The scaling discussion for public blockchains has dominated cryptocurrency debate forums for the last several years. Scaling woes of smart contracts platforms are often alluded to as their primary limiting factor in attracting more mainstream adoption, but several other factors contribute significantly as well.
Fluence highlighted how the leading problems in developing dapps and attracting users to them are the small number of crypto users, bad UX of crypto, financing problems, and scalability. The small subset of crypto users is mostly a product of limited knowledge of crypto, bad UX, and poor scalability, which often translates to distinct points of friction, such as high gas costs and delays in interacting with dapps.
Surveying the crypto landscape today you will find numerous projects pledging to be the ‘next-generation’ blockchain that can scale to millions (sometimes billions) of users and spark mass adoption. Many of these platforms should be viewed through a cautious lens, and many of them focus on layer one scaling, such as sharding or PoS consensus for higher throughput and are not even live yet. However, others take the layer two approach — like Bitcoin’s Lightning Network (LN).
One of the overlooked aspects of the scaling race is projects that supplement major platforms with layer two solutions, such as Matic Network. Rather than attempting to revolutionize the industry from a catch-all perspective, layer two projects like Matic and Loom’s dappchains refine their focus on complementing an existing network.
In the case of Matic, that network is Ethereum. Rather than solely emphasizing scalability — which Matic strives for with Plasma and PoS sidechains — the project also hones in on UX, which is one of the most subtly enticing characteristics of traditional applications, and is correlated to scalability in public blockchains.
Tackling Ethereum Scaling
As the first major, Turing-complete smart contracts platform to go live, Ethereum has gathered one of the fastest growing projects on Github and has been a lightning rod for the scalability debate.
The scaling woes of Ethereum are well-documented and came to a head when transaction costs soared in GAS fees, and many dapps became prohibitively cumbersome to use — and remain so today. The broader initiative by the Ethereum community has been to scale at the protocol layer, slowly rolling out Serenity — a scalable, sharded PoS blockchain network.
It is impossible to predict precisely how Etheruem’s on-chain scaling endeavor will pay out, but that has not stopped other projects from working on complementary solutions to the network. Often focusing on niche areas such as gaming, DeFi, or better UX, these projects are the ones that should garner more attention than the next ‘blockchain 5.0.’
One of those projects is Matic Network, whose focus is on scalable Plasma and PoS sidechains that can not only complement Ethereum’s scaling but also bring UX of dapps closer to what mainstream users are accustomed to.
Matic — Plasma and PoS Sidechains
Matic uses an optimized form of Plasma, which is basically a child chain design for scaling Ethereum on its second layer. Conceptually, Plasma is easy to think of as the branches on a tree, with the tree trunk being the primary chain — Ethereum — and the branches as the child chains that use their own consensus and are pegged to the primary chain.
So, each child chain — which is pegged to the root chain — is part of the Matic Network and operates under the umbrella of its consensus. Matic slightly changes the approach of Plasma by implementing a dual PoS and block producer ‘checkpointing’ system. Block producers are selected by the PoS stakers and encompass the base layer of the Matic child chains.
Block producers are few in number, which is designed to expedite settlement and block production speeds. Blocks furnished by the producers are tethered to the checkpointing mechanism via the Merkle root of the block, where PoS validators approve random groups of blocks that are produced.
Anyone can stake Matic tokens to participate in the PoS checkpointing validation, and validators sign the Merkle root of the subset of blocks from the block producers. Validators also verify the proof of the blocks before approval of the proposed block. According to Matic, the mechanism is pegged to the Ethereum chain as follows:
“The system needs the approval of ⅔ of the stakeholders to propose a “header block” to the root contract. Once the checkpoint is proposed on the mainchain, anyone on the Ethereum mainchain can challenge the proposed checkpoint within a specified period of time. If no one challenges it and the challenge period ends, the checkpoint is formally included as a valid checkpoint on the main chain.”
The checkpointing system also provides a critical role in cross-referencing the withdrawal of tokens with the smart contract on the root chain — Ethereum. To better understand how users interact with this aspect of Matic, it is best to iterate through the user experience.
Alice wants to use a gaming dapp ABC on the Matic Network. ABC has its own token Game Coin. Alice deposits the ERC-20 token Game Coins into the Ethereum mainchain Matic contract corresponding to the amount of Game Coin she wants. The Game Coin tokens are released on the Matic chain, and Alice’s Game Coins are locked on the Ethereum chain.
This process uses Matic’s proprietary tool Dagger for reading Ethereum transactions, contracts, blocks, and events triggered by the Ethereum blockchain. Dagger functions within the Matic ‘Deposit Bridge’ where users lock in Ethereum blockchain assets that are consequently unlocked on the Matic chain.
Since Matic has significantly faster blocks and lower fees from is hybrid Plasma/PoS sidechain design, Alice can exchange Game Coins very rapidly with other users or spend them in the dapp itself at lower transaction costs — removing much of the friction in the current dapp experience. Alice can also redeem her Game Coins on the main Ethereum chain at any time by using a ‘proof-of-remaining’ tokens on the Etheruem chain Matic contract. The process works for any ERC-20 compatible token.
Ethereum’s blockchain acts as the final settlement layer for transactions pegging in and out of the Matic Network.
Advantages and Future Plans
The advantages of Plasma and Matic’s dual PoS checkpointing design are primarily that the throughput capacity and UX of dapps are much better suited to mainstream requirements. Instead of relying on transactions to settle on the Ethereum main chain with higher transaction costs, developers can build more seamless dapp experiences that do not have lag times or MetaMask transactions popping up for every interaction of the user.
Matic cites this ability as smoothing the UX abstraction from the main chain to the Matic Chain, reducing the overall complexity and making interacting with dapps more straightforward. Matic will provide SDKs, APIs, and documentation for developers to create dapps on Matic, and Dagger is a highly practical tool for retrieving real-time events from the Ethereum blockchain.
The Matic team cites numerous potential use cases, including P2P payments, liquidity pools, DEXs, lending and credit platforms, identity verification, and games.
In particular, the use of NFTs and their potential within gaming on sidechains is an important consideration. Functional gaming dapps are much better suited to sidechains than on-chain processing for a variety of reasons, most importantly being that they don’t need the consistent transaction finality of the Ethereum root chain. However, Matic would also empower games to save progress (i.e., game state), a downstream effect of Plasma’s design.
There are still several hurdles facing Plasma and Matic, however. The best practice wait time for Plasma exits — the finalization of off-chain computations — is roughly seven days and results in poor user experiences. Matic is addressing this issue with Nuo to reduce exit times, but Plasma’s complexity breeds other problems as well.
Matic is still in its Mainnet Alpha stage, with the Mainnet Beta scheduled for July 2019.
Several Ethereum projects are already partnered with Matic, including Decentraland and MakerDAO. CryptoSaw — a P2P payments application for dapps — is also integrating with Matic.
Looking forward, Matic seeks to tackle generalized state scaling as its next major development frontier. However, the topic is highly sophisticated with numerous avenues for development, and Plasma has received criticism even from some of its core developers in reconciling its complexity with UX/UI.
A growing sentiment among Plasma developers is that generalized state transitions may be verified using zk-SNARKs — the privacy-preserving technology that can also aggregate transactions into batches.
With an emerging class of ‘blockchain 4.0 or 5.0’ platforms cropping up everywhere, it is unlikely that they will all garner the ubiquitous adoption or legitimacy that pushes crypto into the mainstream. Ultimately, it is likely that more users will gradually gravitate towards a few platforms that have large developer communities and projects like Matic that supplement their scalability and UX.