficiency while scaling or shrinking to meet demand is what will help keep the cost of the network and ultimately the average transaction fees low for end users.
Proof of Stake and Proof of Work are two of the well known consensus algorithms used by blockchain networks. As Shardeum strives to enhance the technology pioneered by Bitcoin and Ethereum, it will implement a unique consensus mechanism. This development is designed to transform the concept of decentralization from a promising potential into a broadly embraced reality.
When users initiate transactions on the Shardeum network, the transactions are assigned to validator nodes within multiple shards on a FCFS basis. These nodes then verify and gossip the transactions, working to reach a consensus within their specific consensus group in each shard—rather than across the entire network. If a transaction receives approval from more than 50% of the nodes in a shard (achieving the necessary quorum), it is then processed instantly. And unlike most blockchains, the latency and finality times will be extremely low. Ultimately, this is what enables Shardeum to be energy efficient.
To reinforce security, Shardeum incorporates Proof of Stake (PoS) as a sybil deterrence mechanism. This system requires nodes to stake a minimum number of Shardeum’s native coin (SHM) as a form of collateral. Nodes that act dishonestly risk being slashed, thus incentivizing honest participation in the consensus process.
Operating a blockchain node typically requires costly high-end hardware for vertical scaling, which demands more powerful equipment to increase TPS. This limits participation in daily network operations to affluent individuals and companies. This further reduces decentralization and enables fee prioritization, allowing wealthier users to gain unfair transaction advantages.
Scaling horizontally is particularly crucial for Shardeum, as it is designed to increase its TPS by adding more individual nodes in response to growing demand. For Shardeum to attract more nodes sustainably, its technology must incorporate the breakthrough features we’ve discussed, effectively lowering the barriers to node operation with fair compensation. This enables the network to quickly scale up or down based on traffic, without sacrificing decentralization or security.
Whether you opt to run a node on personal hardware, or through a cloud provider, Shardeum’s technology ensures that minimal hardware capacity is sufficient to operate a validator node. Moreover, Shardeum simplifies node operation with our intuitive GUI dashboard, allowing you to manage your node with just a few clicks, even if you don’t possess technical skills. Yes, it’s that easy!
Shardeum’s linear scalability allows validator nodes to offload historical transaction storage to archive nodes, which require high-capacity hardware. At mainnet launch, Shardeum will operate these archive nodes, and public participation will be enabled after an initial period.
After staking the minimum required SHM and activating your node, you will initially join the network as a standby node. Every 60 seconds, the oldest active validator nodes are replaced by randomly selected standby nodes. Additionally, standby nodes are leveraged to scale the network during high-demand periods, maintaining optimal performance. This approach not only strengthens security but also promotes broader public participation and opportunity in an impartial way. Standby nodes are eligible for rewards only after successfully completing their active validator period.
Let’s start with this simple equation:
For example, if 100 nodes provide 50 transactions per second (TPS) then 200 nodes will provide 100 TPS. The combination of blockless transaction processing and dynamic state sharding is what allows for true linear and horizontal scaling on Shardeum.
A central design goal of Shardeum is to ensure sustainably low transaction fees. Most popular applications on blockchains are related to asset trading because the high gas fees during times of network congestion prevent other use cases from being feasible. Shardeum believes that, to onboard users in most countries and allow more use cases of decentralized applications to evolve, the blockchain network must provide sustainably low transaction fees.
For developers, blockchains that cannot ensure sustainably low transaction fees represent an existential threat to their business model. Shardeum is committed to promoting dApps that are predicated on the usage of low transaction fees, opening the door for innovative use cases previously rendered impractical on other platforms due to prohibitive costs such as e-commerce platforms, automated payment systems, voting protocols, among others.
Since Shardeum autoscales linearly, it maintains low network maintenance costs regardless of demand, resulting in consistently low fees for end users.
The ability to invoke multiple smart contracts and chain them together within one transaction is referred to as atomic composability. In the original Ethereum network, it was possible to chain together smart contracts to compose new functionality that was not provided by any of the individual contracts. Moreover, when the state data of a network is sharded, it breaks atomic composability since the contracts may be on different shards and transactions may only be allowed to invoke smart contracts that are all in the same shard. Shardeum does not have this problem since the virtual transaction group formed to process each transaction independently will ensure that all nodes have all data and contracts available to execute the transaction as if the network was not sharded.
In Shardeum, atomic composability will not only result in a better user experience, but also lower the number of transactions a user must execute to achieve a final result. For example, instead of invoking a smart contract on one shard, moving the output to another shard and invoking another smart contract there, the user can invoke both smart contracts in one transaction and ultimately reduce total transaction fees.
The Shardeum application layer uses the EVM for contract execution and data storage which makes it Ethereum compatible. Shardeum possesses an integrated EVM, akin to that in any Ethereum client. However, the state data, contract code, and account data managed by the EVM are additionally accessible to the Shardeum application layer. The Shardeum State Manager oversees any action that reads or writes this data, following the established rules of the EVM. Unlike Ethereum and most other networks, the complete state is not stored on every full node since the Shardeum network is sharded. Only a subset of the full address range will be stored on any validator. This applies to Externally Owned Accounts (EOA) and Contract Accounts (CA). The contract code is however stored by every validator.
In the realm of decentralized platforms, Shardeum recognizes the significance of building upon proven, user-familiar foundations. Our approach revolves around enhancing Layer 1 scalability and decentralization, while deliberately retaining well-established elements of the ecosystem. This means that instead of reimagining the smart contracting language, the virtual machine, or the explorer, we seek optimizations in areas that genuinely require innovation. Such a strategy is central to achieving swift adoption by both developers and users.
In addition to validator and archive nodes, there are other types of nodes needed to move data and transactions in and out of the Shardeum network as well as monitor the health of the network. These include connector nodes, relayer nodes and a monitor server. The connector nodes provide an entry point for external wallets and clients to query and submit transactions to the network. These are the same as RPC servers in the Ethereum ecosystem. Relayer nodes communicate with archiver nodes or other relayer nodes to store and stream data produced by the network to downstream services such as the explorer. These are similar to exit nodes in the Ethereum ecosystem which are used by exchanges and explorer services. The monitor server receives status updates from active validator nodes and provides a visual view into the health of the network.
The native coin on Shardeum is “Shard” and has “SHM” as its ticker symbol. Shardeum’s distinctive Layer 1 features, such as linear scalability, blockless architecture and standby nodes – attributes which are not addressed by other blockchains—establish our unique tokenomics model. Following are some of the top utilities of SHM coin:
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Shardeum’s innovations in scalability and efficiency enable applications of any scale to leverage blockchain. This allows such applications to move beyond centralized servers and benefit from decentralization’s enhanced security, transparency, and user autonomy, all without compromising performance or user experience. Shardeum unlocks new possibilities for developers by enabling the creation of complex, interactive dApps without sacrificing the responsiveness users expect from traditional platforms. Whether it’s real-time updates in social apps or dynamic activities in DEXs, Shardeum’s blockchain infrastructure seamlessly handles the load. Together, these elements create a blockchain ecosystem where low transaction fee is a permanent feature, even during peak usage.
While innovations like Layer-2 solutions, app-specific chains, and zero-knowledge proofs have been crucial for the Web3 ecosystem, our focus on delivering autoscaling and dynamic state sharding right at Layer 1 is what sets us apart. Today, even traditional Web2 systems face hurdles in autoscaling massive databases. Imagine a public blockchain that can seamlessly handle the throughput demanded by AAA gaming, enterprise applications, and even government-level deployments—all while preserving security and decentralization. Shardeum’s vision is to accomplish this in a Web3 environment, ensuring high throughput, low latency, and robust composability, with the help of its breakthrough protocol.
Moreover in line with Shardeum’s core principle of OCC (short for Open, Collaborative and Community Driven), we’ve open-sourced our codebase. While Shardeum will actively serve at the forefront of Web3, we invite individuals and institutions to build and improvise on our technology, driving continuous innovation. This empowers the community to become architects of change, rather than merely participants or minority stakeholders.
PS: This crypto-asset marketing communication has not been reviewed or approved by any competent authority in any Member State of the European Union. The offeror of the crypto-asset is solely responsible for the content of this crypto-asset marketing communication.
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