It’s no secret that Ethereum, in its current state, cannot fully live up to its potential of becoming a global Virtual Machine. The ICO bubble in 2017 highlighted the huge need for scalability solutions as the high transaction volumes exorbitantly increased gas prices. Excessive network congestion ensued.
At the most practical level, a 15-transaction per second (TPS) rate inhibits Ethereum from competing with major payment processors (such as Visa, whose network handles around 2,000 transactions per second, according to Investopedia.
To tackle this problem, two crypto-heavyweights Vitalik Buterin and Joseph Poon joined forces and released a whitepaper on August 11th, 2017. Enter Plasma, a Layer-2 “proposed framework for incentivized and enforced execution of smart contracts” to facilitate potentially billion of state updates per second for a significant amount of decentralized financial applications worldwide.
The introduction of the Plasma framework inspired a series of Layer-2 scalability solutions for Ethereum in the years to come.
Plasma: Scalable Autonomous Smart Contracts
At its core, the framework will defer a large volume of transactions to child blockchains (which are then enforced by the parent chain). This is what makes it a Layer-2 solution, as opposed to Layer-1 solutions, like sharding.
Plasma differs from sharding and sidechains in several fundamental ways. Firstly, In comparison to sharding, Plasma is an off-chain solution. Sharding, accordingly to Buterin, is inherently more fragile because of its attempts to guarantee absolute and total availability of some quantity of data on the main chain.
Secondly, Plasma chains are a specific type of sidechain that have a non-custodial property (meaning that users can exit the chain when errors are detected). To ensure security, Plasma users can revert back to the main chain as a trusted source.
Plasma can give payment and ledger scalability, and the potential billions and trillions of records. The goal is to billions of state updates per second which is publicly accountable on the public chain. — Joseph Poon
The advantages of Plasma chains enable new designs to be implemented at a faster rate. This is primarily attributed to the fact that Plasma chains can be deployed separately and independently, without having to coordinate with the rest of the ecosystem (and therefore the main chain). Plasma chains also allow different users to more flexibly adjust to changes in circumstances.
Establishing More Viable Plasma (MoreVP)
Vitalik Buterin noted in a recent blog that he foresees a hybrid system where a sharded base layer coexists with countless Plasma chains to optimize scalability. To capitalize on the Plasma framework for its scalability solutions, Matic CEO JD Kanani worked with Decentraland to create plasma MVP in January 2018. The repository that JD worked on can be found here: https://github.com/voltairelabs/plasma
MoreVP helps both fungible and non-fungible tokens to move between accounts in very effective manner. Taking account based MoreVP and EVM approach, helped us to move more developers and users to move to Plasma as quickly as possible. It doesn’t have a problem of multiple UTXOs when you make huge amount of micro payments; merging multiple UTXOs and exit with each UTXOs introduces new challenges in other plasma designs. — JD Kanani, CEO of Plasma
The UTXO-based project addressed issues concerning usability and extensibility for developers. From there, a framework towards an account-based plasma was developed by Jaynti and his colleagues. JD’s work with the project eventually lay the ground work for the Matic Network protocol going into the rest of 2018, when he co-founded the project with Anurag Arjun & Sandeep Nailwal (now Chief Product Officer & Chief Operating Officer, respectively).
Come back as we explore the second part of this four-part series! Look for a post about Matic Network’s eventual variation of Plasma through More Viable Plasma (MoreVP), an account-based implementation of the scalability model.