How can Ethereum sidechain projects transform to succeed? This case is worth referencing for developers

Author: Vanguard 0

Recently, the Ethereum Cancun upgrade has gradually become the most mainstream narrative in the industry, leaving many established Ethereum sidechains and L1 projects feeling somewhat neglected. However, the latter still has a more solid foundation in terms of underlying technology and R&D investment, and their solutions are more recognized among developers.

Amidst the bustling market trends, the established Ethereum sidechain project SKALE Network has also been rediscovered by more visionary investors due to its excellent performance, leading to a certain degree of increase in its price and market capitalization data.

Recent asset price trends of SKL

Market data shows that the trading price of SKALE Network's token SKL is currently $0.09119, demonstrating significant market momentum, with a 24-hour increase of 39.97%. Over the past 7 days, SKL's increase has exceeded 70%. Additionally, SKL's fully diluted value (FDV) has reached nearly $430 million, showing strong performance. Most importantly, SKL's trading volume in the last 24 hours has reached $184 million, indicating that its liquidity and trading activity are both robust.

In the following text, we will provide readers with a comprehensive introduction to the technical advantages and ecological development status of SKALE Network, aiming to bring the most valuable information reference to users, which does not constitute investment advice.

As an Ethereum sidechain project, SKALE's modular attributes reduce costs and increase efficiency for developers and users

SKALE Network is an Ethereum sidechain project that aims to create a smart contract service platform to help Ethereum DApps acquire more users at lower costs and with better performance. SKALE Network is a modular blockchain network closely integrated with Ethereum, and its core advantage lies in providing developers with an efficient blockchain deployment environment without incurring high Gas fees. This feature allows developers to deploy high-performance Ethereum Virtual Machine (EVM) compatible blockchains in minutes without sacrificing the network's security and decentralization.

Game projects deployed on the SKALE chain rank among the top in the industry

For a wide range of users and developers, some technical features of SKALE are particularly noteworthy:

1. Gas fees close to zero, lower costs:

The uniqueness of SKALE Network lies in its extremely low Gas fees. Regardless of the scale of the network, as long as it is below a certain threshold, Gas fees are almost zero. This sharply contrasts with the high Gas fees of the current Ethereum mainnet, benefiting not only developers but also aiding market expansion.

2. Random node selection and POS consensus mechanism, combining decentralization and high performance:

SKALE employs a POS-based consensus mechanism and enhances the decentralization of the network through random node selection and node rotation schemes. This means that validating nodes are not fixed but rotate based on certain time patterns and randomness, ensuring high TPS while improving decentralization.

3. Virtual sub-nodes and containerized validating nodes:

In SKALE Network, each elastic sidechain consists of a group of randomly designated virtual sub-nodes that run the SKALE daemon and SKALE consensus mechanism. This virtualization of sub-nodes allows nodes in the SKALE network to serve multiple sidechains simultaneously rather than being limited to a single sidechain. This functionality is achieved by deploying a containerized sub-node architecture on each node in the network.

4. BLS Rollups enhance transaction security and performance:

Each sidechain of SKALE Network supports BLS Rollups, an effective way to increase network throughput and reduce Gas fees on the Ethereum mainnet. BLS Rollups compress the size of Ethereum transactions using a cryptographic algorithm known as aggregated BLS signatures, providing a more efficient and secure way to utilize the SKALE network.

In terms of ecological construction and financing, SKALE Network has also made significant progress. The network has successfully launched a batch of dApps and established partnerships with multiple partners and validators, receiving support from top Validators platforms globally. In terms of financing, SKALE Labs has successfully raised over $17.1 million, reflecting market recognition of its technology and future development potential. These achievements not only mark SKALE Network's technological innovation in the blockchain field but also indicate its important position in the entire crypto-economic ecosystem.

The distribution logic and incentive system of SKL assets determine its long-term value trajectory

The native digital currency of SKALE Network, the SKL token, is the core of the entire SKALE ecosystem's operation. As an ERC-20 token, SKL plays a crucial role in ensuring network operational efficiency and economic incentives among participants.

The use cases of the SKL token are as follows:

1. Staking and rewards: Validators stake SKL tokens to ensure the security and performance of the network and receive token rewards for their services.
2. Gas fees: Executing smart contracts requires paying SKL tokens as Gas fees to incentivize validators' work.
3. Governance participation: SKL token holders participate in network decision-making through voting, influencing the network's development direction.

SKALE Network raised funds through a two-phase sale. The first phase of private sales attracted qualified investors and institutional buyers, priced at $0.10 per token, raising $17.1 million. The second phase of public sales took place in October 2020, raising an additional $5 million.

The token economic system of SKALE is designed with a total supply cap of 4 billion tokens, of which approximately 2 billion are in circulation. These tokens are distributed through multiple rounds of private and public sales, with most allocated to support network development and ecosystem construction. The specific SKL token distribution model is as follows:

Among the 2 billion circulating tokens, 20% is allocated to the SKALE team and advisors, while the remaining 80% is used to support network operations and community development. Of this, 10% goes to the SKALE Foundation, 5% for ecosystem construction, 25% allocated to validators, 40% for community and marketing, and the remaining 10% reserved for future partners and ecosystem development.

SKL's token distribution model

Additionally, the token distribution includes strict lock-up periods and unlocking plans to ensure the interests of long-term participants align with the network's sustainable development. Tokens from the SAFT rounds will be locked for 9 to 36 months, while team tokens will be locked for one year after the network launch, followed by a 3-4 year unlocking period. Through this phased token management strategy, SKALE maintains the stability and health of its token economy.

Finally, the inflation mechanism of the tokens sets a decreasing reward plan for validators, aiming to reward validators at a rate of 9.3% in the first year, gradually reducing the reward rate over the next six years. This design aims to balance long-term incentives with the stability of token value, supporting the continuous development of the SKALE network. Through these strategies, SKALE Network has established the cornerstone of its token economy and laid a solid foundation for the future growth of its ecosystem.

Low barrier attributes lead to a surge of users into the SKALE ecosystem, with a $100 million ecological incentive plan launched

CoinGecko's latest report highlights that as of November 2023, SKALE stands at the forefront as the most active web3 gaming chain. The number of daily active addresses has reached 230,000, and SKALE's zero Gas fee blockchain model significantly lowers the entry barrier for gamers, contributing to its activity.

SKALE's ranking among various gaming public chains

Despite leading in the GameFi sector, a noteworthy finding in the report is that only 42% of SKALE's total transaction volume comes from gaming. This highlights the diversity of dApps and user groups on the SKALE platform, covering areas from gaming to artificial intelligence (AI), decentralized finance (DeFi), social networks, and decentralized personal identity (DePIN).

In 2022, SKALE Network announced the implementation of a $100 million ecosystem incentive plan aimed at promoting developer activity on its platform. This plan is not operated by a single entity but is a collaborative effort among various groups, including NODE Anstalt, SKALE DAO, and other non-profit organizations. The first $5 million grant from SKALE will be invested in projects in the P2E gaming and metaverse sectors.

The growth momentum of the SKALE ecosystem remains strong, with the number of active users on the network exceeding 2.3 million in November, a 130% increase from October. Coupled with over 30 million transactions, SKALE ranks among the top 5 blockchains in terms of active user weeks (UAW) and transaction volume.

Notably, SKALE's technical features are naturally suited for AI projects to deploy within it, and this year, AI projects have been a major trend. Therefore, the recent rise in SKL's asset price is likely related to the influx of numerous AI projects. Currently, a thriving and vibrant SKALE chain ecosystem is occupying a key position in Web3.

From Exorde to Cryptopia, the AI and Web3 gaming ecosystem on the SKALE chain is gradually taking shape

SKALE's unique blockchain architecture is particularly well-suited to overcome the typical barriers faced by AI applications in blockchain ecosystems, such as high Gas fees, network congestion, and non-instant finality. The advantages of zero-cost transactions and instant settlements are beginning to attract dApps to join SKALE for AI-driven blockchain operations, ensuring AI operates with the expected efficiency.

Here are some AI applications leveraging SKALE:

1. Exorde: Utilizing the machine learning capabilities of the SKALE platform, Exorde can efficiently and economically process a vast amount of global public content and execute numerous on-chain URL requests.
2. Overlai: Recently announced to be built on SKALE, using AI to protect creators' content from plagiarism and prevent unwanted AI content scraping. Follow Overlai on Instagram for updates.
3. Chirper: As the world's first AI-only social network, Chirper.ai utilizes SKALE to seamlessly deliver AI-generated content, simulating a social media environment.

In addition to AI, SKALE continues to attract blockchain games and DeFi platforms that wish to provide the best zero Gas fee user experience. Here are some projects that have launched or announced they are building on SKALE:

1. DexGo: An augmented reality move-to-earn game, now live on SKALE, where users can earn rewards through a healthy lifestyle with zero Gas fees.
2. Katana Inu: A multiplayer PC game focused on fast-paced, seamless gaming experiences, offering exciting spell and sword combat mechanics. Currently being built on SKALE, players will experience the thrill of gameplay with zero Gas fees and lightning-fast transactions!
3. Savvio: Savvio's mission is to make DeFi more accessible to everyone. They are setting a new standard for DeFi by building dApps on SKALE, introducing gamified features and zero Gas fees.
4. Pixudi: Reimagining the board game experience through the power of blockchain, now live on SKALE, providing players with an immersive gaming experience.
5. Dirac.Finance: The DeFi protocol DiracFinance requires a blockchain with instant finality, fast transactions, and strong security, which is why the platform is building its institutional-grade DeFi products on SKALE.
6. Cryptopia: A strategy RPG game fully built on the blockchain, bringing its game to SKALE for players to enjoy a seamless gaming experience with zero Gas fees.

Empowering developers and benefiting new users, the flourishing ecosystem on the SKALE chain will help Web3 take root

Looking ahead, the competition in the Web3 world will undoubtedly be a multidimensional contest of various factors, but the speed of acquiring and the activity level of sinking users directly determine the lifecycle of a project. After fully shifting towards a low-barrier, high-performance direction, the flourishing state of SKALE's on-chain ecosystem directly indicates that market expectations are continuously rising. With the arrival of a new round of crypto asset bull markets, SKALE may bring more incremental value and innovative attempts to the entire industry, making it worthy of attention in the future.