The Ethereum scaling landscape is a new and exciting field. There are no dull days and no shortage of Layer-2 scaling solutions to choose from — each with their own unique trade-offs and optimizations.
But it’s easy to get lost in the flurry of changes, easy to identify a state channel as an optimistic rollup, or call a Childchain a Sidechain. With this article, we aim to address the latter, not only to help you navigate this complex world, but to clear the air a little.
All Layer-2 solutions want to scale Ethereum, and OMG Network’s More Viable Plasma is no different. But the easiest way to distinguish our Plasma Childchain from a Sidechain is the security aspect.
OMG Network’s Plasma Childchain is anchored to Ethereum and its security is based on Ethereum smart contracts and a decentralized . The OMG Network is a non-p2p, network that is controlled by a block producer node known as the Operator. Lastly, the Plasma architecture employs a single-tiered Plasma construction, meaning that the Childchain doesn’t serve as a parent of any chain.
A Sidechain is attached to Ethereum using a peg that enables one- or two-way transfer of assets. You can create multiple Sidechains to allow different cryptocurrencies to interact with each other. Each Sidechain is self-contained (bugs from one chain don’t affect the other) and relies on its own security mechanisms.
The difference in architecture means that both Layer-2 scaling solutions come with different trade-offs.
The Plasma Childchain uses a for value transfer. It is a non-custodial Layer-2 scaling solution which means you are in control of your private keys and funds at all times. Non-custodiality allows honest users to withdraw funds from the Plasma Childchain to Ethereum at any time, even if the OMG Network Operator goes offline. We call this feature trustlessness because users don’t have to trust the Plasma Childchain Operator with their funds.
Trustlessness doesn’t affect transaction throughput, but building Plasma for protection adds extra restrictions to its functionality. Here’s an excerpt from Plasma Group explaining the limitations of a Plasma Childchain:
“Take, for example, a 1-year timelock contract. You could put that contract on a Sidechain if you trust that the Sidechain will be around in a year. But since a Plasma Childchain is trustless, we need to think a little bit outside the box. We need to ensure that if the consensus mechanism fails, we have a way to move the entire timelock contract back onto Ethereum. Luckily that’s not so difficult, but it’s more complex than it would be on the Sidechain.
Things get really complex when it’s not so clear how the thing on the Plasma Childchain is moved back to Ethereum. A timelock contract that’s just holding your money makes sense because it seems obvious that you should be able to move the contract. But what if we’re talking about a timelock contract that’s holding money for 100 people at once? Now it’s not so clear anymore.”
Conclusion: Plasma prioritizes a user’s fund security and recoverability over general flexibility.
The ability to create different Sidechains with their own tokens and consensus mechanism allows for experimentation. For example, a Sidechain could be created with a much bigger block size, allowing more transactions per time frame. What’s more, since Sidechains are self-contained, features can be moved onto the mainchain only when proven to work in practice.
Sidechains, however, are independent from the Ethereum chain and rely on their own security mechanisms for fund safety. The user has to trust the consensus mechanism like PoW or PoA to mine and validate transactions. In other words, if the Sidechain fails (meaning the consensus mechanism gets compromised), you could lose all of your funds. As Plasma Group describes it, “it’s all about the amount of risk you’re willing to take. You might feel comfortable putting 1 ETH on a Sidechain but not 100 ETH.”
Conclusion: Sidechains prioritize general flexibility over a user’s fund security and recoverability.
Much of the criticism surrounding Plasma is that it does not support smart contracts, thus reducing its functionality. However, the main objective of the Plasma chain is to reduce Ethereum congestion, which is why it’s optimized for payment settlements and transactions. Because of the Plasma Childchain’s higher throughput and security, it allows for faster transactions at 1/3rd the cost of Ethereum while maintaining the same level of security as the root chain.
The Plasma Childchain does this by processing numerous blocks full of batches transactions at a time. It is able to do this because of fewer block producer nodes (one Operator for OMG Network) that need to be in consensus. The hashes for all the transactions in a block are stored in a Merkel tree. The Merkel tree root hash (for the block) is submitted to the root chain. The OMG Network decentralizes security by relying on Ethereum and a Watcher network. This prevents malicious behavior from the Operator or third-parties because if the Watchers detect an abnormality, they notify users to withdraw their funds from Plasma. Trustlessness allows user funds to be exited back to the root chain even if the Network goes rogue or offline. This ensures safety for the user when transacting on the OMG Network.
Sidechains are built for flexibility and are optimized to allow cryptocurrencies to interact with one another. They also support smart contracts, helping developers experiment with a wider variety of use-cases before pushing them to the main chain. However, the security guarantees of a Sidechain may hinder users from using it as a value transfer network.
|Relies on Ethereum’s security mechanisms (smart contracts) and a decentralized network of watchers||Relies on its own consensus mechanism|
|Trustless: Users can withdraw their funds to Ethereum even if the Plasma Childchain goes offline||Not Trustless: If Sidechain’s security mechanism fails, users could lose their funds.|
|Optimized for payments and settlements due to high throughput and security guarantees||Optimized for flexibility and a wide variety of use cases since each Sidechain can support smart contracts|
At OMG Network, we’d like to make our scaling solution as resilient as possible to the things that make centralization undesirable: the Network going offline, collusions between bad actors, centralized actors misbehaving, etc. We’re willing to make trade-offs and incorporate some centralization in our scaling solution as long as centralized actors (like the Operator) cannot misbehave — which is why we’ve designed for trustlessness. That said, all scaling solutions are about trade-offs, and it’s down to the end-users to pick a solution that fits their needs.