Although digital assets and their underlying blockchain technology have received a lot of media attention in recent times, this relatively nascent industry is still struggling with mainstream adoption. Whilst there are other hurdles such as ease-of-use and accessibility, scalability has remained one of the major roadblocks slowing down the widespread adoption of cryptocurrencies.
Since Bitcoin’s genesis block was mined about 12 years ago, the industry has continued to battle with scalability issues. Industry experts have repeatedly compared the transactional capacity of legacy blockchains like Bitcoin and Ethereum with traditional payment solutions such as PayPal and Visa. To put things in perspective, while a payment processor like Visa claims to be able to handle over 65,000 transactions per second, the world’s largest cryptocurrency by market cap Bitcoin does an average of 7 transactions per second. When placed side by side with existing traditional solutions, it becomes apparent that the scalability problem of cryptocurrencies needs to be solved if they are to go mainstream.
That being said, a number of other blockchain solutions have risen to the task of solving Bitcoin’s scalability issues. This led to the creation of concepts such as Proof-of-Stake, masternodes, sharding, and more recently sidechains. Plasm Network is one of the notable and promising players in this regard.
The Plasm Solution
Launched in February 2019 by Sota Watanabe, Plasm Network is on a mission to build “a scalable infrastructure for realizing web 3.0.” Its core focus is on developing on top of Parity Substrate and Layer 2 solutions.
By developing its solution atop Parity’s Substrate framework, Plasm will be able to become a future Polkadot Parachain and a scaling DApps platform. Since the Polkadot Relaychain does not support smart contracts, Plasm hopes to fill this void. In one of his project updates on Medium, founder Watanabe wrote:
We [Plasm Network] provide the platform that allows developers to build whatever applications on Plasm Network without having to consider its scalability.
The Plasm Network is quite confident that as scalability concerns become more evident, there will be a shift away from legacy single-layered blockchains like Bitcoin. A second layer of blockchain will be used to handle heavy transactions.
Traditional blockchain networks are inherently flawed in how data is store. Every transaction state is stored within the main blockchain. Such a framework is designed to buckle under pressure since it becomes rather easy for a blockchain to be filled with unnecessary data. To solve this problem, Plasm Network is proposing that Layer 1 blockchains will function as trust layers, while a new layer (Layer 2) will handle transactions.
Transactions will be handled within Layer2 and only the final state that comes out of the transaction will be stored in Layer1.
Commenting even further on the subject and its relationship to Polkadot, Watanabe wrote:
We believe that Polkadot brings layer1 scalability with sharding architecture and Plasm Network brings the vertical layer2 off-chain scalability into the ecosystem… In the future, we are going to make layer2 gaming use cases, IoT use cases, DEX, and Bridges.
- Dapps Rewards: It is not uncommon for blockchain projects to incentivize validators for securing the network. Plasm Network takes it a step further by incentivizing developers on its network as well. Smart Contract owners, otherwise known as Operators in the Plasm Network earn a basic income for creating DApps on the network. Block validation rewards in the form of PLM tokens are distributed to DApps that provide value to the ecosystem.
- Multi-Lockdrop: This is a token distribution mechanism peculiar to Plasm Network. Multi-Lockdrop expands on the normal Lockdrop mechanism invented by Edgeware.
- Transaction of DApp Ownership: DApp operators on the Plasm Network are allowed to change the address in which they receive rewards. Consequently, operators can transfer ownership to other parties.
- Optimistic Virtual Machine & Ethereum Compatibility: Plasm is compatible with the Ethereum network, one of the most widely-used legacy blockchains. Its infrastructure offers support for EVM, ECDSA, and Solidity. Ethereum-compatible smart contracts can also be deployed with Metamask or Remix. Moreover, through OVM, a unified standard to host Layer 2 protocols, DApp developers can implement a variety of Layer 2 scalability solutions.