John Lee Quigley

Scalability is a major roadblock on the path toward bringing blockchains to mainstream audiences. The ultimate goal of providing low-cost access to blockchain-based applications while guaranteeingsecurity and decentralization is based on the <a href="https://www.ledger.com/academy/what-is-the-blockchain-trilemma" target="_blank" rel="noreferrer noopener">blockchain trilemma</a>.&nbsp;



The blockchain trilemma is premised on the idea that we can only achieve two of the following three aims: decentralization, security, and/or scalability. This has led to countless blockchains sacrificing decentralization or security to achieve scalability, an undesirable tradeoff to say the least.



Despite this challenge, the blockchain industry has seen remarkable growth in its first decade, with a $1 trillion valuation and over<a href="https://triple-a.io/crypto-ownership-data/"> 420 million users</a>. The next few years could bring even greater milestones, with the<a href="https://github.com/Foresight-Ventures/Research/blob/main/What%20Does%20the%20Future%20Hold%20for%20Crypto%20Exchanges_Eng_Jul%202022.pdf"> number of crypto users</a> on track to breach the one billion mark within six years.



The industry&#8217;s future undoubtedly lies in building high-performance scalable blockchains, and the need for such solutions has never been as pressing as now. This piece dives deeper into crypto&#8217;s scaling problem and how it affects users and developers.&nbsp;



<h2 class="wp-block-heading">Crypto&#8217;s scaling problem&nbsp;</h2>



The cryptocurrency ecosystem faces severe limitations and bottlenecks impeding adoption. The most largely-used blockchains routinely suffer from high transaction fees, congestion, and downtimes during peak periods. And of course, these limitations remain even for projects that sacrifice a degree of decentralization to prioritize speed and low network fees.



Crypto&#8217;s scaling problem is further evident in the fragmentation of developers and users on different blockchains. DefiLlama shows there are <a href="https://defillama.com/chains" target="_blank" rel="noreferrer noopener">170 chains</a> with thousands of additional decentralized applications (dApps) for multiple use cases. The current multi-chain approach results in fragmented liquidity and increased security risks as users bridge assets across chains. It poses an even greater challenge for developers who must jump through hoops to build dApps on different chains.&nbsp;



Developers must adopt a common standard for blockchain technology to truly go mainstream. The current approach to development is widely fragmented with vastly different approaches being adopted. Most unfortunately, this fragmented approach trickles down to the end user and results in widely different onboarding and adoption processes.



<h2 class="wp-block-heading">Building a scalable Web3 with Ethereum as a backbone</h2>



Ethereum&#8217;s position as the leading public blockchain in terms of development makes it the ideal foundation for building scalable networks. This article will map out a future where Ethereum is the backbone of Web3 and will provide the necessary tooling for developers to onboard the first billion users to the blockchain industry.&nbsp;



It is easy to envision such a future given the wide adoption of Solidity, Ethereum&#8217;s native programming language. Solidity is the preferred language for blockchain developers because it is easy to learn and unlocks access to the largest community of Web3 users.&nbsp;



Solidity complements the Ethereum Virtual Machine (EVM) and provides excellent tooling for building truly decentralized applications with reduced development time and increased interoperability. The number of Ethereum developers has <a href="https://blockworks.co/news/ethereum-has-most-developers-but-these-newer-chains-are-growing-fast">risen by over 400%</a> in the past year to 5,000, which is more than two times higher than competing smart contract blockchains. Ethereum also boasts the industry&#8217;s largest DeFi ecosystem, with a significant portion of non-ETH-based TVL still attributed to EVM-compatible networks.



<figure class="wp-block-image"><img decoding="async" src="https://lh3.googleusercontent.com/knybW57YCtDbDbDXPXBD4fHmervuqwZSIoWj_8-Nmr4PFxJavQDS4LIPvUvyA5ZkZwOj2YAitn5y3Hqm5TdQQ6REZn064ta4nWn8nDbSsoJuYG8MONwGfiDU7AhfStKYlbt2POYO9RdAGcBtZpmWGx8" alt=""/><figcaption class="wp-element-caption">DeFi chains by TVL | Source:<a href="https://defillama.com/chains" target="_blank" rel="noreferrer noopener"> DeFiLlama</a></figcaption></figure>



Rather than competing with it, leveraging Ethereum&#8217;s powerful network effects is the ultimate solution to a scalable Web3 environment. A recent study by <a href="https://dartmouthblockchain.com/" target="_blank" rel="noreferrer noopener">Dartmouth Blockchain</a>, an independent blockchain research team based out of Dartmouth College, served as a third-party benchmark for developers to evaluate transaction speed and finality on eight leading blockchains including SKALE, Ethereum, Solana, Avalanche, Polygon, Fantom Network, Flow, and Near.&nbsp;&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh3.googleusercontent.com/mMBx33kEH3Z5TXUamr0fqsHWhXS-PoOd06ItR6i_M8QrrhrmMEmKprbm0_Is0WrCJtFXENu9R5zyIa0AdW9X05AjnPUypuosNgQYjMYcxeyHN0TXbelf13elg92J_sMoj6F_PIbl_DzTX8T9-63Xz8E" alt=""/><figcaption class="wp-element-caption">Source:<a href="https://www.flipsnack.com/5AC8BBFF8D6/dartmouth-blockchain-x-skale-op-ed-zkf45mhbdc/full-view.html" target="_blank" rel="noreferrer noopener"> Dartmouth Blockchain Group</a></figcaption></figure>



The study revealed that the Ethereum-native <a href="https://skale.space/" target="_blank" rel="noreferrer noopener">SKALE Network</a> is the fastest blockchain based on transactions per second and finality. SKALE posted a TPS value of 397.7 transactions per second, with 1.4 seconds finality, overtaking Solana and Fantom Network.



<h2 class="wp-block-heading">How SKALE truly scales Web3 for mainstream adoption&nbsp;</h2>



Launched in 2020, SKALE provides a compelling answer to Web3 scalability through its <a href="https://blockworks.co/news/the-investors-guide-to-the-multichain-future">modular blockchain design</a> native to Ethereum. On SKALE, developers deploy applications on interoperable app-specific chains called SKALE Chains or on shared hubs called <a href="https://skale.space/blog/modular-skale-chains-and-the-new-hub" target="_blank" rel="noreferrer noopener">SKALE Hubs</a>. Hubs are dedicated chains for games, NFTs, and DeFi protocols and are best thought of as “service stations” for a collection of dApp chains by providing them liquidity as well as swapping and marketplace services. The Hubs are a key tool to ensure proper token mapping and standarization within the SKALE ecosystem and they’re a huge unlock for developers who now only need to concentrate on integrating with a few chains rather than all the other SKALE Chains.



Each SKALE Chain, both Hubs and dApp chains, are able to scale infinitely since they are dedicated to different categories of blockchain applications. Games, after all, are much different from NFTs or DeFi. That’s why SKALE’s model enables each chain to scale much more easily and economically than on the Ethereum mainnet, where everything lives on the same network and is often clogged during peak periods.



SKALE taps Ethereum for security by hosting its core smart contracts called the SKALE Manager on the Ethereum network. These contracts control functionalities such as validator nodes, staking delegation, and SKALE chain deployment. <a href="https://blockworks.co/news/finally-web3-gets-sustainable-architecture">Instead of competing with Ethereum</a>, SKALE further builds on the legacy network&#8217;s success by allowing developers to build with Solidity and full EVM-compatibility.



SKALE&#8217;s novel approach to Web3 scalability brings unprecedented benefits. For example, it introduces increased interoperability and standardization of blockchain applications. Different SKALE chains implement the same fundamental features and developer standards, ensuring that users can, among other things, seamlessly transfer assets between chains.



Another benefit is that developers can <a href="https://blockworks.co/news/the-future-of-web3-needs-zero-gas-fees">offer zero gas fees to users</a> through a unique subscription fee model developed by SKALE. The applications hosted on each SKALE chain pay the gas fee in advance to validators, enabling end users to enjoy a seamless gasless experience currently unavailable on other blockchain networks. SKALE <a href="https://skale.space/stats" target="_blank" rel="noreferrer noopener">has saved users</a> over $700 million in gas fees across more than 55 million transactions processed since launch. The gas fees that users avoid is another example of SKALE’s overarching commitment to help create invisible Web3 experiences. Put simply, they believe if we want to see the next wave of mass adoption into Web3, the user experience should feel more like Web2.&nbsp;



And this commitment is proven by the blockchain projects that are already building mainstream-ready applications on the SKALE Network. For instance, <a href="https://ruby.exchange/" target="_blank" rel="noreferrer noopener">Ruby</a> is a SKALE-based decentralized exchange protocol that incentivizes users with high yield and lower swap fees for holding NFTs. Another project,<a href="https://nftrade.com/" target="_blank" rel="noreferrer noopener"> NFTrade</a>, supports the trading of SKALE-based NFTs through integration with SKALE&#8217;s NFT community hub chain, Calypso. Yet another project named <a href="https://skale.space/blog/exorde-is-now-live-on-skale" target="_blank" rel="noreferrer noopener">Exorde</a> has taken on the formidable task of helping identify and limit the spread of misinformation through blockchain technology. Exorde must process massive amounts of data to provide a result that is reliable, useful, and unbiased, and it’s no surprise they’ve leaned on SKALE’s infrastructure to make it happen.&nbsp;



The SKALE developer ecosystem is not resting on its laurels and is continually exploring newer ways to bring even greater scalability to Web3 applications. SKALE <a href="https://skale.space/blog/skale-to-launch-zk-initiative-in-january-2023" target="_blank" rel="noreferrer noopener">recently launched</a> its Zero-Knowledge (ZK) Proofs initiative. ZK technology enables users to verify ownership of certain assets or information without disclosing their identity or further details about the owned items. An adaptation of the technology for blockchains will significantly improve user privacy and increase scalability as it compresses data requirements on applications.&nbsp;



ZK technology is still in its infancy and faces limitations such as centralization and high implementation costs. Yet, developers are optimistic that further development of ZK technology will prove instrumental to further adoption by mainstream audiences.&nbsp;



In a real-world example, DeFi users can interact with protocols with improved security and privacy. ZK technology primarily benefits end users and will likely garner interest as the latest generation of crypto-native ZK products launches in the coming months and years.



<h2 class="wp-block-heading">The future of blockchain scaling&nbsp;</h2>



The smart players in the cryptocurrency industry are building the infrastructure to onboard the next billion users. A key way they’re doing this is by standardizing blockchain applications and cutting-edge scalability solutions. SKALE&#8217;s mainstream-ready infrastructure underpinned by Ethereum delivers these solutions and is already gaining traction within the EVM-developer community.



SKALE envisions a highly interoperable <a href="https://blockworks.co/news/the-investors-guide-to-the-multichain-future">multichain future</a> where developers adopt the same standards and tooling to build apps on specific chains and for diverse use cases. This model is vastly superior to the current state of blockchains, where the developer and user growth is fragmented.



The upcoming release of SKALE ZK adds to SKALE&#8217;s other innovations, including full-EVM compatibility, multi-chain technology, developer-friendly SDKs, and zero gas fees. These solutions combine to position SKALE as an innovator that’s helping Web3 applications enjoy unprecedented scalability.



This content is sponsored by <a href="https://skale.space" target="_blank" rel="noreferrer noopener">SKALE</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

What We Need To Scale Blockchain Technology Into the Future

The blockchain industry has evolved significantly from its early years. A novel move to provide the world with peer-to-peer digital cash has birthed several multi-billion dollar networks and applications with the potential to improve the global financial system.&nbsp;



However, the current state of blockchain technology is far from perfect and is akin to building multiple highways to a single destination. <a href="https://earthweb.com/how-many-blockchains-are-there/" target="_blank" rel="noreferrer noopener">Over 1,000 blockchain networks</a> offer the same use case: powering decentralized applications. Users interact with too many protocols and still pay ridiculously high fees to access the most popular blockchains. The rest of the networks are lonely highways with little to no user traffic or developer activity.



The idea of a multichain future has emerged in recent years as a solution to the highly-fragmented state of blockchain networks. This piece explores a new definition of the multichain future where one network is home to multiple chains. This is in contrast to the previously recognized definition of multichain where various dApps are designed to interact with a handful of layer-1 blockchains. A well-known example is the decentralized exchange Pancake Swap, which is on both the BNB Smart Chain and Ethereum.&nbsp;



To illustrate this new definition, the following article will dive into a cutting-edge project named <a href="https://skale.space/" target="_blank" rel="noreferrer noopener">SKALE</a> that adopts a unique approach to building high-performance networks fit for mainstream adoption.



<h2 class="wp-block-heading">The current state of blockchain networks</h2>



Blockchain networks provide the underlying infrastructure for users to access the myriad of decentralized applications built by developers. Yet, user experience on different blockchains varies dramatically, and the poor interoperability between these systems makes it difficult for developers and users to switch from one network to another seamlessly.



A classic example of such difficulty is when users try to interact with different blockchains by moving funds across different networks using bridge protocols. Aside from a confusing user experience on bridge protocols and limited interoperability, users take on immense security risks, as evidenced by the <a href="https://blog.chainalysis.com/reports/cross-chain-bridge-hacks-2022/" target="_blank" rel="noreferrer noopener">over $2 billion</a> stolen from blockchain bridges in the past year.



These risks exist because every blockchain network and their respective bridges have its own sets of rules and protocols. Since there are so many blockchain networks with segmented developer communities, innovation is fragmented across those networks, which adds to a confusing user experience. In this reality, no one wins. When developers and users are spread across L1s and L2s, innovation is dispersed or hidden away in silos.&nbsp;



With all this in mind, it’s unsurprising that the Ethereum mainnet remains the most widely used blockchain despite its relatively high gas fees. The complexities of going cross-chain by adopting layer-2s or the newest layer-1 blockchains impedes on user adoption. The power of Ethereum’s network effects are hard to overstate for users and even harder to overcome for up-and-coming blockchains.&nbsp;



<h2 class="wp-block-heading">Is a new multichain model the key to scaling blockchains?</h2>



The perfect idea of a multichain future is one where developers and users can glide across different networks and applications seamlessly and intuitively. However, the prospect of such a multichain world grows increasingly bleak with each new blockchain that arrives on the scene. The diverse set of protocols and systems involved makes interoperability increasingly tricky. While blockchain technology depends on an inherently decentralized structure far from any singular governing authority, there’s still a long-ignored opportunity in the space for establishing <a href="https://www.investopedia.com/terms/s/standardization.asp" target="_blank" rel="noreferrer noopener">standardization</a> in the industry. An example of standardization in the traditional financial system is the requirement for publicly listed US companies to adhere to generally accepted accounting principles (GAAP). This enables investors to research two companies and know they’re comparing apples to apples.



Similarly, Web3 could benefit from the efficiencies enabled by standardization, and perhaps a new multichain model built from the ground up is the solution. SKALE is a modular blockchain network that offers a multichain experience to power mainstream-level applications. SKALE’s infrastructure consists of EVM-compatible, app-specific blockchains and hubs dedicated to different categories of Web3 applications. Hubs can be thought of as <a href="https://skale.space/blog/modular-skale-chains-and-the-new-hub" target="_blank" rel="noreferrer noopener">service stations</a> that, according to SKALE co-founder and CEO Jack O&#8217;Holleran, “provide liquidity, swapping, and marketplace services to dApp chains” dedicated to gaming, NFTs, and other use cases. This Hub Architecture connects each individual, yet still interoperable blockchains called SKALE Chains.



SKALE launched its mainnet in 2020 and has rapidly scaled its solution with a focus on providing <a href="https://blockworks.co/news/the-future-of-web3-needs-zero-gas-fees" target="_blank" rel="noreferrer noopener">zero gas fees</a> to users. The SKALE network taps into the Ethereum network’s security to achieve consensus through mainnet smart contracts, known as the SKALE Manager, that controls staking delegations, validator nodes, SKALE chain deployment, and other core functionalities. The network’s validator incentives are derived from the costs incurred by developers who pay a fee to launch and sustain application-specific SKALE chains.&nbsp;



While the multichain future is uncertain to industry observers, <a href="https://cointelegraph.com/news/a-multichain-approach-is-the-future-of-the-blockchain-industry" target="_blank" rel="noreferrer noopener">they acknowledge</a> that “it could revolutionize the way we use blockchain technology.” SKALE’s version of multichain is the perfect platform for developers and users to realize the desired outcome.&nbsp;



SKALE is an accessible platform for the broadest community of blockchain developers because each chain is EVM-native. Each application-specific chain’s high throughput and scalability enable developers to offer zero gas fees to users while building a wide range of compute-intensive dApps like <a href="https://exorde.network/" target="_blank" rel="noreferrer noopener">Exorde</a>, which is currently unimaginable with other blockchain networks. This zero-gas environment is enabled by SKALE fuel or <a href="https://docs.skale.network/learn/skale-chain-fuel" target="_blank" rel="noreferrer noopener">sFuel</a>. This unique approach to network security prevents spam transactions or DDoS attacks through this gas token. Because it’s valueless, it is a purpose-built tool to help developers focus on scaling on secure chains without the distraction of speculation.



Lastly, a uniform set of tools support all SKALE chains&#8217; interoperability, allowing users to freely move assets without the risks associated with contemporary multichain bridges. For example, <a href="https://skale.space/blog/what-is-skale-metaport" target="_blank" rel="noreferrer noopener">SKALE’s Metaport</a> is a UX widget that allows users to interact with underlying API layers and bridge their assets between SKALE chains. So if someone wants to transfer a game token from the <a href="https://nebulachain.io/">Nebula Gaming chain</a> to the <a href="https://blog.ruby.exchange/co-launching-the-europa-liquidity-hub-for-skale/" target="_blank" rel="noreferrer noopener">Europa Liquidity chain</a> to yield farm, and back again, Metaport allows them to do this safely and intuitively.&nbsp;



<h2 class="wp-block-heading">SKALE’s multichain model delivers huge benefits</h2>



The opportunities for a multichain network with mainstream-level capacity for dApp developers and users are limitless. SKALE’s current infrastructure brings the following outstanding benefits to users, developers, and businesses:



<h3 class="wp-block-heading">1. Ease of adoption</h3>



In 2022, SKALE <a href="https://skale.space/blog/skale-2022-year-in-review-building-the-foundation-for-the-future-of-web3" target="_blank" rel="noreferrer noopener">recorded more than</a> 30 million transactions spanning over 240,000 users. While these are strong numbers, the SKALE ecosystem is hoping to maximize the unique opportunities of the bear market to continue onboarding new users and empower developers to build high-performance dApps on the protocol.



The key to a protocol’s long-term success is continuous developer investment, and as such, SKALE is compatible with <a href="https://soliditylang.org/">Solidity</a> and the entire EVM suite of products. This uniform set of protocols and applications makes SKALE easier for developers to build on and ultimately benefits users with a better experience on more applications.&nbsp;



<h3 class="wp-block-heading">2. Sustainability</h3>



SKALE implements a highly sustainable proof-of-stake consensus model that allows each validator to serve as a sub-validator for up to eight SKALE chains. Furthermore, the adoption of application-specific chains allows the network to scale sustainably.&nbsp;



Adding new chains or increasing network usage does not impact hardware requirements for network validators. Existing validators are randomly assigned to new SKALE chains, while developers only add new chains as their user base increases. As dApps grow their user base and/or transaction count, their SKALE chain will be able to linearly scale without needing to worry about high costs or network congestion.



<h3 class="wp-block-heading">3. Predictable fees for developers and users</h3>



As mentioned earlier, SKALE is the only blockchain that guarantees <a href="https://blockworks.co/news/the-future-of-web3-needs-zero-gas-fees" target="_blank" rel="noreferrer noopener">zero gas fees</a> for end users. The network achieves this by using a two-way subscription model. Initially, developers pay a one-time fee (via staking SKL) determined by SKALE governance to launch their chain.



Next, each entity that creates a SKALE chain pays a monthly subscription fee (paid from the staked SKL) to cover the resources needed to operate the chain. Because the subscription fee largely depends on dApp usage on their chain, developers and businesses can predict costs while offering users a gasless experience. The staking of SKL and payment to validators are controlled by the SKALE manager on Ethereum.&nbsp;



<h3 class="wp-block-heading">4. Interoperability across SKALE chains and Ethereum (and other networks)</h3>



SKALE’s modular blockchain design allows for increased interoperability within the different chains in the ecosystem. SKALE unlocked this interoperability with its recent V2 upgrade, which among other things, enables the smooth transfer of assets across chains using its Metaport widget.



SKALE is already interoperable with Ethereum, hosting 25 of its core smart contracts on the legacy network. Additionally, users can mint Ethereum-generated tokens (such as ERC-20 and ERC-721) and use them directly on the SKALE network. SKALE’s interoperability with Ethereum and its Hub Architecture solves the persistent problem of liquidity fragmentation, as SKALE dApps can easily tap into liquidity from across the EVM ecosystem. The <a href="https://blog.ruby.exchange/co-launching-the-europa-liquidity-hub-for-skale/" target="_blank" rel="noreferrer noopener">Europa Hub</a> solves for this liquidity fragmentation seen so often through intensive on-chain applications such as gaming and NFTs.&nbsp;



<h3 class="wp-block-heading">5. Better user experience</h3>



So far, the lack of an intuitive user interface has held back much of Web3’s innovations from gaining the adoption of Web2 apps. But the future of Web3 must be user-friendly, offering the same level of convenience as its predecessor. SKALE’s multichain technology offers a clear roadmap to a drive at such an outcome by allowing multiple Web3 use cases to run in the background while users benefit from a simple yet capable interface.&nbsp;



Because SKALE users do not need SKL to pay transaction fees, they can focus on dApp experiences without worrying about fee spikes or network congestion. Users can also easily migrate assets across SKALE chains using Metaport, which replaces the current complexities posed by contemporary cross-chain bridges that connect different blockchains. These complexities are a common complaint lodged against Web3, and enterprises would benefit the most from a viable solution. A consensus is growing louder that Web3 won’t fully hit the mainstream until it provides an almost Web2 look-and-feel for users. The argument is well made that the average user doesn’t have the time or interest in learning a new suite of tools to interact with Web3. If that’s the case, enterprises would be smart to implement tools like Metaport that allow for “invisible” Web3 experiences where users don’t even know they’re necessarily using Web3.&nbsp;



<h2 class="wp-block-heading">The future is multichain&nbsp;</h2>



SKALE is setting the tone for the multichain future by pioneering a novel approach to scaling Ethereum. SKALE provides interconnected application-specific chains that tap into Ethereum&#8217;s security while supporting all EVM-compatible dApps and assets.



A multichain world where users adopt different blockchains simultaneously is highly unsustainable since diverse networks implement different protocols and rules, making them less interoperable. Plus, the user experience is greatly diminished with high transaction fees and the complexities of migrating from different blockchains.



But SKALE chains set themselves apart by being highly interoperable with full capacity to host dApps from different Web3 verticals. Everyone wins — users enjoy a gasless experience while developers are able to access a dedicated infrastructure with infinite scalability. SKALE’s network of networks delivers an unparalleled Web3 experience and provides the springboard for multichain technology to reach its full potential.



This content is sponsored by <a href="https://skale.space/" target="_blank" rel="noreferrer noopener">SKALE</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

The Investor’s Guide to the Multichain Future

Matthew Warholak

Given events like X2Y2’s decision to drop NFT royalties and the cascading effects of the FTX bankruptcy, many in Web3 are left wondering how a system built on decentralization is so vulnerable to the actions of a few. While there are exceptions, many decentralized alternatives lack the resources to compete with legacy Web2 applications.&nbsp;



<a href="https://skale.space/" target="_blank" rel="noreferrer noopener">SKALE</a> Labs CEO &amp; co-founder Jack O’Holleran believes that if Web3 wants to compete with Web2 solutions, it needs a sustainable architecture that can infinitely scale dApps. SKALE uses a modular approach to Web3, which not only keeps gas fees at zero, but also provides a healthy ecosystem – one not dependent on third-party intermediaries or recursive tokenomics.&nbsp;



We sat down with Jack to learn more about SKALE’s architecture and how it supports next-generation dapp development.&nbsp;



<h3 class="wp-block-heading">What is sustainable architecture?</h3>



Web3 architecture is generally referred to as the computational layer of a blockchain enabled ecosystem of online applications. Perhaps the greatest technical obstacle facing this layer is the blockchain trilemma. It’s a belief that a blockchain, such as Bitcoin or Ethereum, can only exhibit two of three of the following properties at a time: security, scalability, and decentralization. Sustainable Web3 architecture is an approach that solves the three properties in a way that enables it to compete with with the efficiency of web2. 



One way to achieve this sustainability is through using a modular multichain blockchain design instead of a monolithic one. O’Holleran explains how monolithic chains are unsustainable by equating them to a rideshare platform with a fixed number of drivers.&nbsp;



That fixed supply is only optimal between a narrow window when demand is high enough for driver profitability and low enough to offer fair prices to users. Monolithic blockchains struggle this way in that it is difficult to securely adjust blockspace so that users and validators are happy. When demand is too high, users either have to deal with high latency and/or high fees. And when demand is too low, the protocol struggles to offer sustainable revenue to validators.&nbsp;



Conversely, a modular design, like SKALE’s, adds scalability through decoupling components of their stack and/or their resources so that total supply of computing power can easily be adjusted to meet demand.&nbsp;



Additionally, with their model, SKALE chains pay for compute resource vs. paying per transaction, making a modular design more sustainable from a business perspective. For example, instead of renting a car and paying per mile, you rent a car’s engine for unlimited use over X amount of time. With a pay for capacity vs. per transaction cost model, the modular design’s economic viability is an order of magnitude greater.&nbsp;



<h3 class="wp-block-heading">Why interoperability is essential to sustainability</h3>



But if this car is limited to a single town or neighborhood, then this model has very little value. This type of limitation is why SKALE never set out to be an “ETH killer.” SKALE chains are EVM compatible, which means that users can transact across both SKALE and Ethereum – connecting NFT, liquidity, and gaming hubs across both ecosystems.&nbsp;



This type of Interoperability is a core component of its architecture and enables dApp users to get the same benefits and functions of Ethereum, such as staking, slashing, node rotation, node assignment, key generation, and more.



A big challenge to the multichain model is preventing the fragmentation of liquidity and common resources. If each new chain needs its own exchange and NFT marketplace, then much of the computing resources are duplicated throughout the network – ultimately making it inefficient to move liquidity from one app to another. SKALE addresses this challenge through dedicating specific chains called SKALE Hubs for the specific <a href="https://skale.space/blog/modular-skale-chains-and-the-new-hub" target="_blank" rel="noreferrer noopener">purpose of providing liquidity, swapping, and marketplace services</a>. Each hub can have its own specialization. For example, there is the <a href="https://www.calypsohub.network/" target="_blank" rel="noreferrer noopener">Calypso NFT Hub</a>, the Europa Liquidity Hub, and the forthcoming Nebula Gaming Hub.



<h3 class="wp-block-heading">The importance of an efficient zero fee model&nbsp;</h3>



Lastly, and perhaps most important for user adoption, is the fee model. With SKALE, there are no gas fees. Fees are paid up front by developers in native SKALE tokens. The setup also prevents MEV and uses S-Fuel to protect against spam. The end result is that users can trade on DEXes like <a href="https://blog.ruby.exchange/how-skale-solves-the-front-running-problem/" target="_blank" rel="noreferrer noopener">Ruby Exchange without front-running</a> bots and traders extracting value from their trades. But the efficiency isn’t limited to exchanges, it improves user experience throughout the ecosystem by eliminating the cost to transact.



This model puts protocol scalability in the hands of people creating real world use cases with blockchain. So when developers come up with a killer app, they can develop a business model that bakes in the necessary computing power needed to scale with demand. This sustainable architecture is enabling a new class of applications like <a href="https://exorde.network/" target="_blank" rel="noreferrer noopener">Exorde’s</a> decentralized mechanism for crawling and validating information on the web. It is being used to create a global prediction market and crowd intelligence platform – use cases that O’Holleran says are “impossible on any of any other chain.”&nbsp;



<h3 class="wp-block-heading">How does the SKALE zero-gas-fees model help dapps compete with centralized ones?&nbsp;</h3>



The real value of dApps is the ability to deliver solutions that don’t require trust. But as O’Holleran put it, “What are the things you would actually want to be trustless?” He sees payments, reputation scores and social networks as some of the most important applications that could compete with centralized alternatives. And SKALE’s zero-fee model enables developers to create trustless solutions that can meet the full demand of their competitors.&nbsp;



O’Holleran listed a new gated content media ecosystem as an example of one of these killer apps utilizing their zero fee model. The current web2 model exploits content creators by dictating ad revenue sharing rates and censoring content. As a result, creators have been on the hunt for better solutions. Web3 has the potential to offer an alternative by removing the need for a third party intermediary like Twitter, YouTube or Instagram. It can enable a permissionless ecosystem where creators maintain full ownership of their business model.&nbsp;



This idyllic vision for the future is what ignited the enthusiasm for Web3. But it requires a complex system of micropayments that can get expensive quickly on the Ethereum network. This friction slowed much of that initial momentum in Web3 but SKALE’s zero fees is providing the grease needed for it to pick back up.&nbsp;



For example, <a href="https://firesidechat.com/" target="_blank" rel="noreferrer noopener">Fireside Chat</a> is a new Web3 media platform implementing this decentralized model on the SKALE network. It was founded by Falon Fatemi and Mark Cuban and recently partnered with SKALE Labs to kickstart the transition to Web3. Creators like <a href="https://www.businesswire.com/news/home/20221209005340/en/Tyler-Henry-Launches-The-Tyler-Henry-Collective-on-Fireside-The-First-Interactive-Streaming-Service-to-Reach-Fans-Globally">Tyler Henry</a>, a world-famous clairvoyant medium, are using the platform to engage their audience in new creative ways. In Tyler’s case, the platform provides the tools needed to host readings in a private or in a live group setting.&nbsp;



While these use cases are an exciting step for Web3, not every application requires the same network conditions. SKALE’s multichain architecture provides the customizability needed to expand and utilize the computing power of a blockchain – without the block size debates and governance bottlenecks. This sustainable architecture is what makes blockchain a solution that can finally scale to provide fundamental value to users and builders.



This content is sponsored by <a href="https://skale.space" target="_blank" rel="noreferrer noopener">SKALE</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Finally, Web3 Gets Sustainable Architecture

<div id="highlights-block_63409483134f2" class="highlights">
 <ul>
 <li>SKALE is unique from all other scaling solutions because it is able to deliver zero gas fees</li>
 <li>Running a dedicated chain for different use cases and applications enables infinite scalability</li>
 </ul>
 
</div>



First-generation blockchain networks relied heavily on network fees to provide security and incentivize adoption. However, a decade of massive user adoption makes it evident that the future of Web3 will be “gasless.”&nbsp;



The current Web3 business models of metaverse gaming, NFT collectibles and creator-first content platforms will struggle to scale to billions of users if they require users to pay fees for each transaction. In sharp contrast, a zero gas fee model delivers a frictionless experience to Web3 users and is already a reality for blockchain developers and users on the SKALE Network.&nbsp;



Before diving deeper into the concept of zero gas fees, this piece will clear common misconceptions surrounding the recent <a href="https://cms.blockworks.co/the-investors-guide-to-the-ethereum-merge/" target="_blank" rel="noreferrer noopener">Ethereum Merge</a>. The landmark event is the first step in a long list of Ethereum scaling upgrades that will drive fees toward zero on the execution layer.&nbsp;



<h3 class="wp-block-heading">Misconceptions about Ethereum&#8217;s scaling upgrades&nbsp;</h3>



<ol class="wp-block-list"><li>The Merge will reduce Ethereum gas fees</li></ol>



According to Ethereum founder Vitalik Buterin, <a href="https://www.youtube.com/watch?v=kGjFTzRTH3Q" target="_blank" rel="noreferrer noopener">the roadmap</a> to low gas fees on Ethereum comes in five different phases: The Merge, The Surge, The Verge, The Purge and The Splurge. The Merge does not have any notable impact on Ethereum’s network performance. Instead, it lays the foundation for implementing several scalability and performance-focused upgrades.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh5.googleusercontent.com/PhkHyMJ9e7um_IHwoLHLS4fdIeX4_URxuNIgG-_npZqVZ8adnAswwRCCYLDBCuAc09v7yHTmxN97dw8vYOvcHhTjakjZrrd8kTxzvph_HYZowrpdx76hhoHILpBprfZbsOjeXmOD8VhSsLoFkGgJteBiCcfQ4f3yDjr0NuM4LhbjT6TCtMrd5h-jdQ" alt=""/><figcaption>Source: <a href="https://twitter.com/VitalikButerin/status/1466411377107558402">Vitalik Buterin on Twitter</a></figcaption></figure>



The Surge, the next in line in a post-Merge era, will reduce Ethereum network congestion and lower gas fees. The Surge will see the <a href="https://ethereum.org/en/upgrades/sharding/" target="_blank" rel="noreferrer noopener">introduction of sharding</a>&nbsp;— a scalability approach that splits the Ethereum network into smaller interconnected chains that offer higher throughput and low block times.&nbsp;



The Surge will also support the creation of rollups — layer-2 solutions that process transactions on their native chains before settling them on the more secure Ethereum network. While the move to proof-of-stake is an important milestone, it is not until developers implement The Surge sometime between <a href="https://ethereum.org/en/upgrades/sharding/" target="_blank" rel="noreferrer noopener">2023-2024</a> that Ethereum can theoretically offer lower gas fees and process more transactions per second.



<ol class="wp-block-list" start="2"><li>The Surge will eliminate the need for layer-2 solutions</li></ol>



The Surge will make layer-2 solutions more robust rather than eliminate them. Current layer-2 solutions, including rollups, are limited by the burden of handling large amounts of data. A sharded network shares the data handling load and allows rollups to scale up to 100,000 transactions per second.



A typical roll-up solution bundles several transactions executed on its native chain into one, which is submitted on the Ethereum mainnet. This “bundling” process reduces the amount of data required to process the transaction on Ethereum and frees up more blockspace.



Layer-2 solutions will see greater adoption as Ethereum moves from the monolithic blockchain model to a modular one. These solutions on different chains will offer cheap and fast transactions that derive their security from Ethereum’s main layer. However, the long-term roadmap indicates that rollups alone are not enough to scale throughput on Ethereum.&nbsp;



<ol class="wp-block-list" start="3"><li>Rollups are the only L2 solution needed to scale</li></ol>



Although rollups are an integral piece of the scaling solution puzzle, they are only ideal for transactions and applications that require limited computational power. They cannot simultaneously power several Web3 applications handling millions of transactions per minute.



In a theoretical scenario, rollups can only allow developers to bundle transactions that initially cost $1,000 in fees to as low as $200. Yet, even such significant cost savings amount to millions for a platform that plans to scale to the millions of users served by most Web2 apps.



The optimum approach to scaling the Web3 economy is a zero gas fee environment where users do not pay a fractional fee for every transaction. Achieving such scale using highly interoperable blockchains takes Web3 to the cusp of mainstream adoption.&nbsp;



<h3 class="wp-block-heading">SKALE’s modular approach to scaling&nbsp;</h3>



SKALE is pioneering a new modular approach to scaling Ethereum. Current L2 solutions, including rollups, utilize a monolithic system where developers must build applications on a single network, inheriting the same flaw of the native Ethereum network.



SKALE truly scales through interconnected blockchains called SKALE Chains, created and managed by independent dapp developers to suit their specific needs. Running a dedicated chain for different use cases and applications enables infinite scalability. It also allows for reliable interoperability between all SKALE Chains, reducing the friction associated with bridging assets between other networks.



Another of SKALE’s unique propositions is that it imports security from Ethereum using an elaborate consensus mechanism. SKALE validator nodes stake assets on the Ethereum mainnet, while interconnected SKALE Chains enjoy decentralization through a robust validator rotation mechanism.&nbsp;



<h3 class="wp-block-heading">How zero fees works with SKALE</h3>



What makes SKALE unique from all other scaling solutions is its <a href="https://skale.space/blog/how-does-skale-offer-zero-gas-fees" target="_blank" rel="noreferrer noopener">ability to deliver zero gas fees</a>. They adopted a model that is similar to how Web2 products subsidize hosting costs on behalf of users. Jack O’Holleran, co-founder of SKALE Labs, broke this down for us:



“SKALE, like all blockchains, has an integrated onchain payment method which pays validators to validate blocks and secure the network. Most blockchains make end users pay validators via transaction/gas fees which introduces friction and inhibits growth. SKALE, in contrast, enables the applications to pay validators directly in advance which subsidizes the gas fees for users.”



This subscription model allows the ecosystem to grow sustainably through attracting projects with viable business models and real world applications.



<h3 class="wp-block-heading">A Web3 with zero gas fees</h3>



A Web3 experience with zero gas fees has an infinite scale similar to current Web2 applications. For instance, a Web3 play-to-earn game charging fees per transaction cannot scale to the size of the popular gaming title PUBG, which has over a billion players. The same limitation applies to on-chain dexes that support limit order books and must handle hundreds of thousands of transactions per second to enable a frictionless experience.



Blockchain development teams are tapping SKALE Network to build dapps immune to the limitations of network fees. For instance, <a href="https://ruby.exchange/" target="_blank" rel="noreferrer noopener">Ruby Exchange</a> is a SKALE-based decentralized exchange that enables users to boost yield and reduce fees through holding NFTs. Another team plans to launch SKALE’s first NFT marketplace called <a href="https://nftrade.com/" target="_blank" rel="noreferrer noopener">NFTrade</a>. It will be hosted on the NFT community hub chain <a href="https://skale.space/blog/announcing-the-calypso-nft-hub" target="_blank" rel="noreferrer noopener">Calypso</a> and its estimated release date is sometime in Q4. Additionally, the development team behind <a href="https://exorde.network/" target="_blank" rel="noreferrer noopener">Exorde</a> created a Web3 protocol that empowers developers to crawl and link all public data on the web.&nbsp;



With a total of 20 SKALE chains and over 10 million transactions, users have saved <a href="https://skale.space/stats" target="_blank" rel="noreferrer noopener">32,351 ether</a> in gas fees to date. As of publication, that equates to $53,074,446 in savings. SKALE&#8217;s high performance and gasless experience continues to attract more Web3 gaming projects such as <a href="https://blockbrawlers.com/" target="_blank" rel="noreferrer noopener">Block Brawlers</a>, <a href="https://cryptocolosseum.com/" target="_blank" rel="noreferrer noopener">Crypto Colosseum</a> and <a href="https://www.cryptoblades.io/" target="_blank" rel="noreferrer noopener">CryptoBlades</a> into its ecosystem.&nbsp;



The future Web3 economy will require blockchain networks that offer frictionless experiences. In such an economy, users can freely roam applications without paying a fractional fee for each transaction.



Developers can deploy applications confident that the underlying network is robust enough to support infinite scalability. SKALE is built to deliver such a fluid network performance and will almost certainly gain further traction as the journey to scaling Ethereum enters its next phase.



This content is sponsored by <a href="https://skale.space" target="_blank" rel="noreferrer noopener">SKALE</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

The Future of Web3 Needs Zero Gas Fees

Ornella Hernandez

<div id="highlights-block_632306aae79b2" class="highlights">
 <ul>
 <li>NFT projects and owners can expect no impact on NFTs they own</li>
 <li>ESG component has been primary deterrent for environmentally-conscious brands building on Ethereum</li>
 </ul>
 
</div>



The Ethereum Merge <a href="https://cms.blockworks.co/ethereum-switches-to-proof-of-stake-after-7-years-of-work/">has taken place</a>. It’s goal: to migrate the blockchain from proof-of-work (PoW) over to a more environmentally friendly and theoretically more secure proof-of-stake (PoS).&nbsp;But what does it mean for NFT holders?



<a href="https://cms.blockworks.co/tag/ethereum-Merge/">The Merge</a> will not increase throughput of the network, and gas prices will likely not go down, but the upgrade may pave the way for lower gas fees via sharding down the line. And NFTs built on Ethereum will not be affected, experts said.



One implication to consider, however, is duplicate NFTs, according to Ankush Agarwal, chief architect of Co:Create.&nbsp;



“The ‘old NFTs’ will be [duplicated on any forked] PoW chain and could cause some confusion if projects are not updated. All major players — Coinbase, OpenSea, LooksRare — have made statements that they will only be supporting the PoS chain, so hopefully the impact will be minimal.”



<h3 class="wp-block-heading">Proof-of-stake Ethereum changes the NFT energy narrative</h3>



As a result of the Merge, the energy consumption on Ethereum <a href="https://blog.ethereum.org/2021/05/18/country-power-no-more" target="_blank" rel="noreferrer noopener">drops by 99.9%</a>, which may be impactful for NFTs, as it undercuts a primary narrative espoused by critics of the tokens.



“There’s been an incredible amount of misinformation about the energy consumption of NFTs, but this migration will put even the most vocal critic’s concern to rest,” said Jonathan Victor, head of Web3 and NFTs at Protocol Labs.



Some of those critics include Hollywood stars and game developers in San Francisco who are energy and environmentally conscious, according to Jack O&#8217;Holleran, CEO of SKALE labs.



SKALE&#8217;s multi-chain network collaborates with brands and artists to mint and manage NFTs on Ethereum.&nbsp;The first question major brands ask is if their technology is energy friendly, mainly because “they care about their optics,” he said.



Ethereum has been widely branded as an ecosystem that is not energy friendly, which has deterred many from building NFT projects on Ethereum and turning to other chains like Solana and Polygon. Nevertheless, Ethereum remains the largest and most popular blockchain for NFTs.



Since most industries are targeting net zero emissions by 2050, the Merge may get ETH substantially closer to this goal.



Victor added that this doesn’t solve every problem for ETH: “If folks want lower gas fees, they’ll still need to use L2s like Optimism or Arbitrum.”



In the meantime, NFT owners should remain cautious about hacks, scams and suspicious links that request to migrate any crypto or NFTs.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

NFT Ecosystem To Benefit From Ethereum Proof-of-stake

<div id="highlights-block_6283e36596814" class="highlights">
 <ul>
 <li>A Q&amp;A with Mark Cuban’s entertainment platform Fireside revealed Web3’s disruption of Hollywood</li>
 <li>Spotify and Instagram are experimenting with NFT display features</li>
 </ul>
 
</div>



Music streaming service Spotify has selected a small group of artists to embed and promote NFT galleries on their profiles, <a href="https://musically.com/2022/05/13/spotify-artists-promote-nfts/" target="_blank" rel="noreferrer noopener">according</a> to Music Ally. The NFTs (non-fungible tokens) will appear under the artists’ songs and albums.



Steve Aoki and The Wombats are among the first musicians taking part in the test, and both are big NFT collectors. The feature is currently available to select Android users in the US who can view and buy available NFTs from external marketplaces.



Because users cannot make direct purchases via Spotify, the company is not taking any cut of NFT sales. Spotify sent out a survey to gauge interest and excitement for any additional future NFT implementation on its platform.



Recently, Meta also rolled out a feature for select <a href="https://cms.blockworks.co/meta-trials-nft-display-feature-for-instagram-creators-and-collectors/" target="_blank" rel="noreferrer noopener">Instagram creators to display their NFTs</a> on their feed. 



<h3 class="wp-block-heading">The “Queen of Pop” drop</h3>



Madonna dropped a non-fungible token collaboration with NFT artist Beeple on SuperRare last week that garnered descriptors such as “bizarre” and “spicy” due to its graphic content. The three-part series of NFT videos titled “Mother of Creation” explores the concept of birth, creation and motherhood.



The videos feature a naked 3D avatar of Madonna giving birth to a tree, butterflies and centipedes in different backdrops. The message, <a href="https://motherofcreation.xyz/#charities" target="_blank" rel="noreferrer noopener">according</a> to the website, likens how children come into the world to how an artist brings creativity to life: “You never know where you are going to find life, and you can never give up hope.” 



Proceeds from the sale will benefit three nonprofit organizations that support mothers across the globe, including The Voices of Children Foundation, The City of Joy, and Black Mama’s Bail Out. The triptych was created with infrastructure support by Moonpay, which also reportedly contributed $100,000 to each charity.



So far, 309.1 ETH ($636,823) has been accrued in sales on SuperRare at the time of publication.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh6.googleusercontent.com/g8jGtmXF798IcPxAz9RIXCafyvRh3aW3AfwEODA9ATqdkOXCQ7bBjYt9WNu-XQb1uFBuX2pdj0dIpAGDnNbwZPYMuXDJswbuaxCEvsQvKzBNOQxvqd54fYiuKbAr-7Da4vpBD9p_ifc4LGubQQ" alt=""/></figure>



<h3 class="wp-block-heading">Fireside x SKALE Hollywood grant program</h3>



Mark Cuban’s entertainment platform Fireside and Ethereum-based blockchain network SKALE recently announced a $100 million Web3 creator fund. The “Creatives Unleashed” grant program aims to empower the next generation of Hollywood creatives to transition to Web3 and make content without the middlemen.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We&#39;re so excited to announce our industry first partnership with <a href="https://twitter.com/SkaleNetwork?ref_src=twsrc%5Etfw">@SkaleNetwork</a> , the $100M Creators Unleashed Grant Program, a game changer for media and entertainment creators to accelerate their transition to Web3! Learn more at<a href="https://t.co/ZoWomX3uxb">https://t.co/ZoWomX3uxb</a> <a href="https://t.co/QesP0VcPzI">pic.twitter.com/QesP0VcPzI</a>&mdash; Fireside (@FiresideChatApp) <a href="https://twitter.com/FiresideChatApp/status/1524531915251879936?ref_src=twsrc%5Etfw">May 11, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Blockworks spoke to Fireside and SKALE to learn more about the partnership.&nbsp;



BW: What kinds of creatives is the program looking for?



Fireside: Fireside is home to over 2,000 different types of creators, including podcasters,vodcasters, authors, comedians, actors, television hosts, filmmakers, musicians and more. This program is for any Fireside Creator who is looking to “Web3-ify” their business with better community engagement tools and unlock crypto-enabled business models. This is the solution for any professional creator who has an established audience and wants to accelerate the transition of their media and entertainment businesses to Web3 via Fireside in a simple way without a big upfront investment.



BW: What problems in Hollywood is Fireside trying to tackle? Why use blockchain technology to do so?



Fireside: We are already seeing signals that the next big content hits will be created between creators and their audiences and brands directly. This is where Web3 comes in by removing traditional middlemen and unlocking entirely new business models where communities and brands can now participate as part of the intellectual property creation and distribution, and help shape the media empires of the future.



Fireside is the next evolution of media and entertainment which is participatory, creator-led, and decentralized in a way that brings creators and their audiences closer than ever before.&nbsp;



BW: What is SKALE&#8217;s long-term vision? Why partner with a content studio like Fireside?



SKALE: Our purpose is to bring the power of blockchains to 1 billion people globally in a way that&#8217;s optimized to give everyday consumers a great user experience. We do this by creating a scalable network of hundreds to tens of thousands of interconnected SKALE chains that work to power decentralized Web3 applications, much like Amazon Web Services does for mobile apps today.



The reason we&#8217;re so excited to work with Fireside is because they&#8217;re really creating a new paradigm for how content is being funded, created and distributed, all using the power of decentralized blockchains. Content has always been king, and we love being able to offer a solution that lets creators do it faster, more affordably and in a way that disintermediates the middleman, so they can create more content for people to consume.



Interview responses were edited for brevity and clarity.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Web3 Watch: Spotify Trials NFTs and Madonna’s First NFT Collection

Jacquelyn Melinek

<div id="highlights-block_620fa964ea3d9" class="highlights">
 <ul>
 <li>On Friday, Ethereum-focused multichain network SKALE set up a $100 million grant program to fund the future of blockchain-based gaming</li>
 <li>Large funds announced this week include a $205 million ecosystem fund for The Graph and Sequoia Capital’s new crypto sub-fund for up to $600 million</li>
 </ul>
 
</div>



This week was busy, yet again, for the crypto funding space as a number of multi-million-dollar investments and mega funds were shared with the public.



On Friday, Ethereum-focused multichain network SKALE set up a <a href="https://cms.blockworks.co/ethereum-multi-chain-network-earmarks-100m-to-fuel-blockchain-gaming/" target="_blank" rel="noreferrer noopener">$100 million grant program</a> to fund the future of blockchain-based gaming. This launch is the latest step for the blockchain gaming space, which has grown exponentially over the past 12 months and is drawing attention from big investors and funds.



Meanwhile, Binance Labs, the venture capital arm of Binance, completed a strategic investment in a multichain liquidity protocol, Symbiosis Finance.



The funding will be used to support the company through its Mainnet launch and add support for more Ethereum virtual machine (EVM) and non-EVM networks, as well as integration with different wallets, services and dApps.



“The idea is simple; we strive to learn from the market leaders, adopt their best practices and this is the way we can create something in demand,” Nick Avramov, co-founder and chief marketing officer at Symbiosis Finance, said in a <a href="https://www.binance.com/en/blog/ecosystem/binance-labs-makes-strategic-investment-in-symbiosis-finance-421499824684903475" target="_blank" rel="noreferrer noopener">post</a>.



Significant new funds entered the space, including a <a href="https://cms.blockworks.co/investors-bolster-the-graph-with-205m-ecosystem-fund/" target="_blank" rel="noreferrer noopener">$205 million ecosystem fund</a> by six investors to help invest in projects building on The Graph protocol, an indexing layer for Web3 and blockchain data.



Sequoia Capital is also launching a new <a href="https://cms.blockworks.co/sequoia-capital-is-raising-up-to-600m-in-new-sub-fund-to-focus-on-tokens/" target="_blank" rel="noreferrer noopener">$500 million to $600 million</a> sub-fund, focusing primarily on liquid tokens and digital assets, a spokesperson confirmed with Blockworks on Thursday.



On a smaller scale, an alternative investment platform, Yieldstreet, announced its <a href="https://www.yieldstreet.com/offering/EaLf3g/pantera-early-stage-token-fund-i/" target="_blank" rel="noreferrer noopener">first crypto fund</a> through a partnership with Pantera Capital. The firm expects to raise about $20 million for the fund with minimum investments of $25,000, a spokesperson told Blockworks.



From Protocol Labs, the open-source decentralized storage network Filecoin and IPFS launched a $38 million fund focused on improving the internet and renewable energy throughout the US with Nelnet Renewable Energy Services.



The strategic investment will finance solar energy projects and aims to contribute more energy to the grid than is consumed by Filecoin’s network. Thus, enabling the “responsible growth” of Filecoin without taking from the domestic power grid, it said.&nbsp;



“Protocol Labs is committed to driving the next generation of the internet, Web3, toward net-zero emissions,” Head of Filecoin Green at Protocol Labs Alan Ransil said in a statement. “By investing in solar development with Nelnet, we are both building new generation capacity in this vital public infrastructure system and helping to push the renewable energy transition forward.”



Other notable capital raises this week include:&nbsp;



<ul class="wp-block-list"><li>Animoca Brands and Brinc partnered to launch a <a href="https://cms.blockworks.co/animoca-brands-and-brinc-to-invest-up-to-30m-in-play-to-earn-ecosystem/" target="_blank" rel="noreferrer noopener">$30 million</a> guild accelerator program to grow the play-to-earn ecosystem</li><li>Crypto wallet Rainbow’s <a href="https://techcrunch.com/2022/02/15/web3-mobile-wallet-startup-rainbow-raises-18m-series-a-from-alexis-ohanians-fund/" target="_blank" rel="noreferrer noopener">$18 million Series A</a> led by Alexis Ohanian’s venture firm, Seven Seven Six</li><li>Fluence Labs <a href="https://twitter.com/fluence_project/status/1494423913471766533?s=20&amp;t=50dLcJ5qL4491Mjga3FhuA" target="_blank" rel="noreferrer noopener">$9 million</a> round led by MultiCoin Capital</li><li>DeFi lending protocol Minterest’s <a href="https://www.prnewswire.com/news-releases/defi-lending-protocol-minterest-closes-successful-5-52m-sale-of-mnt-token-301481699.html" target="_blank" rel="noreferrer noopener">$5.52 million</a> token sale</li><li>An open marketplace for Solana NFTs, Hyperspace’s $4.5 million seed round led by Dragonfly Capital and Pantera Capital</li><li>Solana-powered metaverse game MixMob’s <a href="https://smartliquidity.info/2022/02/18/mixmob-raises-7-million-in-latest-seed-funding-round/" target="_blank" rel="noreferrer noopener">$7 million</a> raise</li></ul>



Check back next week for more funding news.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Funding Roundup: Capital and Funds Continue To Launch Into Crypto

<div id="highlights-block_620fcebd50d0c" class="highlights">
 <ul>
 <li>The ecosystem program will launch in tandem with SKALE V2, or SKALEverse</li>
 <li>The network aims to onboard billions of users and has a focus on NFTs, DeFi and Web3</li>
 </ul>
 
</div>



Ethereum-focused multi-chain network SKALE set up a $100 million grant program to fund the future of blockchain-based gaming.



The company announced the initiative at the ETHDenver conference on Friday. The capital will be used to increase and onboard applications and projects to the SKALE network.&nbsp;



<div class="wp-block-image"><figure class="alignright size-full"><img loading="lazy" decoding="async" width="300" height="300" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/d4a71f7d-acce-42da-857f-c0b981b45e7c_Jack_OHolleran_SKALE_Co-Founder_CEO.jpeg" alt="" class="wp-image-17630" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/d4a71f7d-acce-42da-857f-c0b981b45e7c_Jack_OHolleran_SKALE_Co-Founder_CEO.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/d4a71f7d-acce-42da-857f-c0b981b45e7c_Jack_OHolleran_SKALE_Co-Founder_CEO.jpeg?w=150 150w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/d4a71f7d-acce-42da-857f-c0b981b45e7c_Jack_OHolleran_SKALE_Co-Founder_CEO.jpeg?w=257 257w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/d4a71f7d-acce-42da-857f-c0b981b45e7c_Jack_OHolleran_SKALE_Co-Founder_CEO.jpeg?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/d4a71f7d-acce-42da-857f-c0b981b45e7c_Jack_OHolleran_SKALE_Co-Founder_CEO.jpeg?w=219 219w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/d4a71f7d-acce-42da-857f-c0b981b45e7c_Jack_OHolleran_SKALE_Co-Founder_CEO.jpeg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/d4a71f7d-acce-42da-857f-c0b981b45e7c_Jack_OHolleran_SKALE_Co-Founder_CEO.jpeg?w=50 50w" sizes="auto, (max-width: 300px) 100vw, 300px" /><figcaption> SKALE Co-founder Jack O’Holleran</figcaption></figure></div>



The Network of Decentralized Economics (NODE) will kick-start the program with $5 million to creators focused on blockchain gaming, play-to-earn gaming and the metaverse.



The launch is timed in tandem with the network’s next iteration, dubbed, <a href="https://skale.network/blog/into-the-skaleverse-introducing-skale-v2" target="_blank" rel="noreferrer noopener">SKALE V2</a>, or SKALEverse, which aims to optimize features like chain-to-chain transfers, creating ecosystem hubs, NFT marketplaces and faster game modes.



Like most blockchains, the network aims to onboard billions of users and has a focus on NFTs (non-fungible tokens), DeFi and Web3.



Its network helps blockchain games build experiences for users, including zero fees or gasless transactions, plus supporting interconnected and interactive blockchains, SKALE Co-founder Jack O’Holleran said in a statement.



This launch is the latest step for the blockchain gaming space writ large, which has expanded over the past 12 months and is drawing increasing attention from big-time investors and funds.



Earlier this month, Gamestop and Immutable launched a <a href="https://cms.blockworks.co/gamestop-immutable-to-launch-100-joint-fund-for-gaming-nfts/" target="_blank" rel="noreferrer noopener">$100 million</a> joint fund for gaming NFTs. In November, Forte added <a href="https://cms.blockworks.co/?s=gaming#:~:text=Forte%20Adds%20%24725%20Million%20in%20Funding%20to%20Push%20Blockchain%20Gaming%20Forward" target="_blank" rel="noreferrer noopener">$725 million</a> in funding earmarked for blockchain games in one of the largest funding rounds of the year.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.