Shardeum: The EVM-Based Layer 1 Solution for Blockchain Trilemma
The blockchain trilemma - scalability, security, and decentralization - has been a persistent challenge for blockchain networks. While existing blockchain solutions have made progress in addressing these issues, there is still a need for a comprehensive solution that can tackle all three aspects simultaneously. In this article, we will learn about Shardeum, the innovative EVM-based Layer 1, and how it solves the blockchain trilemma.
What is blockchain trilemma?
Imagine you're a superhero tasked with saving the world from an impending crisis. You have to choose between three superpowers: flight, super strength, and invisibility. However, you can only have two of the three powers at any given time.
Similarly, the blockchain trilemma presents a similar challenge to decentralized networks. The three superpowers, in this case, are decentralization, security, and scalability. Just like a superhero, decentralized networks can only have two of these superpowers at any given time.
The blockchain trilemma is a widely held belief in the world of cryptocurrencies and blockchain technology. The term blockchain trilemma was coined by Vitalik Buterin, co-founder of Ethereum.
The most common example of blockchain trilemma is Bitcoin, the first and most well-known blockchain-based cryptocurrency. Bitcoin is highly decentralized, with thousands of nodes spread across the world. This means that no single entity or group controls the network, making it more secure against attacks. However, Bitcoin's scalability is limited, as it can only process a few transactions per second. As a result, transaction fees can be high and the network can become congested during times of high demand. In comparison to credit card processors such as Visa and Mastercard, Bitcoin is lagging behind since these competitors can process transactions in milliseconds.
What is Shardeum and how does it solve blockchain trilemma?
The blockchain trilemma claims that having all three of these features simultaneously in a blockchain system is difficult. For example, increasing scalability might require sacrificing decentralization, or increasing security might come at the cost of scalability. The only way to solve this problem is to have a completely decentralized network that is secure and scalable.
Shardeum was founded by Nischal Shetty, Founder and CEO of WazirX, India's largest crypto exchange by trading volume. The project has raised $18.2 million in a seed funding round from more than 50 investors, including Jane Street, Struck Crypto, and the Spartan Group.
Shardeum is a new smart contract platform that promises to provide fast, secure, and scalable solutions for decentralized applications. Built on the Ethereum Virtual Machine (EVM), Shardeum uses dynamic state sharding to achieve linear scalability and offer high throughput capacity without sacrificing decentralization.
So, what is sharding? In simple terms, sharding refers to the process of splitting a large database or network into smaller, more manageable parts. In the context of blockchain, sharding involves dividing the blockchain network into smaller, individual parts called shards, each with its own set of validators. This allows the network to process more transactions per second (TPS) without overloading the system.
Shardeum takes this concept one step further by using dynamic state sharding. In traditional sharding, each shard is limited to a fixed amount of computational power, which means that increasing the number of shards would result in a decrease in computational power per shard. With dynamic state sharding, Shardeum can increase its TPS capacity with each validator added to the network while retaining low fees forever.
But that's not all. One of the major challenges with state-sharded blockchains is that developers often face difficulties maintaining atomic composability across shards. Atomic composability refers to the ability to execute multiple operations in a single transaction, which is critical for decentralized applications. Shardeum, however, uses a novel architecture that retains atomic composability, ensuring that developers can build complex, decentralized applications on the network without worrying about interoperability issues.
For developers, the experience of building on Shardeum is much the same as building on any other EVM-based blockchain. You can deploy contracts in Solidity or Vyper, and there aren't any special considerations relative to sharding. You don't need to worry about which shard you deploy your contract on, as the network retains atomic composability with all applications.
What is Shard Coin?
Shard Coin (SHM) is the native coin of the Shardeum network. The maximum supply of SHM is set at 508 million. It is obtainable through mining by the validator, archive, and standby nodes, which receive SHM as a reward for contributing resources to the network. Shard Coin is used to cover the gas costs incurred by the Shardeum network when executing transfer operations and smart contracts.
Source: Shardeum Twitter
Shardeum use cases
The Shardeum network offers a range of potential use cases. One such use case is facilitating Peer to Peer (P2P) transfers and the exchange of digital assets with low transaction fees. Shardeum's architecture is designed to ensure immediate finality and high throughput, which increases linearly with the network size. This would encourage more peer-to-peer transactions and exchanges of digital assets.
Developers can build decentralized applications (DApps) on the Shardeum network using any programming language, thanks to the Ethereum Virtual Machine (EVM) which provides a distinct and accommodating experience. This feature opens up a wide range of opportunities for the development of innovative DApps.
Shardeum is also well-suited for the development of Decentralized Finance (DeFi) protocols, which are P2P financial services such as lending, borrowing, and trading. Shardeum's transparent, accessible, fair, and free network could foster the growth of DeFi protocols.
In the future, the blockchain network intends to implement its own version of non-fungible tokens (NFTs). NFTs represent ownership of digitally unique items and can be issued, bought, sold, and traded. Through a built-in bridge, Shardeum's NFTs could facilitate the transfer of such assets between other blockchains.
Finally, Shardeum is well-positioned to support the development of Web 3.0, which is the next iteration of the internet that operates through open, trustless, and permissionless networks. The Shardeum network has the potential to be an ideal platform for building applications and services for the Web 3.0 era, making the web integrated, interoperable, and automated through smart contracts.
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Disclaimer: All investment strategies and investments are subject to the risk of loss. Nothing contained in this article should be construed as investment advice. Users are strongly advised to do their due diligence and invest at their own risk.
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