summary:
The digital collection market based on blockchain is one of the main application scenarios of NFT technology. However, the high cost of on-chain handling fees (gas) has hindered the development of the digital collection market to a certain extent. This article lists some cutting-edge technological solutions explored in the current digital collection market to solve the problem of excessive gas costs, including: off-chain methods, on-chain methods, multi-chain deployment, side chains, Layer 2 and cross-chain methods, etc., and also looks forward to some future technological development directions.
1. Digital collection market and on-chain handling fees
The digital collection market based on blockchain is one of the most important application scenarios of NFT technology. As NFT technology is applied to various practical application scenarios, the usage of the digital collection market is also increasing. Taking Ethereum as an example, according to ultrasound.money data, from the implementation of EIP-1559 to December 16, 2021, the gas consumed by the digital collection market OpenSea has reached about 126,414 ETH, surpassing ordinary on-chain transfers and Uniswap, becoming the largest gas consuming application.
So, what is "gas"? Why is the gas consumption in the digital collection market so large?
The so-called "gas" is the term for on-chain handling fees on blockchain platforms such as Ethereum. On-chain handling fees are one of the most common technical features of blockchain platforms. The operation of on-chain transactions, including simple transfers or complex smart contract operations, will use corresponding computing and storage blockchain resources; users who initiate these on-chain transactions will pay corresponding on-chain handling fees for consuming these blockchain resources. Blockchain uses this mechanism to incentivize the maintainers of the blockchain network, while preventing the blockchain network from being attacked by malicious users such as DDoS, maliciously running infinite loop code, etc. Therefore, it can be said that on-chain handling fees play a very necessary and positive role in ensuring the normal operation of the blockchain network.
However, some complex on-chain processes also bring higher on-chain handling fee costs to users. Taking the digital collection market of Ethereum as an example, users usually need to consume gas in multiple processes such as creation, listing authorization, and transfer. For example, in the transfer process, users usually need to consume about 0.02 ETH of gas (it varies according to the gas price at the time. The gas price refers to the unit price of the on-chain handling fee). When the activity of some digital collection application
When the time was relatively concentrated, the overall gas price of Ethereum also soared.
On August 26, the application of digital collections caused the gas price to soar to 1,429 GWei, which is about ten times more than usual.
These gases generally need to be paid by users of digital collection applications. Obviously, excessive gas will hinder the further use and development of the digital collection market, and may also affect the use of other applications on the blockchain network (for example, the application of Ethereum Cat at the end of 2017 caused congestion on the Ethereum network). At present, the digital collection market has conducted some technical explorations to save and reduce gas.
2. Technical solutions to save gas
The problem of excessive gas in digital collections is, to a certain extent, caused by the large amount of data in digital collections, complex business processes, and the need to improve the performance and scalability of blockchain networks represented by Ethereum. To solve these problems, you can refer to various methods to solve scalability technologies and improve efficiency. Some current technical exploration directions include: off-chain methods, on-chain methods, multi-chain deployment, side chains, Layer 2 and cross-chain methods, etc.
Solutions for reducing gas in the digital collection market (Source: Frontier Research Institute)
2.1. Off-chain method
Since gas is generated on the chain, the most natural idea is to use off-chain methods as much as possible. The main solutions include two categories: putting some processes on the original chain outside the chain and postponing some processes on the chain.
Some processes are placed outside the chain
Combined with off-chain process processing to reduce some on-chain steps. Taking Nifty Gateway as an example, by placing some exchange steps outside the chain to reduce on-chain processing steps, the cost reduction goal is achieved. For example, an exchange that originally required a total of 10 on-chain operations can be performed off-chain through Nifty Gateway's exchange process optimization. Only steps that must be confirmed by consensus on the blockchain are retained on the chain, thereby reducing the overall on-chain processing cost.
Some processes are postponed
Postponing the execution of some processes and allowing business processes to run first, allowing digital collection creators to create and publish them first at a lower cost, is an encouraging approach that can provide a more user-friendly experience for creators. A typical representative of this type of solution is OpenSea's Lazy Minting. It adopts a centralized approach, allowing creators to first create content for free and then put it on the shelves for sale. OpenSea uses a centralized approach to store and process it first, and then confirm it on the chain during transactions and other steps (generating gas consumption). At this time, the buyer and seller complete the delivery of digital collections through blockchain consensus.
But this method cannot completely solve the cost problem. Lazy Minting mainly postpones the timing of minting and lets buyers bear it. In a strict sense, it does not reduce the overall cost.
2.2. Optimization of this chain
Optimize code writing
The generation of Gas is mainly due to the consumption of blockchain resources such as computing and storage during the operation of smart contracts. Before creating digital collections, optimizing code writing can reduce gas costs to a certain extent. Some optimization methods include choosing to use an appropriate code base during development (such as using ERC721A and avoiding using ERC721Enumerable), and using optimization tools such as Truffle during compilation.
Batch aggregation
For digital collections that have been deployed on the chain, batching, aggregation, etc. can be used to reduce the overall cost. Taking Genie as an example, this aggregation tool supports packaging multiple operations for different digital collections in different markets into one transaction, while also using a combination of off-chain and other methods to reduce the average cost of a single operation.
2.3.Multiple chains
In addition to optimizing all aspects of computing and storage in this chain, a relatively direct and easy way is to integrate multiple blockchain networks on the application side; users can choose the appropriate network when using it.
Take OpenSea as an example. In addition to the Ethereum platform, OpenSea also provides the option of Polygon network. When the cost of the Ethereum network is high, users can choose to switch to the Polygon network on the OpenSea application.
2.4 Side chain/Layer 2 method
In addition to directly integrating multi-chain networks at the application level, another application option is to start from the blockchain protocol layer and transfer many businesses and processes of digital collections to side chains or Layer 2 to reduce costs, etc. Usually, such solutions also provide cross-chain transfer tools between side chains, Layer 2 and the original chain.
side chain
Side chains usually refer to blockchain networks that are parallel to the main chain and have a two-way bridging function. Ethereum's side chains include xDai, Skale, POA Network, etc. At present, some digital collection markets will choose side chains to reduce the cost of digital collections on the main chain.
A typical case is nifty.ink. It supports users to create and manage artistic works on the xDai side chain, including on-chain creation (mint), transfer (transfer), etc. If users want to transfer digital collection works to Ethereum, they can transfer (upgrade) to Ethereum through the AMB bridge tool, such as publishing to the OpenSea market.
Other similar cases include Axie Infinity’s use of Ronin side chains.
Layer2
Similar to side chains, some digital collection markets have chosen the Layer 2 technology route to reduce costs. One of the more typical cases is Immutable X, which is specially designed for digital collection applications and based on ZK Rollup, and its own digital collection market. Some other solutions include choosing from various digital collection markets and applications on Arbitrum.
2.5 Cross-chain
Cross-chain technology, in addition to solving value and data transfer issues, can also be one of the solutions to solve the cost problem of digital collections. To solve the scalability problem of blockchain and the "Impossible Triangle" paradox, the solution of cross-chain protocol + application of proprietary chain is a very good choice.
Similar to the side chain and Layer 2 solutions, the digital collection market can be deployed on an application-specific chain with lower usage costs; and when it needs to be transferred on a larger scale, it can be transferred through a cross-chain protocol.
Some current cross-chain digital collection solutions mainly use centralized gateways or cross-chain bridges. However, the IBC/TIBC cross-chain protocol based on completely decentralized verification can already support cross-chain transfer of non-homogeneous data content. For example, in 2021, after the Chinese traditional cultural digital artwork IDA was registered and confirmed on the BSN Wenchang chain, it relied on the TIBC cross-chain protocol and cross-chain hub in a cross-chain form, and was transferred from the BSN Wenchang chain to the global market through the cross-chain service hub.
3. Summary and outlook
The on-chain cost problem of digital collections is, to a certain extent, a microcosm of the performance and scalability problems of blockchain networks represented by Ethereum. Fortunately, the rapid development of underlying technologies such as Layer 2 and cross-chain in recent years, the prosperity of on-chain applications and the ecosystem have provided practical solutions for the current application of digital collections. Current solutions include centralized deferred processing, optimization of processing on this chain, deployment of multiple chains, use of side chains and Layer 2 expansion technology outside the chain, and cross-chain protocols.
It should be pointed out that there are still areas for improvement in some current technical implementations such as over-centralization (such as some cross-chain bridges) and technical security risks; completely decentralized cross-chain digital collection methods based on IBC/TIBC are emerging and need to be further supported for more applications; there is still room for improvement in digital collection support technology based on Rollup.
However, with the continuous development and improvement of blockchain scalability and cross-chain technology, the support of related technologies for the application of digital collections will become more complete, and the technical solutions will become more abundant and diverse.
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