Matic Network: Are Side Chains the Solution to Scalability?

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matic network

The Matic Network is a proposed solution to the problem of scalability in Dapps. It uses Proof of Stake (PoS) checkpoints on an Ethereum sidechain.

This article will explain the problem of scalability and the Matic Network solution to this problem.

Regular readers of this blog will probably notice the similarities between Matic and the Loom Network. So we’ll also discuss the differences between these two solutions.

The Problem of Dapp Scalability

scalability

Over the past year or two, the blockchain/cryptocurrency community has witnessed a virtual explosion of new decentralized apps (Dapps) being created. Where there were once only a few Dapps, there are now hundreds.

There are now social media Dapps, video-hosting Dapps, cloud-computing Dapps, and plenty of Dapp games. Many of these projects have been useful or entertaining to users and have led to the financial success of their developers.

But despite this success, there has been a growing awareness of a problem: scalability.

Ethereum transactions take an average of 14 to 20 seconds to process when the network isn’t being used much. And even in this case, users must typically pay $0.20 worth of ETH or more to process the transaction.

If there are many users on the network, the situation gets even worse. During periods of congestion, users may have to pay $0.50 or more worth of ETH to process a transaction taking several minutes.

This is in contrast to traditional centralized apps that can process a transaction in one second or less at essentially zero cost.

Users have come to expect that when they stream a video from YouTube, post an article to Twitter, or loot a monster’s corpse in World of Warcraft, this action will occur instantly and at no cost.

Yet in blockchain applications, users have been expected to pay for these same types of actions before waiting several seconds or even minutes for them to process.

Developers have become more aware of this problem over time. And in the past year or so, multiple projects have sprung up to try to solve it. The Matic Network is one of these solutions.

Proof of Work vs. Proof of Stake

Most developers have agreed that the root cause of the scalability problem is the Proof of Work (PoW) protocol used by Ethereum and inherited from Bitcoin.

In this protocol, every node on the network must validate each and every transaction that takes place. This drastically slows down transactions and increases cost.

However, developers do not agree as to how to solve this problem. Some have argued that Ethereum should be abandoned and replaced with a faster Proof of Stake (PoS) or Delegated Proof of Stake (DPoS) blockchain.

EOS and NEO are examples of projects created from this point of view.

Others have stated that there has already been too much development on Ethereum for it to be abandoned.

In this view, abandoning Ethereum would require developers to essentially start from scratch, possibly delaying mainstream adoption of Dapps for many years.

In addition, these developers argue that a PoS or DPoS system may not be as secure as Ethereum.

For these reasons, some developers seek to come up with “side chains” that can be connected to the Ethereum network, allowing them to have faster speeds without compromising security – and allowing them to keep using Ethereum.

The Loom Network and the Matic Network are examples of projects created from this point of view.

The Matic Network Solution

The Matic Network consists of a root contract on the Ethereum mainnet and a side-chain that uses Proof of Stake (PoS) to validate transactions.

Ethereum Matic Contract

ethereum mainnet

The foundation of the Matic Network is the Matic Contract. This contract exists on the Ethereum mainnet and is validated using Proof of Work. If a user wants to create a Matic account, he must transfer ETH to the Matic Contract.

This transaction is validated the same way that any Ethereum transaction is. However, once the account is created, the user receives Matic tokens in his account on the Matic sidechain.

From then on, he can transfer his Matic tokens to anyone in less than a second. He should also be able to make transfers with no fees or fees that are negligible.

If a user decides that he wants to remove his ETH from the contract, he can burn his Matic tokens and get his ETH back in return.

Proof of Stake checkpoints

proof of stake

To validate Matic token transactions, the Matic Network uses a Proof of Stake system. 

All owners of Matic tokens have the right to stake their tokens. Essentially, this means that they hold onto the tokens and don’t spend them. In return, they earn the right to choose who the Proposer will be. 

After a certain number of blocks have been produced, stakers will choose a Proposer who will propose that these blocks be added to the Ethereum blockchain as a header block.

The Proposer must first validate the blocks. The stakers must then validate the blocks themselves to make sure that the Proposers’ blocks are correct. 

Once ⅔ of the stakers have approved the checkpoint, there is a trial period in which any Ethereum node can challenge the transaction. If no one challenges it, the transaction becomes part of the Ethereum blockchain.

The Matic Network does not publish its blocks to the Ethereum blockchain each time a block is produced. Instead, it publishes numerous blocks to the Matic sidechain. Then, at the next checkpoint, it publishes all of these blocks to the mainnet at once. 

This is how the Matic Network speeds up transactions and lowers costs.

Block producers

block producers

Although the Proposer proposes blocks to be added, it does not create these blocks itself. The stakers also do not create the blocks. Instead, blocks are created by a smaller number of nodes called block producers.

Block producers are chosen by stakers during checkpoints. If they cannot participate or are found to be producing invalid blocks, there is a mechanism for the stakers to remove them.

Matic Network vs. Loom Network

matic and loom

Matic Network is not the only Ethereum sidechain being developed. There are several others competing to become the “one true scaling solution.” 

The most popular alternative to Matic is the Loom Network, which has made deals with some prominent games like CryptoWars, Axie Infinity, Pixie Shopping Street, Neon District, and Mossland.

On the other hand, the Decentraland team has recently announced that its game will be run on the Matic Network.

So the question arises: which scaling solution is the best? And what is the difference between the Matic Network and Loom Network?

We went digging for answers, and this is what we found out about Matic Network vs. Loom Network.

Marketing differences: gaming vs finance

Loom Network has marketed itself toward game developers. It claims to be the solution to the scaling problem for games

By contrast, the Matic Network sees itself as primarily a financial scaling solution. It wants to develop decentralized exchanges and other tools to allow users to trade both ERC-20 and ERC-721 tokens. It sees games as only one type of app among many.

This is a superficial difference between the two networks. But we mention it here because it is probably the first thing a reader will notice when researching the two solutions.

Plasma Cash vs Plasma MVP

Both Loom and Matic use the Plasma layer of Ethereum. This is a layer that allows for greater security between Ethereum and sidechains.

However, Loom uses the Plasma Cash specification to interact with this layer, whereas Matic uses PlasmaMVP. Matic developers argue that this means all assets on Loom are interpreted as ERC-721 tokens, whereas assets on Matic can be interpreted as either ERC-20 or ERC-721.

For this reason, Matic developers argue that their system is superior for exchanging cryptocurrencies as opposed to collectibles. However, Loom developers probably dispute this claim.

Developers in general are split over whether PlasmaCash or Plasma MVP is best. Supporters of PlasmaCash argue that it reduces complexity, while others wonder if Plasma MVP is still the better option.

DPoS vs PoS

Loom Network uses a Delegated Proof of Stake (DPoS) consensus mechanism, whereas Matic uses Proof of Stake (PoS). On the Loom Network, stakers elect representatives to produce new blocks and validate them. 

On the Matic Network, validation is done both by a Proposer and by the stakers themselves, with blocks being produced by a separate elected group.

In recent years, PoS has fallen out of favor with most developers thanks to the popularity of Steem and EOS, which use DPoS mechanisms. But most PoS networks have been free of security breaches. So the jury is still out on which one of these consensus protocols is the best.

Supported apps

Perhaps the most important difference between these two networks is the apps that run on them. Loom Network is compatible with Axi Infinity, Neon District, and many other popular games, whereas the only third-party app that has been announced for Matic is Decentraland.

Still, Decentraland is a big game. And for its players, this may be a decisive benefit to using Matic instead of Loom. And Matic may also convince other game developers to use its network in the future.

To conclude this section, there are a few differences between Matic and Loom, including the use of PoS vs DPoS consensus protocols, Plasma Cash vs Plasma MVP, and others.

But it is unclear which of these networks will win out in the marketplace over the long-run. Players may have to keep some assets on each network or choose ones based on which games they play, at least until a clear winner emerges.

Conclusion

This article has explained what the Matic Network is and how it works. We’ve gone over the scalability problem and how Matic attempts to solve it, the Matic Ethereum contract, PoS checkpoints, block producers, and the differences between Matic and Loom networks.

We hope this article has shed some light on future developments in the technology of blockchain games. If you would like to find more fun blockchain games to play, check back to this blog often. 

We add new titles to our list of reviews every week. And we always strive to tell you the honest truth about games: which ones are fun, which are boring, and which are best enjoyed by some types of players as opposed to others.

So keep an eye on this blog to find more info on the latest digital collectible games.

Tom Blackstone
Tom Blackstone is a former salesperson turned tech writer. Before 2014, he sold video games, computers, home theater systems, and other entertainment products. Since 2014, he has been a full time writer. His previous work includes ICO announcements, articles on the history of cryptocurrency, guides to Kodi addons, and more. He has always enjoyed learning about new technology and helping others to understand it. As a former video game salesperson, he also likes to try out new games and review them for others.

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