What is cryptocurrency SKALE (SKL) Network and how does it work? A deep dive into its scalability solutions

What is SKALE Network (SKL)?

The SKALE Network is a Layer-2 scaling solution designed to alleviate congestion on the Ethereum network. It operates by creating a sidechain environment where developers can host and build decentralized applications (Dapps) using SKALE elastic sidechains instead of the Ethereum mainnet.

As Ethereum transitions to Ethereum 2.0, which promises faster transactions and scalability through a shift to the Proof of Stake protocol, SKALE provides an immediate scaling solution. Users can customize their sidechains by selecting protocols, sidechain size, virtual machine, parent blockchain, and security measures to create a configurable Elastic Chain tailored to their Dapps.

SKALE Network's infrastructure is highly scalable, interoperable with Ethereum, and supports a network of Elastic Sidechains. Developers pay monthly subscriptions for using these sidechains, which improves Dapp performance on Ethereum by reducing latency and increasing throughput, facilitating faster transactions across the ecosystem.

How does SKALE Network work?

At the core of the SKALE Network project is the concept of Elastic Sidechains. These sidechains function as standalone blockchain systems that are connected to another blockchain ecosystem, specifically, the Ethereum platform. These sidechains are termed "Elastic" because users can tailor them to their requirements. Developers have the flexibility to customize the sidechains for their Dapps by choosing consensus protocols, virtual machines, parent blockchains, and defining security protocols.

Once developers have configured their sidechain, they can subscribe to use it for developing and hosting decentralized applications (Dapps). Smart contracts on these sidechains interact with mainnet contracts, ensuring interoperability between the Ethereum platform and SKALE sidechains. Despite using elastic sidechains, users retain access to the Ethereum mainnet.

SKALE facilitates transaction execution through sidechains by validating multiple transactions simultaneously and then sending them back to Ethereum for bulk verification. This process helps speed up transactions during network congestion. Additionally, SKALE sidechains are suitable for testing Dapps, as any bugs or crashes in the sidechain won't affect the mainnet front-facing Dapp.

Who founded the SKALE Network? (A brief history of SKALE Network's origins)

SKALE Network was formally introduced in 2018, established by Jack O'Holleran and Stan Kladko, both experienced in blockchain and cryptography. O'Holleran specializes in machine learning, blockchain technology, and artificial intelligence, while Kladko boasts almost twenty years in enterprise infrastructure technologies and cryptography. Notably, Kladko is among the leading contributors to the Ethereum Foundation and Ethereum research.

What sets SKALE Network apart from others?

SKALE Network's uniqueness lies in its ability to provide cost-efficient operation of Dapps during Ethereum network congestion, when gas prices rise and Dapp management becomes costly. The project also stands out for its fast transaction throughput, which accelerates verification during high traffic periods on the platform.

Additionally, SKALE offers increased storage capacity and establishes a scalable environment for testing new features without impacting the mainnet in case of bugs or issues. Its combination of faster transactions, effective scaling, high throughput, and low latency makes SKALE a distinctive and valuable project.

What contributes to the value of SKALE Network?

SKALE Network's value stems from its technology, technical capabilities, utility, and widespread adoption. Its use of Elastic Sidechains allows users and developers to customize sidechains to meet the specific requirements of building particular Dapps. Additionally, SKALE's value is evident in its ability to address the limitations of Ethereum, which struggles to support high traffic, leading to increased gas prices during network congestion, making Dapp development and hosting less sustainable.

The intrinsic value of SKALE is determined by its technology and use cases, which may not always align with the market price of its cryptocurrency, SKL. The market value of SKALE is subject to the volatility typical of the cryptocurrency market and can be influenced by various factors affecting the SKL price. These factors include the development team's activity, upgrades and updates, technological advancements, partnerships, and other significant events.

What is the circulating supply of SKALE Network (SKL) coins?

The current circulating supply of SKALE Network (SKL) coins is 5,179,144,337. SKALE Network has a limited total supply, serving as an anti-inflation measure. Unless the decentralized governance model on the SKALE Network votes otherwise in the future, no new SKL will be minted once the total supply is depleted. The maximum supply of SKL is 7,000,000,000.

Multiplying the circulating supply of SKL coins by the current price of SKALE Network in the market yields the market capitalization of SKALE Network. This market cap determines SKL's rank compared to other cryptocurrencies in the market and also defines its market share and dominance.

Other technical data

SKALE Network utilizes nodes to facilitate transactions and operations, with the node ecosystem comprising subnodes and Node Cores. Node Cores oversee network functions and operations, serving as the interface for users to stake, deposit, withdraw, and claim SKL tokens. Subnodes provide elasticity to the network, participating in consensus mechanisms, running the Ethereum Virtual Machine, and managing interoperability. They enable interchain communication, connecting sidechains and the Ethereum network to create a network of sidechains.

SKL serves as the utility token of the SKALE protocol, offering multiple functions such as paying for sidechain subscriptions, accessing Dapps hosted on the network, conducting transactions, staking, and participating in network governance.

What measures ensure the security of the SKALE Network?

SKALE tokens (SKL) are crucial for securing the SKALE Network. The network employs a pool validation model with node validators to safeguard against the compromise of small sets of nodes, which are typically more vulnerable to corruption.

Security is ensured by a large number of validator nodes that are assigned to different arbitrary tasks, randomly rotated. These validator nodes are automated to frequently rotate, maximizing network security while efficiently utilizing available resources.

Validator nodes enhance network security by staking a significant amount of SKL tokens, which are held on the Ethereum network in a special smart contract managed by the SKALE Manager. This smart contract monitors and controls token inflation on the SKALE Network, distributing payments to validators monthly as an incentive for securing the network through staking SKL.

How to use SKALE Network?

Dapp developers frequently encounter issues with functionality, testing, creation, and transactions on the Ethereum network during periods of congestion. Since Ethereum has not yet transitioned from the Proof of Work to the more efficient Proof of Stake protocol, SKALE addresses congestion by linking with Ethereum through Elastic Sidechains.

Developers can test Dapps without impacting the mainnet's front end and easily switch to customizable sidechains for rapid transaction execution and Dapp creation and testing when Ethereum's GAS prices surge. High GAS prices on Ethereum can render Dapp development prohibitively expensive and unsustainable, making SKALE an appealing alternative for Ethereum Dapp developers.

The SKL token is utilized for staking and the reward system that incentivizes validator nodes. SKL can also be traded on the market for profit.

How to choose a SKALE Network wallet?

SKL is an ERC-777 token, fully compatible with ERC-20 tokens, allowing storage in any Ethereum-supporting wallet. The choice of wallet depends on storage needs and usage intentions.

Hardware wallets like Ledger or Trezor offer the most secure option with offline storage and backup. However, they require technical knowledge and are more expensive, suitable for storing larger amounts of SKL by experienced users.

Software wallets are a free and easy option, available as smartphone or desktop apps, either custodial or non-custodial. Custodial wallets manage and back up private keys, while non-custodial wallets use secure elements on the device. They are less secure than hardware wallets, better for smaller amounts or novice users.

Online wallets are free, accessible from multiple devices via a web browser, but less secure than hardware or software wallets. Trusting the platform to manage SKL is necessary, requiring a reputable service for security and custody. They are suitable for smaller amounts or frequent traders.

Kriptomat offers secure storage and trading for SKL tokens, providing enterprise-grade security and user-friendly functionality. Buying, selling, or trading SKL is quick and secure on the Kriptomat platform.

Proof of stake in the SKALE Network

SKALE employs a Proof of Stake protocol to scale Dapps and transactions on the Ethereum network efficiently. This protocol is known for its effectiveness in blockchain environments, contributing to SKALE's scalability.

Unlike traditional mining, SKALE tokens cannot be mined, and the network does not rely on miners' computational power. Instead, validator nodes stake SKL tokens to pools to validate transactions and secure the network.

In conclusion, SKALE Network offers Dapp developers a scalable environment to test, host, and create Dapps. Developers can customize sidechain specifications, making them elastic. Ethereum's congestion issues, which lead to high GAS prices, can make Dapp development expensive and unsustainable. SKALE Network addresses this problem, facilitating the creation, development, and testing of EVM-based decentralized applications while enabling fast transactions with lower fees.

Embark on your SKALE Network journey today and be part of the crypto revolution!