Introduction

Each network is plagued by the blockchain trilemma of scalability, security, and decentralization, and how it can be solved is crucial to the success of any Web3 project. While projects have picked certain roles to solve this issue, Shardeum has developed a duo consensus system that provides decentralization, security, and increased throughput.

What is Shardeum?

Shardeum is an EVM-based layer that utilizes dynamic state sharding to overcome the blockchain trilemma of scalability, security, and decentralization. The platform boasts a scalable system that provides low gas fees while remaining decentralized and secure. This is possible through their unique consensus mechanism, which combines the power of Proof of Stake (PoS) and Proof of Quorum (PoQ).

Through Shardeum, developers can build and deploy Ethereum-compatible smart contracts, allowing smooth transitions to the Ethereum network without adjusting or reworking the code. Its hybrid consensus mechanism allows for speedy and seamless transaction validation by requiring a majority of validators to approve a transaction before execution.

Its unique approach also allows the platform to constantly increase its transaction per second (TPS) capacity by adding new validators, leading to the platform’s consistently low gas fees. Lastly, the platform has its native token called SHARD (SHM), which is used for staking to run the validator node and other functions within the ecosystem.

History of Shardeum

Shardeum was founded in 2007 by Omar Sid and Nistal Shetty, a former NASA expert and WazirX founder. The duo has been a major force in the Web3 movement in India and has built an organic community with members who have embraced the ecosystem.

How Does Shardeum Work?

Shardeum has developed unique solutions to the trilemma issue that plagues the Web3 industry. Some of these include using validators and the Proof of Quorum Consensus Mechanism. Also, as the name implies, Shardeum uses Sharding, a technology that breaks down blockchains into smaller, easily manageable pieces called shards.

This essentially splits the large database system of blockchains into smaller tables, like breaking down information into smaller and manageable pieces. This allows sharded blockchains to process information faster than non-sharded blockchains since they can filter through the smaller pieces faster than through bulky databases.

The project takes the sharding concept a step further with Dynamic State Sharding. As the name implies, dynamic state sharding is flexible and easily adapts to changes in the blockchain ecosystem. It breaks down the network into independent shards that all process transactions at the same time.

With Dynamic State Sharding, transactions that affect multiple shards can be processed simultaneously instead of sequentially, cutting down the time needed for processing transactions and increasing transaction throughput. Furthermore, the addition of dynamic state sharding allows for easy network upgrades without stopping the ecosystem’s functions.

In addition to Dynamic Sharding, the platform uses a dual consensus mechanism consisting of Proof of Stake (PoS) and Proof of Quorum (PoQ). The PoS consensus is essential to the platform’s validation process, ensuring dishonest nodes are not validated. It also decides how these transactions are validated and who earns the rewards for validating correctly.

Meanwhile, the Proof-of-Quorum consensus takes a specialized approach to validation. Transactions are validated using a timestamp-based ordering protocol. With the PoQ consensus, rather than spreading the details of the transaction to the entire blockchain, the transaction is only made available to the nodes within their specific consensus group or shard.

The specific validator nodes in the shard can only store the latest state of the accounts they are in charge of, not the entire network’s data. This greatly boosts transaction speeds and conserves resources since the data is limited to its assigned shard and not the entire network. Additionally, every node in the group is informed about the specific translation, crafting a trustless collection of electronic votes in the form of receipts.

Once fifty percent of the nodes have voted, the transaction is confirmed on the network without any delay, speeding up transaction execution. Once executed, individual transactions are grouped and sent to the archive nodes on the network.

When the platform experiences periods of high traffic, it is equipped with a Standby node. These nodes help handle excess transactions and replace the oldest active validators at the end of each cycle.

Features of Shardeum

Shardeum’s key mechanism is its application of sharding technology, which breaks down blockchains into smaller pieces called shards. However, it includes other features that ensure the success of the platform. Some of these features include:

Atomicity

Shardeum is equipped with atomic processing, which processes transactions atomically. This means that all parts of the transaction must be completed successfully, or none will be. In simpler terms, it means that transactions must be completely executed or not executed at all. This is crucial to the transaction’s success and ensuring data consistency to prevent security risks and distrust.

Cross-Shard Composability

Shardeum’s cross-shard composability grants transactions access to and utilization of data and states from different shards. This enables the execution of complex transactions and smart contracts in sharded environments, simplifying the coding process for smart contract developers.

Autoscaling

Autoscaling is the ability of a network to adjust to the demands of the network without compromising security or performance. This is possible by measuring the network’s load every cycle (usually a minute) and deciding, based on the load, the number of validator nodes needed to process the load. The whole process is performed automatically, without the need for intermediaries.

Linear Scaling

Linear scalability is an application’s ability to add more machines, servers, or nodes to the network whenever the workload increases. Shardeum can add more nodes whenever the platform’s demands rise. These nodes are sent to the network’s standby validator pool, increasing the transaction per second proportionally, making Shardeum the first linear scaling network.

Low Gas Fees

Thanks to sharding, the network is able to divide its transaction state evenly and dynamically execute workload, storage, and bandwidth among different nodes. This system of processes

sing transactions results in low overheads for validators as they only need to store the state data of transactions within their group.

The Shardeum Ecosystem

The Shardeum ecosystem has 155 projects, including NFTs, bridges, file storage, infrastructure, live, socials, tools, De-Fi protocols, and games. Some of these projects include:

Swapped Finance

Source: official website

Swapped Finance is a leading decentralized exchange built on the Shardeum network. It allows users to swap tokens without creating an account, all at a minimum fee of 0.3%. The platform also has a liquidity pool that allows users to earn money by buying and selling tokens. By leveraging Shardeum’s features, Swapped Finance provides a scalable, safe, and efficient platform for users to trade and stake their favorite tokens.

PointSix

PointSix is a market for low-fee trading NFTs, offering unique benefits to users in the form of airdrops and commissions on friend referrals as high as fifty percent. Users are provided three membership tiers (VIP, VVIP, and Elite). These tiers offer users varying benefits, such as trading fee discounts, instant creator royalties, and incentives for referring other users.

Xade Finance

Source: Official website

Xade applies a hybrid approach, combining decentralized finance and traditional finance, to provide everyday banking services to the Web3ecosystem. It is a De-Fi-powered option to traditional banks, offering seamless services to users and newcomers in the De-Fi space.

Shardible

Shardible is an NFT marketplace designed to simplify Web3 trading for beginners. It simplifies the trading, bidding, and listing process for NFTs and provides NFTs-as-a-service, making it easy for developers tools to build their NFT projects of choice. The platform also has an NFT launchpad for users to create and promote their NFT market.

Solus Finance

Source: Official website

Solus Finance is a Web3 trading platform that simplifies Web3 trading for new users. It consists of two main products, Spots and Derivative trading, which allow users to speculate on assets, whether they have to sell or buy them, and whether the price will go up or down. Additionally, Solus has a gamified approach to trading, where traders compete with other traders to earn badges for wise investments.

$SHM Token

The SHM token is the base token of Shardeum. It is used to run the validator nodes and engage in De-Fi transactions and other transactions on the network. $SHM serves as the governance token of the platform, earning stakers of the token governing rights and allowing them to vote on issues regarding the network.

Another major function of SHM tokens is gas tokens, which are used to execute transactions and other transactions requiring the network’s smart contracts. SHM is also used for rewards through airdrops, ecosystem rewards, and network participation.

$SHM Tokenomics

Source: Official website

The SHM token has a fixed market supply of 508 million SHM. However, the maximum supply of 508 million will never be reached since transaction fees are regularly burned. The SHM token will be distributed in the following manner:

• 51% will be issued to the Community as rewards to the validator and archiver nodes (259,080,000 SHM)
• 18% will belong to sales: 3-month cliff, then 2-year daily linear vesting (91,440,000 SHM)
• 15% will be issued to the Team: 3-month cliff, then 2-year daily linear vesting (76,200,000 SHM)
• 11% belongs to the Foundation: unlocked at the Token Generation Event (TGE) (55,880,000 SHM)
• 5% to the Ecosystem: unlocked at TGE (25,400,000 SHM)

Since transaction fees are burned, the maximum SHM supply of 508 million will never be reached.

Conclusion

Shardeum has quickly become one of the most talked-about networks in the ecosystem, providing L1-based solutions to the blockchain trilemma. Its unique consensus Differentiates it from other competitors, placing it one step ahead in the race for total decentralization in the De-Fi space.