Quantstamp Labs
October 6, 2020

Ethereum gas fees are steadily rising. As fees continue to break all-time highs, non-whale DeFi users are slowly priced-out of DeFi because transaction fees are eliminating their profits. In addition, many non-DeFi applications such as gaming applications are becoming unusable on Ethereum Layer 1. 

The Ethereum gas price recently experience high volatility.

As the demand and popularity of Ethereum increases, transaction fees are likely to continue to rise. To address this, many projects including OMG Network, SKALE Network, and IDEX are producing scaling solutions that drastically reduce the cost and increase the speed of transactions for users while keeping users in control of their assets. 

Tether on OMG Network

Tether (USDT) is the stablecoin with the most liquidity in the entire blockchain ecosystem. Tether has a 15 billion USD market cap and trading volumes that regularly surpass both Bitcoin and Ethereum. Historically, it is the highest consumer of gas compared to any other smart contract on Ethereum (Uniswap recently surpassed Tether). On August 19th, Bitfinex, the issuer of Tether, integrated the OMG Network in order to enhance the user experience of Tether.

Tether has the 3rd highest market capitalization out of all cryptocurrencies. Image source: coinpaprika

In order for an exchange or user to access their Tether on the OMG Network, they must first deposit Tether into a smart contract on Ethereum Layer 1. Once Tether is deposited, users are eligible to transfer their Tether on OMG Network. The Layer 2 OMG Network is composed of its own blockchain with blocks produced by a single operator. After every block is added to the OMG Network chain, the operator submits the merkle root of the transactions in each OMG block on Ethereum Layer 1.

A “watcher” is used to keep the single block producer accountable. The watcher views all data produced by the single block producer and, in the event that the block producer submits invalid information or attempts to cheat the network, the watcher uses the merkle roots submitted to Ethereum Layer 1 to cryptographically determine if invalid activity took place. If invalid behavior is detected, the watcher notifies users, who have time to challenge invalid behavior and then safely withdraw their funds

Bitfinex will initially use OMG Network to facilitate user transfers of Tether between large exchanges. OMG Network is powered by an implementation of Plasma called MoreVP, which was audited by Quantstamp.

Enabling New Use Cases with SKALE Network

SKALE Network intends to enable new decentralized use cases by not only reducing transaction costs, but also by allowing dApp developers to deploy their own customizable SKALE chains that cater to their applications' unique needs. SKALE Network refers to these Ethereum-as-a-service Layer 2 blockchains as elastic sidechains.

Each elastic sidechain is dedicated to a single decentralized application. dApp developers have a lot of flexibility as to how their sidechain functions. For instance, since there is a monthly flat fee paid to SKALE Network Operators (similar to Ethereum miners), they can dramatically decrease transaction fees for their users by taking thousands of transactions off-chain and settling on mainnet Ethereum only when necessary. Also, these elastic sidechains are not subject to Ethereum’s storage and computation limitations. If dApp operators need more storage or computational power to run their application, they can pay for what they need.

Node operators can run multiple chains. Each chain is dedicated to a single dApp. Image source: SKALE Network

SKALE Network is ideal for potential use cases that are too costly to run solely on Ethereum mainnet. For instance, playing a blockchain-based trading card game directly on Ethereum is undesirable for users because they need to make 10s or 100s of transactions each game session, which can quickly get expensive. On the SKALE Network, users can play their trading card game without having to worry about expensive transactions, while also maintaining sovereignty over their in-game assets. Users will only have to make Ethereum transactions upon entering or exiting the elastic sidechain.

Quantstamp audited components of the SKALE Manager smart contract system which impacts SKALE Network nodes, validators, and elastic sidechains. Quantstamp also audited the SKALE Allocator contracts which manage the vesting structure of SKALE tokens for investors.

IDEX and Optimized Optimistic Rollups

IDEX is a decentralized exchange that plans to incorporate Optimized Optimistic Rollups, a Layer 2 solution, later this year to enhance user experience. Since IDEX’s inception in Oct 2017, IDEX users cumulatively paid over 7 million USD in ether for gas fees. In order to reduce gas fees for users and speed up transaction times, IDEX intends to execute trades and maintain user balances on Layer 2.

Storing merkle roots of Layer 2 blocks allows observers to mathematically prove if malicious or invalid behavior took place. Image source: IDEX

Optimized Optimistic Rollups works very similar to how OMG Network works. All Layer 2 blocks are produced by IDEX, a single block producer, and merkle roots of transactions in these blocks are stored in Layer 1 smart contracts in order to keep the single block producer accountable.

Validator nodes in IDEX’s Optimized Optimistic Rollups have the same function as watchers in OMG Network: they monitor all of the block producer’s activity in order to detect invalid or malicious behavior. One key difference is that IDEX validators have the ability to prevent invalid data from being accepted by the Layer 1 smart contracts. This means that users don't have to take action in the event that an invalid Layer 2 block is published. Any individual validator that can cryptographically prove fraud is able to prevent the invalid block from finalizing, in which case the state will automatically revert to that of the previous valid block.

Quantstamp recently audited the on-chain components of the IDEX 2.0 upgrade.

The Future of Scaling and Ethereum

Many view high fees as a detriment to Ethereum, however, high fees are also an indicator of Ethereum’s success. High fees are also driving Layer 2 development: many leading DeFi projects are already brainstorming ways in which they can drive and connect their liquidity over a Layer 2 solution.

ETH 2.0 will also put downward pressure on fees and, in combination with Layer 2 scaling solutions, will make room for a level of financial activity that is magnitudes greater than what currently exists. Ethereum is preparing to absorb as much worldwide economic activity as possible and development continues at an impressive pace.

Quantstamp 实验室






Tether的市值在所有加密货币中排名第三。图片来源 coinpaprika

为了让交易所或用户在OMG网络上访问他们的Tether,他们必须首先将Tether存入Ethereum Layer 1的智能合约中。一旦Tether被存入,用户就有资格在OMG网络上转移他们的Tether。第2层OMG网络由自己的区块链组成,区块由一个运营商生产。每一个区块加入OMG网络链后,运营商会在Ethereum第1层上提交每个OMG区块中交易的merkle根。


Bitfinex最初将使用OMG Network来促进用户在大型交易所之间转移Tether。OMG Network由Plasma的一个名为MoreVP的实现提供支持,它是由Quantstamp


SKALE Network打算通过不仅降低交易成本,而且允许dApp开发者部署自己的可定制SKALE链,以满足其应用的独特需求,从而实现新的去中心化用例。SKALE Network将这些Ethereum即服务的第2层区块链称为弹性侧链

每个弹性侧链都致力于一个单一的去中心化应用。 dApp开发者对其侧链如何运作有很大的灵活性。例如,由于每月都要向SKALE网络运营商(类似于Ethereum矿工)支付统一的费用,因此他们可以通过将成千上万的交易从链外进行,只在必要时在主网Ethereum上进行结算,从而大幅降低用户的交易费用。同时,这些弹性侧链也不受Ethereum的存储和计算限制。如果dApp运营商需要更多的存储或计算能力来运行他们的应用,他们可以为他们需要的东西付费。

节点运营商可以运行多个链。每条链专门用于一个dApp。图片来源 SKALE网络


Quantstamp 审核了SKALE Manager智能合约系统的组件,该系统影响了SKALE网络节点、验证器和弹性侧链。Quantstamp 还审核了SKALE Allocator合约,该合约为投资者管理SKALE代币的归属结构。


IDEX是一家去中心化交易所,计划在今年晚些时候加入第二层解决方案Optimized Optimistic Rollups,以提升用户体验。自2017年10月IDEX成立以来,IDEX用户累计支付了超过700万美元的乙醚气费。为了降低用户的燃气费,加快交易时间,IDEX打算在第2层执行交易并维护用户余额。

存储第2层区块的merkle根,允许观察者以数学方式证明是否发生了恶意或无效行为。图片来源。 IDEX



Quantstamp ,最近审核了IDEX 2.0升级的链上组件。



ETH 2.0还将给费用带来下行压力,并与第2层扩展解决方案相结合,将为比目前存在的金融活动水平更大的空间。Ethereum正准备吸收尽可能多的全球经济活动,发展速度也在继续。

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