What is SKALE Network and how does it work?

TL;DR: SKALE Network is an L2 scaling solution for Ethereum, primarily aimed for scaling smart contracts. SKALE enables the creation of app-specific sidechains, which are secured by SKALE’s own validator set.

SKALE’s V1 mainnet launched 1st of July 2020.

Why SKALE? SKALE helps dApp developers speed up smart contract development and increase performance. SKALE is EVM-compatible and allows builders to make use of Ethereum’s existing developer tools.

How does SKALE work? The goal of SKALE is to enable dApps to access independent app-specific chains secured by SKALE’s validator set. In other words, app-specific sidechains purchase security from SKALE’s validator set.

What is SKALE’s business model? SKALE can be thought of as Ethereum-as-a-service. A dApp pays a subscription fee based on the resources it needs (computation, storage, bandwidth) from SKALE’s validator set.

How does SKALE connect to Ethereum? App-specific chains connect to Ethereum via the SKALE Manager smart contract that serves as the point of entry and exit. dApps deposit their tokens to the SKALE Manager smart contract, which mints corresponding tokens on the app-specific chain.

How are app-specific chains secured? Chains derive their security from the SKALE Manager contract, which is secured by a pool of randomly appointed and frequently rotated validators. Among the early signed up validators are ChorusOne, StakedUS, BisonTrails etc.

What is the role of the $SKL token? Validators stake $SKL in the SKALE Manager smart contract to earn fees and inflation rewards. Holders of $SKL can delegate their tokens to any validator in the SKALE network.

How can dApps start using SKALE? A dApp developer who wants to use SKALE has to:

1. Decide how much additional capacity they need;
2. Select the duration for the additional capacity; and
3. Pay the subscription fee to the SKALE Manager contract’s validators.

Who controls the protocol? The SKALE network is currently governed by the non-profit N.O.D.E. Foundation. The goal is to transfer the ownership and control of the network to $SKL tokenholders over time.

Roadmap: A restricted mainnet (secured by validators who have run the testnet and gone through an onboarding process) was launched on 1st of July 2020. Staking and delegation will be live in Q3’20.

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