Topics Altcoins
Bybit Learn
Bybit Learn
Beginner
Aug 4, 2022

SKALE (SKL): Scaling Blockchains Linearly With Zero Gas Fees

As cryptocurrency becomes an essential part of everyday life, the problem of scalability becomes more of an issue. Technology that works perfectly for small numbers of users may completely collapse when it has to handle thousands of transactions at once. The SKALE network hopes to solve this problem. When used correctly, SKALE has the potential to change the way congestion is handled on the Ethereum network.

What Is SKALE?

SKALE is a blockchain network that solves the scaling problem common on Ethereum-compatible blockchains by creating elastic sidechains that decentralized applications (DApps) can use to run transactions.

The SKALE network offers a complex blend of various features and services. To understand what it is, you have to take a look at its overall purpose. This scaling solution essentially provides Ethereum functionality for DApps without having to operate the slow and pricey main chain. The SKALE ecosystem is made up of a variety of interconnected services, blockchains and even cryptocurrencies. SKALE partners with a variety of DeFi services, including NFTs and DApps. It also has its own native cryptocurrency called SKL.

There are a lot of different working parts within the network, but the main component overall is elastic sidechains. These are independent blockchains that users can adjust to fit their specific needs. Developers can adjust these sidechains to suit various protocols, specifications, sizes and virtual machines. These SKALE sidechains can then bridge with the main Ethereum chain, or connect with each other.

History of SKALE

The concept dates back to 2017, when co-founders Stan Kladko and Jack O'Holleran bonded over their interest in crypto. Both were initially trying to create DApps but ran into problems with scaling. As they discussed the problems they were dealing with, they realized that there was a major need for better scaling between Ethereum and DApps.

Kladko was the first to conceptualize the SKALE architecture, while O'Holleran was responsible for realizing the ways the network could support DApps better. The SKALE network launched officially in 2018. It got its first financial support from Signia Venture Partners and Floodgate, and since then, investors like Winklevoss Capital, Hashed and Multicoin Capital have also gotten involved.

In June of 2020, SKALE was able to fully launch its first phase. This initial version of the network demonstrated the applications of elastic sidechains but didn't allow token transfers or staking. Over the years, SKALE has continued to announce more features for their network, such as crypto tokens and Ethereum connectivity.

How Does SKALE Work?

SKALE works by providing a multichain network with multiple virtualized subnodes. You can think of these additional chains as a "road" that’s used to transmit information. The main Ethereum layer gets clogged with too many transactions, so SKALE helps reduce "traffic" by building new roads. These roads connect to the main chain with a bridge that lets users transmit large blocks of data on and off the Ethereum main chain. Ultimately, this means that the SKALE network provides independent ways for people to transmit and process information. New subnodes can join the network at any time to accommodate additional users.

SKALE stands out due to the elasticity and interconnectivity of its subchains. SKALE enables developers to build sidechains that specifically suit their parameters, such as size, parent blockchain, protocols and security measures. This elasticity ensures that new sidechains are as efficient and effective as possible. The other particularly helpful part of SKALE's process is interconnectivity. While other networks only allow a bridge to the Ethereum blockchain, SKALE lets sidechains bridge with each other. This can make it simple to do things like convert an in-game coin from one DApp into a coin that can be used to purchase an NFT on another DApp.

SKALE works to lower fees for users by changing the way they’re charged for services. Traditionally, people who use DApps must pay gas fees to perform any function on the Ethereum network. This can get pricey very quickly, especially when high levels of congestion increase fees. Meanwhile, SKALE only charges a monthly subscription fee. If developers choose to use SKALE sidechains to host DApps, they pay a simple, much lower fee in exchange for performing as many actions as they want off the main Ethereum network.

Features of SKALE Blockchain Network

SKALE network is loaded with a variety of different features that make it beneficial to DeFi enthusiasts. Here are some of the main reasons you might want to consider working with it..

Ethereum Interoperability

Unlike some other scaling solutions, the SKALE network is designed specifically for Ethereum. It’s native to Ethereum and works seamlessly with all Ethereum protocols. This makes SKALE ideal for creating DApps. Users get all the security and power of Ethereum, thanks to this seamless integration.

Modular & Linear Scaling

SKALE Network uses a linear scaling system where new virtualized subnodes can create new chains for the entire network. This modular method of growth has unlimited potential. As each new node joins the network, system-wide computational power and capacity also increase.

On-Chain File Storage

The versatility of SKALE sidechains allows DApps to store their files on-chain. Users can store websites, applications, NFTs and AI/ML technology within the chain. This reduces the need for centralized cloud hosting platforms, so it's far more efficient. Reducing the number of times information has to move around also improves security for sensitive material.

Instant Finality

Every chain on SKALE has immediate finality. This means that all transactions instantly become committed to the blockchain, and cannot be altered, canceled or reversed. Instant finality is useful for handling issues with MEV or poor latency. Instant finality also provides more security because it prevents time bandit attacks.

Collusion-Resistant

All of the chains within the network share security, but they don't share performance. Any virtualized subnodes and validators can run concurrently on different chains. The nodes are randomly assigned and regularly rotated. This prevents any collusion that could impact blockchain integrity.

Staking

The network also provides some special perks to users who are willing to invest in their crypto. Their second launch phase included staking, which lets users earn interest in exchange for locking up tokens for a set amount of time. In addition to being a nice benefit for committed users, staking is also reassuring for other investors because it’s one of the leading methods of growing a cryptocurrency.

Eco-Friendly

SKALE’s proof of stake (PoS) network doesn’t rely on energy use to mine cryptocurrency. This automatically ensures it has a lower ecological footprint. In addition to the straightforward energy savings of SKALE's mining method, it also offers additional efficiency by making it easier to perform transactions.

Zero Gas Fees

Of course, for many users, the biggest advantage of SKALE is that it eliminates gas fees. These can be a major challenge for DApp creators because they assign a cost to every single transaction on a network. SKALE eliminates this fee system, and instead charges a single price for the sidechain itself. This lump-sum cost is usually much cheaper than paying for each individual transaction with gas fees.

Use Cases of SKALE

How Does SKALE provide advantages to developers interested in working with Ethereum? Here are some examples of ways creative thinkers are using the network to enhance their designs.

Tokenized Card Games

For one developer currently working on an angel battle game, the SKALE network has been extremely useful. Card-based games typically focus on creating individualized tokens that have various levels of rarity. This can become a challenge when every single transaction has to be recorded on the main Ethereum network, because the gas fees can be astronomical (while gameplay lags).

However, this developer has started using scalable execution layers to make their gameplay smoother. They've even found that they can add gameplay that alters cards with the inclusion of armor and new powers. The network is reliable enough to handle constantly creating these new tokens, as cards change over time.

Uncensored Media Streaming

Another team building on the network is focusing on creating censorship-resistant streaming services. Users select a song, play the song and then send a small payment directly to the artist. By cutting out the middleman, smart contracts on the blockchain allow open access to potentially any type of music.

In addition to saving money on fees, this playback service greatly benefits from SKALE's interconnected sidechains. Devs can use different sidechains to address different functions within their service. Ultimately, they can ensure that each component of their project gets the speed, security and storage optimization it needs.

Crowd-Sourced Events

Not all SKALE-based projects are solely technology-based. There are many ways that this technology can move into the physical world. One developer is using the network to design a service that allows artists to essentially crowdsource events. Attendees submit funds for a proposed event, and if enough funds are raised, the event proceeds. If additional people attend the event and it turns a profit, the sponsors get a payout.

This Ethereum-based blockchain model allows for extra accountability, security and convenience during the crowdfunding process. With the use of smart contracts, user funds are fully secured, and users stay informed of the effects of their sponsorship.

SKL Tokenomics

The SKALE network itself has an intriguing user base, but it’s also worth considering the native cryptocurrency. The SKALE token (symbol: SKL) is primarily a utility token which cannot be mined, and is instead generated intentionally. It works as a validator that allows developers to pay for an elastic sidechain, operate nodes and earn fees themselves.

SKL was initially launched with 4.14 billion coins. The total maximum supply of SKL will be 7 billion. Many of the initial coins were given to system supporters and validator communities at the time of the launch. Some of the funds have also been set aside to help with future funding, and some have been locked until 2025.

Since it was introduced in 2020, SKL has undergone a lot of changes. The coin at one point jumped to an all-time high of $1.22 in March 2021 before stabilizing at a lower price. As of August 2022, SKL has a price of $0.05771 per token and a market cap of $212 million. Though individual SKL tokens have a low price, they are still fairly trendy. 

The Road Map of SKALE Blockchain Network

The SKALE network has gone through many changes as it’s evolved. Instead of releasing everything at once, the developers have decided to make incremental changes through regular releases. This allows them to offer current features to users while still having time to work on later features. It also gives them the ability to test their setup and make changes as necessary.

Mainnet Launches

The network launches new upgrades by first putting candidates on its testnet and then moving them to the mainnet. Past releases have added features such as Ethereum network compatibility, modular virtualized subnode architecture and token releases. The most recent release in March 2022 was particularly notable. Called the SKALEVERSE for its extensive range of new features, this upgrade brought extra interconnectivity, the ability to work with rollups, and additional decentralized exchange hubs.

Denali Network Upgrade

Another upgrade was the 2021 Denali release. This upgrade was responsible for many iconic SKALE features, including:

  • Multichain functionality

  • Modular scaling

  • Faster blocktimes

  • Almost instant finality

  • Transactions with zero gas fees

  • Ethereum interoperability

  • High TPS

SKL Price Prediction

Many are wondering what's next for SKL prices. Throughout most of 2022, the coin's price has remained mostly stable. It's primarily been holding in the $0.05 to $0.10 range, with occasional jumps to $0.30. With the coin's current direction, achieving a price of $1 in 2022 seems unlikely.

However, a close analysis of candlestick charts shows a few distinct patterns. Typically, SKL increases face resistance at price levels of $0.16, $0.27, $0.37 and $0.43. If these barriers are overcome, reaching a price of up to $0.50 seems possible. For the most part, analysts are neutral to positive on SKL. Prices seem unlikely to drop, but a drastic rise is unlikely as well.

Where to Buy SKL

So, if SKL is primarily a utility token, how can you even buy it? There are multiple ways to add SKL to your portfolio through crypto exchanges. For example, Bybit allows users to trade SKL in the form of perpetual contracts. Buying the token is as simple as following these steps:

Step 1: Create an account with Bybit and sign in on the app or website.

Step 2: Link your debit or credit card to your account.

Step 3: Click the Buy Crypto button to begin searching for a crypto to buy.

Step 4: Select the crypto you’d like to buy from the drop-down menu. Bybit lets users purchase BTC, ETH and USDT outright.

Step 5: Enter the amount of crypto you would like to purchase and make payment for it in USD or any other fiat currency.

Step 6: Click the Market tab, where you can view different crypto exchanges.

Step 7: Search for SKL in the search bar.

Step 8: Choose a market where you can sell your current crypto to buy SKL.

Step 9: Select one of the red Sell prices to buy the SKL outright, or enter your own bid with the custom amount you'll pay for your SKL.

Step 10: Finalize your order.

Is SKL A Good Investment?

SKL is good for those who want something stable and low-risk. It doesn't make many exciting jumps, but it isn't prone to sudden drops either. If your investment strategy is to buy into promising companies and wait for their prices to rise when they announce innovations, SKL is a good choice.

Why is SKL so dependable? Though some people use SKL strictly as a coin for trading, it also has a lot of utility within the SKALE network. This makes the coin a fairly reliable bet. As long as developers are working on the network, SKL will be desirable to own. With the network's continued development and high number of applications, SKL is likely to remain a popular utility token for quite a while.

The Future of SKALE

So far, SKALE's done a great job of capitalizing on the momentum from its initial launch. Generally speaking, DeFi analysts have been pleased with SKALE’s ability to actually deliver what they promise. They had a modest start but have quickly implemented a lot of unusual and helpful features. The network continues to provide good returns for investors, and more and more developers are starting to work with their elastic sidechains.

All of this promising feedback from people involved with the network indicates that the company itself has a fairly bright future. As long as they can continue to do the excellent job they've been doing, the network will continue to improve. Its ability to assist with Ethereum network scaling and integration may end up revolutionizing the way DApps are made.

The Bottom Line

The SKALE network adds a lot of functionality and flexibility to the Ethereum blockchain. It’s especially useful for those involved in DeFi concepts like NFTs and DApps. Furthermore, native SKL tokens have some exciting potential for trading. All things considered, the SKALE network is certainly worth looking into.