Why rollups + data shards are the only sustainable solution for high scalability

The argument for rollups + data shards (rads henceforth) is usually it’s more secure and decentralized. But this is only part of the story. The real reason rads are the only solution for global scale is scalability — because it’s the only way to do millions of TPS long term. Specifically, I’m going to consider zkRollups, as optimistic rollups have inherent limitations. So, why is this? It comes down to a) technical sustainability, and b) economic sustainability.

Technical sustainability

Breaking this down further, a technically sustainable blockchain node has to do three things:

  1. Be able to sync from genesis in a reasonable time.
  2. Avoid state bloat getting out of hand.

Economic sustainability

This one’s fairly straightforward. A network needs to collect more transaction fees than inflation handed out to validators and delegators. In reality, this is a very complex topic, so I’ll try to keep it as simple as possible. It’s certainly true that speculative fervour and monetary premium could keep a network sustainable even if it’s effectively running at a loss, but for a truly resilient, decentralized network, we should strive for economic sustainability.

  1. An unsustainable centralized L1.

Summing up

  1. The blockchain industry does not yet possess the technology to achieve global scale.
  2. Some projects are offering very low fees, effectively subsidized by speculation on the token. They are a great option for users who are looking for dirt cheap fees, though, as long as you recognize this is not a sustainable model, let alone the severe decentralization and security compromises made.
  3. But even these projects will be forced to increase fees if they get any traction, to be replaced by newer, more centralized L1s. It’s a race to the bottom that’s not sustainable long term.
  4. Currently, sustainable options do exist, like Binance Smart Chain (at least economically) or optimized rollups, which can offer fees in the ~$0.10-$1 range.
  5. Long term, rads are the only solution that can scale to millions of TPS, attaining global scale, while remaining technically and economically sustainable. That they can do this while remaining highly secure, decentralized, permissionless, trustless and credibly neutral is indeed magical. As a wise man once said, “Any sufficiently advanced technology is indistinguishable from magic”. That’s what rollups and data shards are.

Rants and musings on blockchain tech. All content here in the public domain, please feel free to share/adapt/republish.

Rants and musings on blockchain tech. All content here in the public domain, please feel free to share/adapt/republish.