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4 - The Scalability of Web3

from Part II - Technological Underpinnings of Web3

Published online by Cambridge University Press:  21 November 2024

Ken Huang ,
Youwei Yang ,
Fan Zhang ,
Xi Chen  and
Feng Zhu
Ken Huang
Affiliation:
DistributedApps.ai
Youwei Yang
Affiliation:
Bit Mining Limited
Fan Zhang
Affiliation:
Yale University, Connecticut
Xi Chen
Affiliation:
New York University
Feng Zhu
Affiliation:
Harvard Business School
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Summary

Chapter 4 examines the scaling of Web3 to support widespread adoption. It first discusses why scalability is crucial for Web3, enabling it to handle high transaction volumes and users such as centralized systems. Scalability refers to the ability to sustain performance amid growth. Key factors are number of users, response time, storage, transaction costs, and throughput. Scalability is challenging due to the blockchain trilemma of decentralization, security, and scalability. Solutions involve optimizations at the network layer (layer 0), blockchain layer (layer 1), and Off-chain layer (layer 2). Layer 0 focuses on data transfer, using protocols such as BloXroute. Layer 1 aims to improve the blockchain itself via methods like sharding or new consensus algorithms. Layer 2 leverages Off-chain processing via rollups, sidechains, and state channels. Each layer has trade-offs. Rollups bundle transactions Off-chain using zero-knowledge proofs or fraud proofs before validating On-chain. Sidechains process transactions externally to relieve the main chain’s load. State channels allow Off-chain transfers between participants. No single scaling approach fits all cases. A combination of solutions across layers tailored to the application offers the most potential.

Type
Chapter
Information
Web3
Blockchain, the New Economy, and the Self-Sovereign Internet
 , pp. 95 - 120
Publisher: Cambridge University Press
Print publication year: 2024

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