What Does the Skale Network Do?

Two weeks ago, Skale Network was in the news after launching a $100 million ecosystem fund that will incentivize developers to build on its platform. According to Jack O’Holleran, CEO of the platform, there was the option of hiring hundreds of people after raising funds; however, it was best to issue them to teams building on the protocol. It is this kind of thinking that has seen Skale grow to be a force to reckon with within the crypto space, despite only launching a few years ago.

What Is Skale Network?

Skale Network is a layer-2 scaling solution for the Ethereum network that enables developers to bypass congestion on the Ethereum mainnet by migrating development off the main chain and onto adjacent, Skale-administered sidechains. This allows for decentralized applications (dApps) to be deployed in a reliable, high-throughput, and cost-effective environment through the use of independent, dApp-specific Skale blockchains. SKL serves as the utility token, and developers use it to pay for fees. The token is also used for staking and governance.

Skale’s solution allows for performance improvements that enable Ethereum-built dApps to compete with Web2 applications in terms of cost and throughput. The protocol’s infrastructure creates high-throughput, low-latency, elastic sidechain networks that are interoperable with Ethereum that vastly increase the number of transactions that can be efficiently transacted on the Ethereum network. The protocol sidechains also improve Ethereum mainnet scalability overall by reducing congestion.

The Role of Sidechains Within Skale Network

Sidechains operate as independent blockchains that integrate with their parent network or mainchain. They utilize a two-way communications peg between the two networks to maintain smart contract communication, making them interoperable. For example, a developer working on an Ethereum sidechain will retain access to the Ethereum mainnet and vice versa. In Skale, the most common sidechain functionality involves batching network transactions and executing them on the sidechain before returning them to the mainchain for final confirmation. This improves the speed and scalability of the main network tremendously.

Sidechains provide a few advantages when appended to mainchains, such as enabling developers to test out new and potentially unstable software without the risk of affecting the mainchain. For instance, if a project deploys a new dApp iteration on the sidechain first and it crashes, the damage will not impact the front-facing application using the mainchain.

Also, developers can deploy dApps on sidechains to reduce congestion of the mainchain. For example, in times of network congestion, gas fees increase, making transactions costly and time-consuming. Sidechains move the network activity away from the main chain, reducing gas fees and improving throughput.

Most importantly, sidechains aid with security. As independent blockchains, they are responsible for their security. If a hack occurs, only the sidechain is at risk, and there is no effect on the parent chain.

Skale Nodes and Elastic Sidechains

Like most public blockchains, the Skale network utilizes a network of decentralized nodes to furnish the transactional activity on the network. The protocol’s nodal network is subdivided into Node Cores and subnodes. Each Skale node core oversees node computation and storage resources, monitors uptime and latency, and provides node owners with an interface to withdraw, deposit, stake, and claim SKL tokens. These nodes allow the Skale protocol to deploy containerized subnode architecture. Subnodes are dynamic in size, which facilitates network elasticity. The subnodes are also involved in consensus, run the Ethereum Virtual Machine (EVM), and facilitate interchain communications.

The Skale network uses an elastic capacity mechanism that virtually subdivides network nodes. Virtualized subnodes allow each Skale node to run multiple sidechains simultaneously. When a user wants to create an elastic sidechain, the Skale Manager facilitates access to the Skale smart contract ecosystem from the Ethereum mainnet. This works in the following manner:

a) Select a chain’s size, consensus protocol, virtual machine, parent blockchain, and additional security measures as a user.

b) To help determine budget and resource requirement, the Skale manager will automatically assign 16 virtualized subnodes with each subnode using 1/128 (small), 1/16 (medium), or (1/1) (large) of each Core Node’s resources. These settings can be amended to suit the user’s needs.

c) Once the configuration is acceptable, the user can submit payment to the Skale manager for the period they wish to rent the network resources required to maintain their Elastic sidechain.

d) After the Skale manager processes the request, the Elastic sidechain is created, and its respective endpoint is returned to the user.

e) If there are insufficient resources on the network at the time of the request, it will be canceled, and the user will be notified.

All resources on the Skale network are currently of equal value, and the cost of utilizing these resources depends on the size and lifetime of each Elastic sidechain. The protocol allows developers to quickly provision highly configurable blockchains without compromising security, storage, or computation power through this architecture and pricing model.