Ethereum Plasma: Everything you need to know

Scalable solutions improve the quality of blockchain networks by increasing their throughput and enabling them to become faster and more efficient. Ethereum Plasma is a solution that makes Ethereum more scalable by decongesting the blockchain’s network and enabling cheaper transactions.

Scaling solutions function like sidechains outside the main Ethereum blockchain but connect to the main blockchain to finalize transactions. In this article, we will discuss the details of Ethereum Plasma and how it benefits the Ethereum ecosystem.

What is Ethereum Plasma?

Ethereum Plasma is a blockchain scaling solution proposed in 2017 by Vitalik Buterin, the co-founder of Ethereum, and Joseph Poon, who co-authored the whitepaper for the Bitcoin Lightning network. The primary goal of the proposal was to solve the prevailing congestion problem encountered by Ethereum users, which led to secondary complications, including high transaction fees.

Ethereum Plasma operates with sidechains that take the burden off the main Ethereum blockchain. These sidechains, or child chains, communicate and interact with the main Ethereum blockchain. Hence, the child chains relieve the main Ethereum blockchain of a significant portion of the transactional responsibilities. It is important to note that child chains are versatile, and users can deploy them for various use cases, depending on suitability.

Ethereum Plasma creates smaller chains on top of an existing child chain, and all of them can operate in parallel, thereby improving the scalability of the Ethereum network.

How child chains address scalability on Ethereum

Child chains tackle one of the three aspects of the blockchain trilemma on the Ethereum network. They remove transaction processing responsibilities from the Ethereum main chain, enabling the blockchain to become more scalable. Hence, with child chains, it is possible to process multiple transactions simultaneously without risking the security of the Ethereum network.

How child chains are arranged on Ethereum Plasma.

The transaction processes carried out on the child chains decongest the main chain and allow it to focus on network security. Notably, child chains do not just accommodate the processing of transactions. Validators on the child chains validate and finalize transactions. The updated child chains are committed to the Ethereum main chain at intervals through periodic anchoring. That way, the child chains are kept in check to maintain consistency with the main chain.

Child chains tackle scalability issues on Ethereum by implementing parallel processing of transactions, maintaining independent state management, processing transactions off-chain, periodically committing to the Ethereum main chain, and creating room for customization for specific use cases.

A closer look at Ethereum Plasma

When we talk about Plasma in the Ethereum ecosystem, we refer to a series of smart contracts that eventually expand as separate blockchains. Although Plasma blockchains can operate independently, they remain connected to the Ethereum main chain. The objective of Plasma blockchains is to allow validators to become more efficient by carrying out multiple validations across different blockchains concurrently.

Plasma blockchains reduce the load on the Ethereum main chain. During their communication with the main chain, Plasma blockchains only transmit the hash data of the block header consisting of crucial block information to the main chain while retaining the data within its network. The information is all the main chain needs to verify if a block is correct.

Plasma blockchains also help Fraud Proof a blockchain by utilizing mathematical mechanisms that detect fraud in the validation protocol. The bulk of the fraud identification process happens within the Plasma blockchain. However, when the network identifies a malicious validator, the identifier submits proof of fraud to the main chain, and the fraudulent block gets removed from the main chain. Correspondingly, the validator involved in the fraudulent process gets punished.

Plasma is a growing Merkle Tree

Plasma blockchains come in the form of trees with the potential to accommodate smaller child chains over time. Plasma developers adopt Smart Contracts and Merkle trees based on the underlying framework. A Merkle tree is an organizing protocol that allows the processing of significant amounts of data in a simplified manner. It makes transaction data less demanding on blockchains and cryptocurrencies.

An illustration of a typical Merkle Tree.

Combining Smart Contracts and Merkle trees allows Plasma blockchains to create unlimited child chains and manage them effectively. The child chains are replicas of the main Ethereum blockchain but in smaller forms. Every child chain has the potential to accommodate more chains, which leads to the tree-like structure of Plasma blockchains.

The child chains comprising a Plasma network are all independent and can be customized differently. They are all Smart Contracts that can serve unrelated purposes in their separate modes. This capability makes it possible for businesses offering unrelated services to implement scalable solutions using Plasma blockchains without the risks of interference.

How is Ethereum Plasma different from sidechains

It is easy to confuse Ethereum Plasma with regular sidechains, considering they both run parallel to other blockchains and can communicate with them when necessary. However, they are different both in structure and operation.

A sidechain is simply an alternate blockchain to a parent chain designed to interact with the parent chain via a blockchain bridge. The basic idea behind sidechains is to run a “smaller” blockchain alongside the main blockchain. That arrangement allows both blockchains to interact and share assets between themselves.

Plasma’s structure is unique. It is not just a single blockchain besides a parent chain. Instead, it is a framework of child chains designed to enhance Ethereum’s scalability.

Both Plasma and sidechains have consensus mechanisms that enable block creation. However, for Plasma, the “root” of each block is published to Ethereum. Each root contains all the information needed to verify the authenticity of a processed block.

The components of Ethereum Plasma

To understand how Ethereum Plasma works, here are the underlying components of the network:

Off-Chain Computation

Off-chain analysis creates a certain level of trust among participants in the Ethereum network. It is a mechanism that allows several transactions to be settled outside the main Ethereum blockchain. The idea behind this concept is that not all transactions need to be validated by every node on the main chain. Therefore, the exempted transactions relieve the main chain of an amount of workload, making it less congested.

Blockchain developers design Plasma blockchains with optimization in mind. It often uses a single operator to manage transaction processes, enabling the network to achieve faster transactions at lower costs.

State commitments

Ethereum Plasma publishes a state commitment periodically on the Ethereum mainnet. Doing so allows the Ethereum main chain to be conversant with the state of the child chains and maintain a level of compatibility between them. That is how the Plasma blockchain can continue to benefit from the main chain’s security.

While Plasma executes transactions off-chain, settlement occurs on the main Ethereum execution layer. Hence, both chains need to be in sync at all times else there would be room for inconsistencies that could lead to the proliferation of invalid transactions.

Entries and Exits

The ability for both blockchains to interact when combining the Ethereum main chain with Plasma is a core requirement. Both chains need to establish a communication channel that allows asset transfer between them to implement the scalability solution. To achieve this, Plasma implements a master contract running on Ethereum to process entries and exits.

Dispute Arbitration

Settling disputes is a core aspect of the Ethereum Plasma scalability solution. A mechanism that enforces the integrity of transactions is used to implement it, with the expectation that some participants could choose to act maliciously. That mechanism used to identify such participants is called Fraud Proof.

A fraud-proof is a claim alleging the invalidity of a particular state transition. Users activate it when a double-spend is suspected. This occurs when a user tries to spend a digital asset twice before the first confirmation is complete. The effectiveness of this process depends on the participant’s vigilance and ability to report such attempts on time before the suspect completes the transactions. When users publish a fraud-proof on time, the network stops the attempted transaction and punishes the culprit.

Ethereum Plasma improves Ethereum’s scalability

Ethereum Plasma was introduced to decongest the Ethereum network and improve its scalability. With this implementation, transactions on the Ethereum network become cheaper, with higher execution throughput.

Beyond throughput and scalability, Ethereum Plasma is adaptable for specific use cases even within the same ecosystem. It makes it easy for businesses and organizations offering unrelated services to operate and interact within the same network. However, despite the versatility of Plasma, it cannot run smart contracts. Only basic transactions, like token transfers and swaps, are possible on the network. Also, withdrawals on Ethereum Plasma take several days to complete. That is a deliberate mechanism that allows room for challenges in the form of fraud proofs.

FAQs

What is Plasma in Ethereum?

Plasma is a separate blockchain alongside the Ethereum mainnet that executes transactions off-chain with its validation mechanism. The root of each chain block validated on Plasma is published on the Ethereum mainnet.

What is Plasma in crypto?

From a general cryptocurrency perspective, Plasma represents a scalability framework consisting of child chains running alongside a parent chain to enable the scalability of the parent blockchain.

What is the difference between Plasma and sidechain?

A sidechain is a single blockchain running beside a parent chain and can interact with the parent chain via a network bridge. Plasma is a framework of child chains designed to enable the scalability of a parent chain running alongside.

Is Matic a plasma?

MATIC Network, now renamed Polygon Network, started as a Plasma framework. However, the blockchain has since evolved into a full-blown Layer 2 blockchain protocol.