Multi-tier Smart Contract Scaling Solution On Ethereum Blockchain

 

At present, second-generation blockchains are remarked as much faster, cheaper, and easier to scale than Bitcoin. Meanwhile, third-generation blockchains have promised to allow more significant optimizations.  However, we cannot conclude that there is no flaw in these systems. 

Even though both these blockchain generations have efficient features, they still have the same difficulties as Bitcoin. One of the primary reasons for this issue is the lack of resources, resulting in higher costs. The only solution to overcome this is to proffer an array of scaling solutions.  

Without smart contracts, there wouldn’t be any DeFi products and obviously no NFTs. Today’s decentralized networks have the foundation of smart contracts. They are designed to process all transactions and store them securely in the blockchain. And, you will need the aid of a smart contract development services to make it cut-stitched to your requirements.

Smart contracts allow developers to create decentralized applications that can be accessed from anywhere around the world. All a person needs is an internet connection to use them. These applications are now largely used in sectors including DeFi and around NFTs. 

However, with the rising demand for these decentralized applications, the limitations of smart contracts have become so evident. The drawbacks of existing ones are high transaction fees and high time-consuming transactions. This fueled the necessity for alternative solutions, resulting in multi-tier scaling solutions. 

New possibilities

Smart contracts have paved the way for creating tokens without having to install a completely new blockchain. With Ethereum, a digital token got reconstructed into a logic-based computer code containing certain pre-determined functions. They facilitated the transfer of digital assets within the blockchain network. 

Adoption of smart contracts for scalability

As the adoption of smart contracts continues, scalability has become its order of the day. Blockchain in general is complex when it comes to programming, functioning, and configuration. However, if the network is busy, then it will affect the user experience and the transaction speed. 

The higher the network congestion, the higher will be the transaction fees. This is the reason why Ethereum has a high gas fee. Now, let us see what we said about multi-layered scaling solutions. 

Multi-layered scaling solutions (Layer 2)

The so-called ‘Layer 2’ solution does not try to contend directly with the Ethereum blockchain. Instead, they improve their transaction capacity in a layered way. 

In this procedure, all the outsourcing transactions will happen in a sidechain, and the final settlement will be on Ethereum. This method avoids network congestion. 

A distinction is made between sidechains with their native validators and the so-called optimistic rollups having full access to Ethereum’s decentralization and security. Polygon is one prominent example. It uses a bridge to transfer the assets across Ethereum and itself. During this process, their own validators will verify all the transactions and settle them on the main blockchain (Ethereum) at a predefined interval. 

And, that’s how smart contract-enabled scaling solutions work. You will need the assistance of a smart contract development company to develop the fit smart contracts for your business.