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Glossary

Quasar Smart Contract (OMG Foundation)

November 21, 2023 - Around 4 mins mins to read

Quasar Smart Contract (OMG Foundation) is an innovative solution developed by the OMG Network to tackle a significant challenge faced by layer-2 blockchain projects. In most cases, transferring assets from layer 2 to layer 1 in blockchain networks can take up to 14 days, which is a slow and inefficient process.

The OMG Network, powered by its Plasma layer-2 scaling solution, has successfully addressed the scalability issue associated with layer-2 blockchains. However, they have identified a common challenge faced by layer-2 blockchains that utilize fraud proofs, known as the “exit period challenge.” OMG Network has introduced the Quasar Smart Contract approach to overcome this challenge.

The “exit period challenge” refers to the time it takes for assets to be withdrawn from a layer-2 blockchain back to the layer-1 blockchain. In some cases, this process can be quite lengthy, causing delays and inconvenience for users. The Quasar Smart Contract introduces a solution known as “fast exit,” which significantly reduces the time it takes for assets to be withdrawn and made available on the layer-1 blockchain.

What is the Significance of Layer-2 Solutions?

In order to understand the significance of Quasar Smart Contract and layer-2 solutions, it’s important to grasp the challenges faced by blockchains in terms of scalability, decentralization, and security. These three properties are crucial for a blockchain to be successful, but it is generally not feasible for a chain to simultaneously possess all three properties. Scalability and decentralization are often inversely proportional, meaning that as a blockchain becomes more scalable, it becomes less decentralized, and vice versa.

Ethereum, being one of the most popular blockchains, has faced challenges such as high transaction fees and long waiting times due to its limited scalability. To address this fundamental challenge, various projects have been exploring the concept of processing transactions on a second layer. These solutions, known as layer-2 solutions, aim to provide scalability and improved transaction throughput without compromising on security and decentralization.

One of the prominent layer-2 solutions is Plasma, which operates by having multiple copies of the main chain coexist as subsidiary chains. These subsidiary chains, also known as child chains, process thousands of transactions before bundling them together and sending them back to the parent chain as a single transaction. The Plasma framework ensures that child chains are non-custodial and trustless, meaning that users have full ownership of their funds and can rely on the most recent accurate snapshots of the plasma chain to recover their tokens in case of any errors or exploits.

Plasma layers offer high throughput and are capable of handling over 1,000 transactions per second at a fraction of the cost compared to traditional technologies. This scalability comes with the advantage of lower transaction fees and faster confirmation times, making it an attractive solution for projects and users looking to process a high volume of transactions efficiently.

However, it’s important to note that Plasma layers primarily focus on transactions and swaps and do not fully support smart contracts. While transactions and swaps are crucial components of blockchain ecosystems, smart contracts play a vital role in enabling complex, programmable functionalities. Therefore, projects like the OMG Network have introduced the Quasar Smart Contract to bridge this gap and enable the execution of smart contracts on layer-2 solutions.

What are examples of Layer-2 Projects?

Two notable projects that leverage Plasma layers as part of their layer-2 solutions are Polygon and the OMG Network. Polygon is a framework for building Ethereum-compatible blockchains and aims to provide scalability and a superior user experience. It achieves this by utilizing multiple sidechains and a plasma chain to handle transactions, while still securing the finality of transactions on the Ethereum mainnet.

The OMG Network, on the other hand, is a layer-2 scaling solution specifically designed for Ethereum. By utilizing the Plasma framework, the OMG Network enables faster and more cost-effective transactions on Ethereum. With the introduction of the Quasar Smart Contract, the OMG Network aims to expand the capabilities of their layer-2 solution by bringing smart contract execution to the network.

These layer-2 projects are just a few examples of the many initiatives that are exploring innovative solutions to address the scalability challenges faced by blockchain networks. By leveraging layer-2 solutions like the Quasar Smart Contract, these projects aim to unlock the full potential of blockchain technology by improving transaction throughput, reducing costs, and enabling the execution of more complex functionalities.

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Author

Coincu

Glossary

Quasar Smart Contract (OMG Foundation)

Quasar Smart Contract (OMG Foundation) is an innovative solution developed by the OMG Network to tackle a significant challenge faced by layer-2 blockchain projects. In most cases, transferring assets from layer 2 to layer 1 in blockchain networks can take up to 14 days, which is a slow and inefficient process.

The OMG Network, powered by its Plasma layer-2 scaling solution, has successfully addressed the scalability issue associated with layer-2 blockchains. However, they have identified a common challenge faced by layer-2 blockchains that utilize fraud proofs, known as the “exit period challenge.” OMG Network has introduced the Quasar Smart Contract approach to overcome this challenge.

The “exit period challenge” refers to the time it takes for assets to be withdrawn from a layer-2 blockchain back to the layer-1 blockchain. In some cases, this process can be quite lengthy, causing delays and inconvenience for users. The Quasar Smart Contract introduces a solution known as “fast exit,” which significantly reduces the time it takes for assets to be withdrawn and made available on the layer-1 blockchain.

What is the Significance of Layer-2 Solutions?

In order to understand the significance of Quasar Smart Contract and layer-2 solutions, it’s important to grasp the challenges faced by blockchains in terms of scalability, decentralization, and security. These three properties are crucial for a blockchain to be successful, but it is generally not feasible for a chain to simultaneously possess all three properties. Scalability and decentralization are often inversely proportional, meaning that as a blockchain becomes more scalable, it becomes less decentralized, and vice versa.

Ethereum, being one of the most popular blockchains, has faced challenges such as high transaction fees and long waiting times due to its limited scalability. To address this fundamental challenge, various projects have been exploring the concept of processing transactions on a second layer. These solutions, known as layer-2 solutions, aim to provide scalability and improved transaction throughput without compromising on security and decentralization.

One of the prominent layer-2 solutions is Plasma, which operates by having multiple copies of the main chain coexist as subsidiary chains. These subsidiary chains, also known as child chains, process thousands of transactions before bundling them together and sending them back to the parent chain as a single transaction. The Plasma framework ensures that child chains are non-custodial and trustless, meaning that users have full ownership of their funds and can rely on the most recent accurate snapshots of the plasma chain to recover their tokens in case of any errors or exploits.

Plasma layers offer high throughput and are capable of handling over 1,000 transactions per second at a fraction of the cost compared to traditional technologies. This scalability comes with the advantage of lower transaction fees and faster confirmation times, making it an attractive solution for projects and users looking to process a high volume of transactions efficiently.

However, it’s important to note that Plasma layers primarily focus on transactions and swaps and do not fully support smart contracts. While transactions and swaps are crucial components of blockchain ecosystems, smart contracts play a vital role in enabling complex, programmable functionalities. Therefore, projects like the OMG Network have introduced the Quasar Smart Contract to bridge this gap and enable the execution of smart contracts on layer-2 solutions.

What are examples of Layer-2 Projects?

Two notable projects that leverage Plasma layers as part of their layer-2 solutions are Polygon and the OMG Network. Polygon is a framework for building Ethereum-compatible blockchains and aims to provide scalability and a superior user experience. It achieves this by utilizing multiple sidechains and a plasma chain to handle transactions, while still securing the finality of transactions on the Ethereum mainnet.

The OMG Network, on the other hand, is a layer-2 scaling solution specifically designed for Ethereum. By utilizing the Plasma framework, the OMG Network enables faster and more cost-effective transactions on Ethereum. With the introduction of the Quasar Smart Contract, the OMG Network aims to expand the capabilities of their layer-2 solution by bringing smart contract execution to the network.

These layer-2 projects are just a few examples of the many initiatives that are exploring innovative solutions to address the scalability challenges faced by blockchain networks. By leveraging layer-2 solutions like the Quasar Smart Contract, these projects aim to unlock the full potential of blockchain technology by improving transaction throughput, reducing costs, and enabling the execution of more complex functionalities.

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