With DeFi projects taking the blockchain world by storm, Ethereum is once again being overwhelmed by demand as its scalability limitations are painfully exposed.
Average transaction costs have now shot up to $8.95, whilst executing complicated DeFi smart contracts is even more expensive. Uniswap gas fees for example, have reached a whopping $55 at the time of writing. With such astronomic fees, Ethereum can be prohibitively expensive, or simply cost-inefficient, for many of its uses. In particular, smaller transactions.
Currently, the problem of scaling remains Ethereum’s biggest challenge, with a network capacity of only 14 transactions per second (tps). Yet solutions to Ethereum’s scaling problems already exist…
As Vitalik suggests, using layer 2 (L2) solutions can help resolve some of Ethereum’s scaling issues, especially for simple transactions. Tether, the world’s largest stablecoin, recently added L2 transaction support through the OMG network, and is now also integrating ZK-Rollups to improve its transaction costs on Ethereum.
However, Gluwacoin is not just a simple ERC-20 token. It also supports custom functions for non-custodial exchange. Therefore, it requires a scaling solution capable of executing complex Ethereum smart contracts with minimal friction.
Having considered several possible scaling solutions, Gluwa is excited to announce that we have partnered with Luniverse to deliver a feature-complete, Ethereum-based sidechain for our users. Luniverse’s sidechain not only provides full Ethereum smart contract support, it also enables non-custodial exchange, features a block explorer, as well as a complete API and event listener to facilitate seamless cross-chain Gluwacoin transfer.
What this means for you...
The Gluwa mobile app will soon feature both a mainchain Ethereum wallet and a sidechain Luniverse wallet. A user will be able to transfer Gluwacoin between these wallets just as they would any other normal transaction. The mainchain wallet will remain fully integrated within the Ethereum ecosystem.
However, transactions on the sidechain will be faster and cheaper than transactions on the Ethereum mainchain. Luniverse’s sidechain has improved scalability, supporting over 1000 tps. Whilst migrating transactions to a sidechain ensures that users do not need to compete for limited bandwidth on Ethereum. This allow us to offer lower transaction fees to users.
Which wallet you choose is ultimately up to you. The decision should depend on your usage priorities. In both cases however, you will be the sole custodian of your wallet’s private key, ensuring that all users retain full custody of their assets, regardless of which wallet they choose to use.
Behind the Scenes
When a user transfers Gluwacoin from a mainchain wallet to a sidechain wallet, the transfer triggers Luniverse’s event listener. The two chains then perform a metaphorical ‘handshake’ whereby Gluwacoin on the mainchain is automatically burnt and an equal amount of Gluwacoin is minted to the corresponding sidechain wallet. This ensures that there is always a 1:1 conversion between both chains, with no duplication of assets. Moving from the sidechain to the mainchain works in the same manner.
Gluwa communicates with the sidechain via the REST API provided by Luniverse. However, just as on the mainchain, Gluwa users will still have to sign each Gluwacoin transaction as Gluwa has no access to user’s private keys on the sidechain either.
You can read more about the pros and cons of sidechains here.
As Luniverse supports public accessibility, any Gluwacoin on the sidechain will also be fully compatible with the Creditcoin Network. Gluwa will implement a Creditcoin plugin for Gluwacoin loans on the sidechain. Due to the lower transaction costs of Luniverse’s sidechain, lending transactions on the Creditcoin Network will also benefit from significant cost-efficiency improvements.