Original title: " What is Shardeum and How Does It Work? "
Original Author: CJ , CoinGecko
Original Compilation: Cookies, ChainCatcher
Shardeum is an EVM-based Layer 1 network designed for linear scalability. Thanks to its advanced sharding solution, Shardeum promises to keep gas costs low forever. Shardeum will also launch its own native token SHM.
key points
Shardeum solves the scalability problem through linear scaling and sharding, as well as auto-scaling and its unique Proof-of-Quorum consensus.
Shardeum utilizes dynamic state sharding to increase transaction throughput while keeping gas costs low.
Arbitrum is a scaling solution for Ethereum that allows transactions to be executed with higher TPS and cheaper gas fees, which is one of the reasons for the popularity of the network. Therefore, Arbitrum’s AirDrop is highly anticipated by the crypto community, and ARB rewards those who participate in the Arbitrum Mainnet early.
In addition, there are many protocols in the encryption field that aim to achieve DeFi expansion, and Shardeum is one of them. Shardeum was founded by the founder of WazirX, India's leading cryptocurrency exchange, and the team has been building Web3 projects since 2017. Shardeum completed an $18.2 million seed round in October 2022 and may conduct an AirDrop to those participating in its testnet.
Source: Shardeum blog
In this article, we will learn what is Shardeum, its unique scalability features and ecosystem.
What are Shardeums?
Shardeum is an EVM-based Layer 1 blockchain designed for linear scalability, promising low gas fees while maintaining decentralization and security through dynamic state sharding. Potential use cases for Shardeum range from DeFi to open-source AI and gaming, with the aim of getting the next billion people into the cryptocurrency space.
In order to overcome the blockchain trilemma of scalability, security and decentralization, Shardeum draws on the decentralization and security of Ethereum, and at the same time through dynamic sharding and its combined Quorum and Proof-of-Stake consensus Enhanced linear scalability.
Shardeum will launch its own native cryptocurrency SHM. The team has announced its token economics, with a fixed supply of 508 million pieces, but SHM is still in the development stage.
Let's explore what makes Shardeum worth watching next.
Unique features of Shardeum
Shardeum scales by using sharding technology, which divides the blockchain into smaller, more manageable parts.
Specifically, blockchain is essentially a large database system, and sharding blockchain refers to splitting large data tables into smaller data tables. By breaking information down into manageable pieces, sharded networks are able to process more transactions per second (TPS) than non-sharded blockchains.
Sharding is not new to Shardeum, Zilliqa, Polkadot, Near and even Ethereum are using sharding (they use a version called Proto Danksharding). However, Sharedum uses a unique sharding technique called "dynamic sharding".
Dynamic Fragmentation
Dynamic state sharding (dynamic state sharding) is one of the cutting-edge solutions of sharding technology. Its architecture is flexible and can easily adapt to changes in the entire blockchain ecosystem. In dynamic sharding, all nodes do not cover the same address range, but assign different address ranges to these nodes, so that transactions from multiple shards can be processed simultaneously instead of sequentially. This technique can reduce the time to process transactions and also help to increase transaction throughput while always keeping gas fees low.
Essentially, it allows the network to add or remove blockchain shards or data storage methods on the fly as dynamic needs fluctuate. The advantage is that the network can be easily upgraded without stopping the ecosystem.
Unlike static sharding, dynamic sharding does not slow down the network because it can be performed when the network load changes and easily copes with fluctuations in network load.
Atomic processing and cross-shard composability
Shardeum also supports the use of atomic processing technology to ensure the correct execution of transactions. Atomicity means that transactions can execute partially, or none at all. Without atomic processing, transactions could fail and create inconsistent data across the network, leading to security risks and reduced reliability.
Shardeum combines atomic processing and cross-shard communication, allowing transactions to access data and states of different shards, which will enable complex transactions and smart contracts to be executed in a shard environment, making coding easier for smart contract developers.
auto scaling function
Because the load and demands on the network change over time, autoscaling needs to adapt to highs and lows of demand without compromising security and network performance.
Autoscaling is load-based to measure the network load every epoch (1 minute), which will agree with the number of validator nodes needed to handle the load. The entire process is self-executing without any intermediaries. This is similar to how the Bitcoin network automatically adjusts its difficulty level every two weeks based on the hash rate.
For example, when a Shardeum Dapp receives a lot of activity, the network automatically adds more active validator nodes to increase throughput. When activity decreases, it will reduce the number of active validators and keep operations lean on the network.
linear scaling
As the name suggests, Shardeum allows more nodes to be added to the network to instantly increase transaction throughput during peak demand, making Shardeum a linearly scalable Web3 network. When a node is on standby, it is waiting for network activity to resume and needs to be activated in order to increase TPS.
These are the main X-factors that affect blockchain usability regardless of network demand, including throughput, decentralization, security, and constant transaction fees.
Therefore, if there is enough demand and nodes, it is theoretically possible for Shardeum to achieve a transaction speed of over 100,000 TPS.
Proof of Quorum (PoQ)
Shardeum uses a unique combination of consensus mechanisms, using both Proof-of-stake(PoS) + Proof of Quorum (PoQ).
Proof of Stake is a mechanism for how new blocks of transactions are validated, if the validation is correct, and who gets rewarded. Anyone who holds the minimum required stake in SHM can participate in the verification. This is currently the most popular consensus mechanism, used by Ethereum, other L1s, and all Cosmos applications.
Shardeum uses Proof of Stake to validate new blocks, and additionally, it uses Proof of Quorum to validate transactions within the group. In detail, proof-of-quorum is used to govern how transactions are validated within a consensus group, which consists of multiple nodes in a shard. PoQ nodes individually verify transactions as soon as they are received with a timestamp (this prevents "double spending", where someone alters the blockchain network to reacquire coins they have already spent in order to spend it again). The transaction is then broadcast to all other nodes in the consensus group/shard on the network, rather than to every node on the network.
Proof of Stake and Proof of Quorum together allow Shardeum to collect votes (aka quorum) in a trustless manner and in the form of receipts, keeping the network decentralized.
Permanently low gas fees
On Shardeum, consensus and processing is done at the transaction level rather than the block level.
Thanks to dynamic state sharding, the network will evenly shard its state and dynamically distribute computational workload, storage, and bandwidth across all nodes. This type of parallel processing of transactions makes the overhead for validator nodes very low, as they will only store state data for the transactions they are involved in.
This allows Shardeum to keep gas costs low for developers and users forever.
Shardeum Ecosystem
Shardeum currently has three testnets: Shardeum Liberty 1.X, Liberty 2.X, and Sphinx 1.X, with 69 projects in its ecosystem.
There are various categories of applications on Shardeum, from NFT to DeFi, and on-chain games.
The most important pillar in the ecosystem is the DEX, so let's first take a look at the DEXs that are already on the Shardeum testnet.
decentralized exchange
Every ecosystem needs a DEX as it is where most transactions and transactions are done. At the time of writing, Swapped Finance is the only DEX running on the Shardeum testnet.
Swapped Finance is similar to a Uniswap v2-style DEX, where users can swap different tokens and charge 0.3% fees, as well as provide Liquidity and earn a fee of about 0.21% proportionally on all transactions.
domain name service
Dotshm.me is a Web3 domain name service similar to the Ethereum Name Service (ENS), making it easier for others to send cryptocurrencies to individual domain names instead of users' "0x" addresses.
Users only need to connect their wallets to Liberty 2.X, search for available domain names, and register a domain name.
NFT market
No DeFi ecosystem is complete without an NFT marketplace, and Spriyo.xyz is exactly that. There are nearly 3,000 different collections, with over 120,000 NFTs minted. Users can explore the marketplace and bid on favorite NFTs.
Keep in mind that all of these applications are currently testnets, but they also have the potential to offer individual project AirDrop to testnet users in the future.
in conclusion
As the next billion users enter the crypto space, scalability is a real problem that many networks are looking to solve. Sharding is one of the ways to improve scalability, dividing the blockchain database into smaller tables. It is also one of the next major upgrades for the Ethereum ecosystem, although they will face competition from other chains. Shardeum is likely to be one of the main contenders in the scaling and sharding space, as they have been building their own version of advanced sharding since 2017, which allows their network to scale infinitely.
Fortunately, they are still in the testnet stage, which means that it is still possible to get SHM AirDrop, especially since the team announced that they will set aside 5% for the ecosystem and AirDrop.
