Price (USD)$ 0.0262
Circulating SupplySKL 4.03935B
Volume (24h)$ 5.55303M
Market Cap$ 105.57483M
Low/High 24h$ 0.0261 - $ 0.0278
Change (24h)-$ 0.001108
Two of the most pressing issues that modern crypto networks face are scalability and high gas fees. As such, Ethereum had to drop its Proof-of-Work consensus mechanism to enable a more efficient network scaling. However, newer blockchains offer better solutions with their state-of-the-art techniques. One of such projects is the SKALE network.
SKALE network is a Proof-of-Stake protocol that presents a solution for the congestion that occurs on the Ethereum network due to high volumes of developers using the platform. Thanks to the use of elastic sidechains, SKALE is completely integrated into the Ethereum network, allowing users to bypass any traffic congestion on the network by using sidechains for developing dApps. Low costs within the network are achieved through innovative architecture and demand economics. Transaction fees are subsidized in advance by chain renters in the form of SKL tokens enabling growth without sacrificing decentralization, security, or user experience.
SKALE network officially launched in 2018, and was founded by Jack O’Holleran and Stan Kladko, with both founders having experience in blockchain and cryptography. It is a Layer-2 scaling solution that creates a sidechain environment to relieve the congestion on the Ethereum network. It allows developers to host and develop decentralized applications on the network while using SKALE elastic sidechains instead of the Ethereum mainnet.
While Ethereum is transitioning from Proof-of-Work to the more efficient Proof-of-Stake protocol, SKALE represents a valid solution for scaling on the network, justifying the project’s name. Users can define specific sidechains to arrange a suitable environment for creating dApps by choosing protocols, the size of the sidechain in use, virtual machine, parent blockchain, and security measures to create a configurable Elastic Chain for their dApps. As a result, SKALE blockchain creates a highly scalable infrastructure that is interoperable and compatible with the Ethereum platform.
SKALE Network uses nodes to support transactions and operations on the network, while the ecosystem of nodes is divided into subnodes and Node Cores. Node Cores are in charge of overseeing the functions and operations of nodes on the network and provide the interface for users to stake, deposit, withdraw and claim SKL tokens. Subnodes are what give elasticity to the network. Subnodes participate in consensus mechanism functions, run the Ethereum Virtual Machine, and are in charge of interoperability. Subnodes enable interchain communication through the function of interoperability that connects sidechains and the Ethereum network, also creating a network of sidechains.
As mentioned, using an execution layer solution like the SKALE network is highly effective for building and scaling Ethereum-based applications, ranging from games to decentralized finance to productivity, media applications, and everything in between.
Use cases for SKALE may include:
What makes SKALE Network unique is its ability to offer reduced costs for operating dApps during congestion on the Ethereum network. Additionally, SKALE blockchain offers a fast throughput for transactions, speeding up the process of verification in times of high traffic on the platform. Moreover, the network facilitates increased storage capacity and creates a scalable environment where users can test new features without affecting the mainnet in the case of dysfunctionalities or bugs.
Developers can test dApps without affecting the front-end on the mainnet and can easily switch to customizable sidechains with fast execution of transactions and functions for Dapp creation and testing when gas prices skyrocket on Ethereum. Fees on Ethereum can often make dApp development too expensive, unsustainable and unprofitable, which is why SKALE makes a great alternative for developers.
SKALE network has its own token, SKL. The SKALE token is a hybrid use token which represents the right to work in the network as a validator, stake as a delegator, or access a share of its resources by deploying and renting a SKALE chain for a period of time as a developer. SKL is an ERC-777 token, which is fully backwards compatible with ERC-20 tokens and so can be stored in any wallet that supports Ethereum.
There are currently 3,988,019,337 SKL in circulation. The SKALE network has a limited total supply, which acts as an anti-inflation mechanism. Unless it is voted otherwise in the future through the decentralized governance model used on the SKALE Network, no new SKL will be minted once the total supply is exhausted. SKALE’s max supply is 7,000,000,000 SKL.
Users pay SKALE in a subscription-based model to rent these resources (computation, storage, bandwidth) for a predetermined amount of time in the form of a SKALE chain. Validators stake SKL into the network and then gain the right to run nodes and earn both fees and tokens via inflation. Delegators may delegate their tokens to validators and earn rewards.
SKALE tokens can’t be mined and the network doesn’t rely on the power of miners to validate transactions and secure the network. Instead, SKALE uses validator nodes that stake SKL tokens to pools. Additionally, SKL token holders can easily delegate their tokens to SKALE Node validators and earn rewards. Staking adds security to the network as it results in a security collateralization of SKALE chains which Developers pay for in SKL tokens. The fees are returned to validators and delegators for providing security and compute power to the network.
Validators must stake a minimum amount in order to register their node. They can either put up the entire amount themselves or accept delegation from other token holders and have the option to provide a commission rate to the delegators. The minimum lock-up period is 3 months and validators can choose to validate for 3 months, 6 months, or 12 months. They get paid every month and can withdraw their stake immediately after the validation period.
SKALE tokens also play an integral role in securing the SKALE network. The network uses a pool validation model with node validators to ensure that small sets of nodes won’t be compromised as smaller sets are usually more susceptible to corruption.
SKALE network provides an effective way for dApp developers to test, host, and create dApps in a highly scalable environment where developers can adjust and customize sidechain specifications, making them elastic. The blockchain’s unique features may be further developed, which will later lead to its wider acceptance and the token’s raise in price.
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Don’t forget to do your own research before buying any crypto. The views and opinions expressed in this article are solely those of the author.
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