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Ethereum Scalability Solutions, Connext and Stakenet | XSN Research

The Capital • Dec 06, 2020

Scalability Solutions

There have been many attempts at upgrading blockchain infrastructure, with the very first one being Lightning Network, which is arguably as old as the very first Bitcoin software released by Satoshi Nakamoto in 2009. Looking into Bitcoin 0.1, there is a raw draft of code that would let users update a transaction before it was confirmed. Later, Satoshi Nakamoto explained how payment channels could work in peer to peer comms to handle off-chain transactions or more generally, value transfer. Doing so would simultaneously free up on-chain throughput, while also allowing microtransactions to take place through dedicated channels. The Lightning Network itself became a “layer-2” protocol built on top of the Bitcoin blockchain.


Transactions that occur on the Lightning Network happen completely off-chain and are only recorded at settlement. This allows for two parties to set up a payment channel, such as one used in a smart contract, that would only be settled if one of the parties closes the channel. Due to the nature of occurring off-chain, these transactions are also completely private and can occur in milliseconds.


Other scalability solutions continue to be developed to address the growth problem posed by blockchain. Besides Ethereum L2 solutions, which we will review later in this article. At the top of most lists is Ethereum 2.0, which is hoped for by many to solve the crushing fees on the Ethereum blockchain. ETH 2.0 or Serenity, will use a new blockchain technology called sharding, which essentially splits blockchain data into its own dedicated “shard chains”. These shards can be programmed for specific functions. The idea is that for certain types of transactions, only one “shard” of the blockchain will need to be used, leaving the other shards clear for other purposes. ETH 2.0 will have 64 shards, each capable of about 50 Transactions Per Second (TPS), for a total of 3200 TPS in a best-case scenario. But this doesn’t provide Ethereum infinite scalability — the moment sharding is fulfilled, Dapps and Defi projects will start utilising on-chain aspects even more, causing the demand for Layer-1 transactions to rise faster. Therefore, this could only be a temporary way out, and in a short period we end up in the same situation.

Ethereum Layer-2 Types

Different Ethereum L2 solutions try to scale:

  • Payments
  • Smart contracts
  • Computation and processing power.

One thing these solutions have in common is that they move the workload off-chain and use permissionless blockchains as anchors to guarantee security.

There are several branches of off-chain scaling solutions for Ethereum and EVM-compatible chains: 


1. State channels

Normally implemented on blockchains, state channels are the general form of payment channels (similar to Lightning Network (LN) for Bitcoin) where in any state-modifying operation, they support the “state updates” (payment updates in case of Bitcoin LN).

Every state channel has three steps:

  1. Two users open the state channel and lock the initial state (e.g. initial balance in LN).
  2. Users transact and update the state (e.g. balance updates in LN).
  3. Once parties have finished updates, they both submit the state updates to the smart contract on the blockchain (final balance in LN) and unlock the final state.

Projects working on state channels: Connext Network, Raiden Network, Liquidity Network, Perun Network, Statechannels, Celer Network, Counterfactual, Funfair, Machinomy, Magmo, etc.


2. Rollups

Rollups are one of the options for L2 construction that “roll up” and mass transfer transactions into a single transaction. The respective smart contract will verify all the transactions held in the single transaction. In the case of ZKrollups a “zero knowledge proof” approach known as SNARK (Succinct Non-interactive Argument of Knowledge) will generate a cryptographic proof, and publicly record the validity of the block on the Ethereum blockchain.

Loopring, Starkware, Matter Labs, Aztec and more projects are working on ZK rollups.


3. Plasma and sidechains

Plasma is a framework of secondary or child chains for creating scalable applications using a combination of smart contracts and cryptographic verification. Plasma architecture is like a blockchain tree, and on top of each child chain, more chains can be built.


A plasma chain is an independent blockchain that is anchored to the main Ethereum chain, and if disputes arise, uses fraud proofs as a way of communication between child chains and the root chain.

Plasma and sidechains might look similar in concept, but they have their differences. Read more about it here.


OMG Network, Matic Network, Gluon, Gazelle, LeapDAO and others are working on Plasma.

While projects like Skale and POA Network specifically develop sidechains.


4. Off-chain computation

Projects like Teex, Truebit, Apra and Transmute propose a secure computation solution for blockchain networks as an L2 scheme. Off-chain computation brings the computation work off the public blockchain network and only verifies the result in public when disputes arise.

The Connext Network

The Connext Network is the analogous solution to the Lightning Network, but for Ethereum and Ethereum-based assets. It is an off-chain scaling solution for the Ethereum blockchain, enabling instant, cheap, scalable, and private payment channels.

Just like the Lightning Network allows for a payment channel for BTC between two parties, the Connext Network allows for the transfer of Ethereum (or ERC20 tokens) without the need for global consensus. The main blockchain is only referenced for the one-time on-chain creation of the channel and its eventual closing.


One area of focus for Connext is entering and exiting those “Layer-2” channels. Like we said earlier, these channels operate off-chain, and only record transactions on-chain when funds are deposited or withdrawn from those channels. As such, these crossover points must be an area of focus for any L2 solution. This becomes even more of a problem in a blockchain-based economy that utilizes multiple chains on multiple protocols. How can users send value and interact with various contracts cross-chain seamlessly? Even more complex, how can different L2 solutions interact?


Transfers in these networks must take place through intermediary routers that provide liquidity, similar to how data is shared on the internet in packets — but with value instead of data. Connext nodes are chain-agnostic, meaning that the protocol can interact with multiple chains and across chains, routing value seamlessly through them.


What makes Connext the best choice for our DEX infrastructure is their recently released protocol, Vector, a cross-chain routing network that can bounce between other L2s, ETH shards, primary blockchains and even EVM-compatible chains such as Binance smart chain, Ethereum classic, TOMO chain, and others.

Vector supports conditional transfers routed over intermediary nodes, instant cross-chain and cross-asset transactions, plugin support for non-EVM turing-complete chains, zkRollups, easy deposit/withdraw interface, and low gas costs. All of this is packaged in a lightweight program, containing no more than 2500 lines of code.


Other advantages of Connext are client stability, supporting all operating systems including Windows, and live support for ETH, USDT and DAI. All these mean we will be able to easily add further pairs once we successfully implement and test Vector protocol, making us the first DEX adding support for BTC/USDT and other crypto-stablecoin pairs, without any need for wrapped coins on Ethereum mainnet.


Stakenet Interoperability

Stakenet is quite literally going to be the glue that holds these L2 solutions together. We have already debuted our beta Lightning DEX, the very first platform that enables “Lightning Swaps.” A lightning swap is similar to an atomic swap, except it occurs entirely off-chain. Balances are sent to blockchain wallets upon withdrawal from the DEX.


We have begun work on integrating the Connext network and the Vector protocol into the XSN DEX, which would add support for a number of Ethereum-based assets and L2 solutions to our platform. This integration will be complete before the public launch of the XSN DEX “Gaia”. Not only will this support lightning-fast trading of hundreds of new assets, but it will also link XSN to the booming Ethereum DeFi industry! Users will be able to conduct leveraged trades using FTT and its tokens, utilize the Compound protocol and COMP coin, and much more.


As of right now the Lightning and Connext networks are entirely separate, but they can be joined through our Lightning DEX. Someone with BTC in the LN will be able to instantly swap it for ETH or USDT (all off-chain) making the Lightning DEX the first off-chain link for off-chain L2 solutions. By integrating the Connext network, Stakenet will also reap the benefits of its chain-agnostic features, becoming the cross-chain architecture for cryptocurrencies operating on separate blockchains.


The Lightning Network DEX is only the beginning. As a code-agnostic platform, many dApps can be built on top of Stakenet. The potential applications for this are limitless, as this composability would offer smart contract applications many fascinating and exciting possibilities.

Source: The Capital.

Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. None of the content on Crypto Folds is investment advice nor is it a replacement for advice from a certified financial planner. Please do your own research before purchasing or investing into any cryptocurrency.  

Leetah Launches Presale Phase for LEET Tokens Eyeing $5 Million Soft Cap

By Press Release • 09 May, 2024
The Leetah project has officially launched its presale phase for the platform's native token, LEET. The project takes inspiration from the term "Leet" ("elite") and the features of a cheetah in a fun crypto twist. With a 5-phased roadmap, this new meme coin has a serious design that wants to bring value to its community. The ongoing presale phase aims to raise a soft cap of $5 million, a new important milestone for the project.  Leetah's Presale and Engagement Opportunities The project's presale will start at an initial price of $0.0065 for each LEET token. The team plans to leave the presale open until investors buy all allocated tokens. Specifically, with a total supply of 1,337 billion tokens, the presale will allocate 35% of this amount. Another 25% will let the team develop the project through its roadmap. LEET will go live through a decentralized exchange (DEX), for which the team allocated 30% of the token supply. The remaining 20% will cover marketing expenses (10%), airdrops (5%), and affiliates benefits (5%). The project will also feature a "Refer and Earn" program. The initiative will allow participants to earn additional LEET tokens by referring friends and family to the presale. With a 10% reward on their referrals' purchases in USDT, this program incentivizes active promotion and engagement within the community. Multi-Chain Launch Plans Leetah aims to launch on multiple blockchain platforms, including Ethereum, BNB Chain, and Solana. This approach will not only promote accessibility for investors but also set the foundation for potential expansion in the future. The project has already gained traction within select alpha communities with its unique presale strategy and innovative features. Specifically, this project's plans feature five different phases: Phase 1 (or "LeeTah is born") involves launching social channels and the website, followed by the presale phase. Phase 2 ("LeeTah grows") focuses on community building and marketing initiatives while passing a contract audit for security purposes. Phase 3 ("LeeTah roars") will see an increase in marketing efforts and community contests. At this stage, the team also expects to conclude the presale phase. Phase 4 ("LeeTah sprints") will mark the launch of Leetah's NFT collection and its listing on CoinGecko and CoinMarketCap. Finally, Phase 5 ("LeeTah Feeds") will involve the project's listing on major centralized exchanges and the launch of LEET TOOLS. About Leetah Leetah is a project driven by experienced developers to implement and test cutting-edge technologies in blockchain and digital token offerings. The project aims to be a leading name in Web3, pushing boundaries for investors and cryptocurrency enthusiasts worldwide. The ongoing presale phase for its native token, LEET, aims to raise a soft cap of $5 million. Leetah plans to launch on multiple blockchain platforms and has an ambitious roadmap featuring 5 phases of development. With its unique concept and strong team, Leetah wants to leave its mark in the Web3 sector. Anyone curious about Leetah and the LEET token can visit the project's website . The social media pages below frequently share news on Leetah's developments. X (Twitter) | Telegram

NOWPayments Enables Cryptocurrency Purchases of Tangem Wallets: Expanding Payment Options with BTC, ETH, USDC, and More

By Press Release • 09 May, 2024
NOWPayments, a leading crypto payment gateway , is proud to announce a strategic partnership with Tangem, the world’s leading provider of secure and easy-to-use hardware crypto wallets. This collaboration is set to revolutionize the way customers engage with digital currencies by enabling the purchase of Tangem wallets using a broad spectrum of cryptocurrencies. Responding to substantial customer demand within the Tangem community, this partnership facilitates the ability to purchase hardware wallets directly with cryptocurrency, providing a much-needed solution for enhanced transaction convenience and security. Through this initiative, customers have the opportunity to acquire Tangem wallets using a diverse range of digital currencies, including BTC, ETH, USDT, USDC, XRP, APE, SOL, TRX, MATIC, ADA, ALGO, LTC, DOGE, BCH, SHIB, DAI, and KAS. This not only meets consumer expectations for seamless transactions but also boosts the utility and adoption of these cryptocurrencies in everyday purchases.  Furthermore, this partnership significantly benefits our blockchain partners by increasing the transactional use and visibility of their tokens, thereby strengthening their position in the global crypto market. Tangem AG is a Swiss technology company known for its remarkably simple and secure self-custodial hardware wallet. The Tangem Wallet, the size of a standard bank card, enables users to securely store, buy, swap,, transfer, and manage thousands of cryptocurrencies anywhere and anytime, while being the only owner of your private keys. Tangem is redefining the wallet experience by delivering top-level security, simplicity and accessibility. “Our partnership with NOWPayments marks a significant milestone for Tangem, as we continue to evolve and adapt to the changing landscape of digital payments. Being able to accept payments in crypto not only expands our reach but also aligns perfectly with our mission to simplify and promote the use of cryptocurrency in everyday transactions. It underscores our commitment to innovation and customer-centric solutions, enabling us to better serve our community and partners while driving forward the broader adoption of digital assets”. NOWPayments and Tangem are committed to continuously developing and refining the infrastructure that supports digital currency transactions. This collaborative effort is a testament to our shared dedication to promoting a more inclusive and efficient financial ecosystem. About Tangem Tangem is a leading Swiss-based provider of secure hardware wallet solutions designed for the safekeeping and management of digital assets. Its mission is to empower individuals to take control of their digital wealth, with an emphasis on security, ease of use, and flexibility. Tangem's innovative products have garnered significant interest from investors and customers alike, driving the company's continued growth and success. For more information, visit the website . Follow Tangem’s latest news on X (Twitter) , Telegram , Discord , YouTube , Instagram , and LinkedIn . About NOWPayments NOWPayments is the leading cryptocurrency payment gateway offering support for over 300 digital currencies, enabling businesses and individuals to accept crypto payments with ease. The platform stands out in the market with its low transaction fee of only 0.5%, the lowest fee on the market. Clients can directly withdraw euros to their bank accounts, enhancing the convenience and usability of the service. Each account benefits from personalized attention through a dedicated account manager and round-the-clock support, ensuring a smooth and responsive user experience. With NOWPayments, embracing the power of cryptocurrencies has never been easier or more accessible. For more information, visit the website . Follow Tangem’s latest news on X (Twitter) .

Galaxis Unleashed: The Highly Anticipated Token Launch on Bybit

By Press Release • 09 May, 2024
On the 10th of May 2024 at 10AM UTC, Galaxis, a Swiss-based Web3 platform, is set to announce its initial token launch, which will be accessible through the Bybit exchange platform. Galaxis is a platform designed to empower creators and brands to build and manage their communities, ensuring that once a community is established, it remains under the sole ownership of its creator and members. Along the journey, partnerships with high-profile individuals like DJ Steve Aoki, actor Val Kilmer, and NBA personality LaMelo Ball have been established. Over the past few years, more than 225,000 NFTs have been sold, generating over 32,000 ETH ($100 million) in secondary sales of NFTs. Now, the focus is on mass distribution. CEO and co-founder Andras Kristof, who also installed the first Bitcoin ATMs in Singapore, shares some exciting news: "The next step includes supercharging the ecosystem with our $1M dollar Creator Grants programs, the CoinMarketCap Incubation, and many other exciting opportunities where both creators and members get paid. All this is happening on the Galaxis Platform, which is launching soon.” Galaxis, as a post-hype NFT utility platform, believes that this new technology will transcend the hype and bring real value to all industries beyond Web3. 

MAOCAT Successfully Raises Presale Funds, Bringing Back the Memecoin Hype

By Press Release • 09 May, 2024
The team working at MAOCAT has recently acknowledged the great success of the project's presale fundraising round. With this operation, they have managed to raise a significant amount and attract the attention of investors and meme fans. The project's diverse ecosystem, featuring staking, farming, launchpad, and NFT marketplace functionalities, is proving appealing. With many memecoins failing to gain traction in the presale stage , MAOCAT is already standing out in this sector. A Rare Successful Presale Story Crypto enthusiasts know that presales are a crucial phase for any project, where success is elusive. While many projects have not even managed to survive the presale phase, MAOCAT has already managed to raise over $300,000. This means that the team has already allocated more than half of the available tokens for the presale. The presale token quantity stands at 3,000,000,000 tokens, while the total supply is 5,000,000,000 MAOCAT tokens. This means the team reserved 60% of the total supply (3,000,000,000 tokens) for the presale allocation. The remaining 40% will help fund future initiatives and ecosystem development for MAOCAT.  The presale will follow a gradual increase in token price, from $0.0015 per token in Phase 1 to $0.003 per token in later phases, with a selling quantity of 300,000,000 tokens per phase. The project also has a clear taxation structure: Marketing Tax: 3% Liquidity Pool (LP) Tax: 3% Development Tax: 2% Buy and Sell Taxes: 0% This taxation structure aims to ensure the project's long-term sustainability and growth. MAOCAT has already shown itself as a rare success story in presales, as its numbers are showing. Building a Diversified Ecosystem with MAOCAT The project's ecosystem relies on various innovative features to provide a diverse and profitable experience. MAO CAT offers NFT minting, farming, launchpad, and a marketplace for trading and collecting. These features allow users to participate in the fast-growing NFT market and earn from their investments. Additionally, the project's fixed staking feature provides stability and rewards for holders of $MAO. Future updates will also include the ability to launch tokens through the IDO process and acquire MAO CAT NFTs. With a diverse ecosystem, MAOCAT aims to capture various market segments and continue growing in popularity and value. The rarity tiers of the 10,000 MAO CAT NFT collection offer unique benefits for holders. Moreover, the project plans to fairly mint and reveal these NFTs through different methods. With MAOCAT, users can benefit from owning rare and legendary NFTs while supporting the growth of the underlying project. About MAOCAT Derived from the Chinese word "máo," MAOCAT is an Ethereum-based memecoin that has gained popularity worldwide. Thanks to its unique features and capabilities, MAOCAT aims to create a robust blockchain ecosystem with a strong community. This team's idea is to enter a market where dog-themed memecoins are prevailing and bring something fresh to the table. An early adopter of the project can easily participate in the presale on the Ethereum chain. In order to do so, one only needs to connect a wallet to the presale purchase window and send ETH. With over $300,000 already raised in the presale round, MAOCAT has shown how serious it is about its vision. The project's official website and whitepaper represent an easy-to-read, simple suite of information for any crypto enthusiasts. Furthermore, MAOCAT's social pages constantly update the community on new developments and milestones. X (Twitter) | Telegram | Instagram | YouTube
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