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Bybit Learn
Mar 17, 2022

Shard Chain

A shard chain is a sub-blockchain of the main Ethereum blockchain that’s intended to ease blockchain network congestion issues and improve the transactions per second (TPS) rate.

What Is a Shard Chain?

A shard chain, which is a sub-blockchain of the main Ethereum blockchain network, facilitates transactions. Each shard chain has its own unique smart contracts and account balances, and operates independently. However, transactions are still secured by the main Ethereum blockchain.

This database partitioning strategy aims to solve the common challenges associated with the Ethereum blockchain network. Primarily, it’s meant to help process transactions more quickly, easing the blockchain network’s congestion problems.

What Is Sharding?

Sharding refers to the process of merging a subset of a blockchain’s nodes to form a shard chain. The nodes' primary role is to facilitate transactions, and the transaction verification process is done in parallel with the main Ethereum blockchain. Therefore, the chances of security breaches are reduced to almost nil, since the Ethereum blockchain network is tamper-proof.

It's also important to note that every shard chain has the same consensus and security protocols as the main Ethereum block. Because the shard chains are created for a specific purpose, they can scale up faster than the main blockchain network.

This means that if you send a coin to a friend, you only need to monitor the specific shard that captured the transaction, and not the entire blockchain network.

The main aspect to remember is that a shard chain is still directly connected to the beacon blockchain, even though it operates independently. On the chain, the nodes are referred to as “collators,” and they function like miners.

Every collation has a unique header that checks the validity of every transaction. For a transaction to be processed successfully, the header must have a minimum of two-thirds of collators. Information about the state of the shard chain and identity is also contained in the header.

As soon as a collation is proposed, notary nodes which are randomly selected check it and relay it to the main Ethereum blockchain for further verification.

Concisely, the primary roles of the main blockchain network are to select collators, record timestamps, and benchmark the transaction to ensure security and transparency.

Does Ethereum Need Sharding?

One of the main challenges facing the Ethereum blockchain is scalability. As more people join the network, the blockchain's ability to process transactions becomes more limited. Consequently, transaction fees increase, and the number of transactions the blockchain can process per second becomes lower, especially when compared to other advanced blockchains, such as Polygon or Solana.

Shard chains solve the scalability problem while keeping the network decentralized and secure. Because each chain can facilitate transactions independently, the Ethereum blockchain’s transactions per second (TPS) rate increases.

Currently, the main Ethereum blockchain network can only process 15 transactions per second. Due to congestion and high demand in the network, the cost per transaction sometimes gets as high as $200. Very few people can afford to pay such high fees.

Closing Remarks

The Ethereum protocol is currently undergoing significant changes. In order to meet global demand, client teams are trying to upgrade the protocol to scale at a much higher rate. Shard chains resolve the scalability and efficiency challenges associated with the Ethereum blockchain by decongesting the network and increasing its TPS.

They also provide additional, cheaper storage layers for apps and rollups to store data. With shard chains, Ethereum will be able to offer low transaction fees while maintaining high security.