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Ethereum has benefited from its first-mover advantage in maintaining a strong developer community. According to a recent report, there are more people working on Ethereum than the rest of the layer one blockchains combined, except for Bitcoin. The network has set the standard for what’s possible with this new technology and serves as the infrastructure for many valuable projects.
However, whether it be failed transactions in DeFi or paying hundreds in gas fees to mint an NFT, Ethereum’s ongoing scalability issues have become a serious hindrance to the potential of its applications. Most of which cannot sustain themselves until the ever-upcoming deployment of Ethereum 2.0.
There are different approaches to solving this problem and they all propose a way around what is known as the Scalability Trilemma:
“Blockchain systems can only at most have two of the following three properties:
Decentralization (defined as the system being able to run in a scenario where each participant only has access to O(C) resources, i.e. a regular laptop or small VPS)Scalability (defined as being able to process O(n) > O(C) transactions)Security (defined as being secure against attackers with up to O(n) resources)”
From centralized chains to layer two solutions to better layer one blockchains, different projects have negotiated between these three properties to varied results. A few notable ones have started to gain traction as developers see in them solutions that fit the needs of their projects.
Many have flocked to the popular exchange’s new network since it decided to fork Ethereum’s Go client in September 2020. Binance did away with Ethereum’s current Proof-of-Work consensus algorithm and implemented what it calls a Proof-of-Stake Authority model, a hybrid between Proof of Authority and Delegated Proof of Stake.
This and its compatibility with the Ethereum Virtual Machine have made Binance Smart Chain very popular among DeFi developers for its higher throughput and lower fees. Many have launched or ported their projects onto the network. However, BSC achieves this scalability at the expense of security and decentralization. Proof-of-Stake Authority relies on a set of 21 validator nodes to arrive at consensus, leading Binance itself to acknowledge that it built a CeDeFi platform, a centralized twist on decentralized finance.
The ambitious Telegram Open Network was renamed and handed over to independent developers in 2018. The team behind the 500 million user messaging application had designed a Proof-of-Work and Turing-complete multi-blockchain platform capable of millions of transactions per second with fees as low as 0.01 USD. Nowadays, the Free TON ecosystem is completely community-owned, run by a DAO, and is interoperable with, but not dependent on, Ethereum and other major blockchain networks.
By using a masterchain that supports separate workchains, shardchains, and shards, Free TON’s uses its own sharding techniques to solve scalability issues from the ground up without sacrificing security or decentralization. It also offers a drastic improvement over other layer one scalability-focused networks, such as Polkadot and Cosmos, that use a similar approach but are not able to achieve Free TON’s throughput. While not yet as well-known as other solutions, the project is currently focused on expanding its developer community.
Formerly known as Matic, this protocol has doubled its developer community over the past year by making scalability solutions modular and composable. Polygon is an EVM-compatible ecosystem that consists of four fully abstracted layers of services that developers can use at their convenience. Although zk-rollups and optimistic rollups have been announced, currently it only offers a Proof-of-Stake commit chain and a Plasma chain that relies on the main Ethereum chain for security.
This jack of all trades approach to sidechains and layer two solutions makes Polygon a definitive upgrade to Binance Smart Chain in terms of the security and decentralization of scalability solutions. Developers can pick and choose from a single platform that compromises within the trilemma work best for their applications. They’re still dependent, however, on the Ethereum blockchain since Polygon’s solutions are based on, and limited to, this network.