Scalability
Sovereign Assets • Layer 1s • Payment Networks
network capacity expansion capability
Scalability is a blockchain or network’s ability to handle increasing amounts of work, users, or transactions efficiently as demand grows. A scalable system can add users and activity without experiencing significant slowdowns, higher fees, or failures. In blockchain, scalability is a core challenge—solved through larger block sizes, faster consensus, Layer 2 protocols, rollups, and sidechains, each offering their own trade-offs in decentralization and security.
Use Case: Ethereum’s surge in NFT and DeFi activity led to high fees and congestion. Scalability solutions like Optimism, Arbitrum, and Polygon allow more transactions and users by processing activity off-chain or in parallel.
Key Concepts:
- Throughput — The number of transactions a network can process per second (TPS)
- Rollups — Batch transactions off-chain, compressing data before posting to the main chain
- Sidechains — Independent blockchains that add transaction capacity to main networks
- Layer Two Protocol — Networks built on top of Layer 1 to scale capacity and reduce costs
- Layer One Protocol — Base blockchain layer where scalability constraints originate
- Decentralization — Network property often traded against scalability gains
- Security Model — Protection guarantees that scaling solutions must maintain
- Trade-Offs — Balancing scalability with decentralization and security
- Gas Price — Transaction costs that spike when scalability is insufficient
- ZK-Rollups — Zero-knowledge proof scaling with cryptographic validation
- Optimistic Rollups — Scaling solution assuming transactions are valid unless challenged
- dApps — Decentralized applications requiring scalable infrastructure
Summary: Scalability is vital for blockchain adoption, enabling networks to serve millions of users, support complex dApps, and keep fees low without sacrificing decentralization or security.
The Blockchain Trilemma
scalability’s fundamental constraint
Blockchains can optimize for only two of three properties simultaneously:
– Scalability — High transaction throughput
– Decentralization — Many independent validators
– Security — Resistance to attacks and manipulation
= Centralized
• Solana (high TPS, fewer validators)
• BSC (fast, Binance-controlled)
• Traditional databases
= Slow
• Bitcoin (7 TPS)
• Ethereum L1 (15-30 TPS)
• Maximum trustlessness
= Less Secure
• Some alt-L1s
• Unproven consensus
• Higher attack risk
Scaling Solutions Comparison
trade-offs across different approaches
Layer 2 Ecosystem Map
major scaling solutions by type
• Arbitrum — Largest TVL, EVM-compatible
• Optimism — OP Stack, Superchain vision
• Base — Coinbase L2, OP Stack
• Blast — Native yield, OP Stack
• Mantle — Modular design
• Fraud proof security model
• zkSync Era — General purpose zkEVM
• StarkNet — Cairo language, STARK proofs
• Polygon zkEVM — EVM equivalence
• Scroll — zkEVM, Ethereum alignment
• Linea — ConsenSys zkEVM
• Validity proof security model
• Polygon PoS — Independent validators
• Gnosis Chain — Community-owned
• Ronin — Axie Infinity chain
• Own security model
• Bridge to mainnet
• Faster but less secure
• Lightning Network — Bitcoin payments
• Raiden — Ethereum payments
• Off-chain transactions
• Instant finality
• Limited to payments
• Channel liquidity required
Scalability Metrics
how to evaluate network capacity
• TPS — Transactions per second
• Block time — How fast blocks are produced
• Finality — When transactions are irreversible
• Gas limit — Max computation per block
• Block size — Data capacity per block
• Throughput — Actual vs theoretical TPS
• Transaction cost — Fee in USD
• Confirmation time — Perceived speed
• Failed transaction rate — Network reliability
• Peak capacity — Performance under load
• Fee predictability — Cost stability
• Congestion frequency — How often it slows
• Theoretical TPS vs real-world TPS
• “TPS” counting non-user transactions
• Centralized sequencers
• Unproven at scale
• No mainnet stress tests
• Marketing numbers vs reality
• Can it handle your use case?
• What happens during high demand?
• How decentralized is it really?
• What’s the security model?
• Is the tech battle-tested?
• Who controls the sequencer?
Scalability Checklist
understanding network capacity trade-offs
☐ Know the blockchain trilemma
☐ Understand throughput limits
☐ Recognize trade-offs exist
☐ Know L1 vs L2 difference
☐ Understand gas price relationship
☐ Appreciate decentralization value
☐ Know rollups batch transactions
☐ Understand optimistic vs ZK rollups
☐ Know sidechains have own security
☐ Recognize state channel limits
☐ Understand withdrawal delays
☐ Know security inheritance
☐ Question TPS marketing claims
☐ Check real-world performance
☐ Verify security model
☐ Assess validator distribution
☐ Test during high congestion
☐ Compare fees across solutions
☐ Match solution to use case
☐ Consider dApp requirements
☐ Factor in withdrawal times
☐ Evaluate bridge security
☐ Plan for congestion events
☐ Diversify across L2s