Ethereum's First Production Scaling Project Is Here – But With a Catch

A TechStars-incubated startup has launched what looks like the first production-ready platform designed to increase the capacity of ethereum.

Called Loom Network, the little-known company is today releasing a developer toolkit that makes it possible to deploy scalable ethereum apps on the second-largest cryptocurrency network, effectively leapfrogging ongoing efforts such as Raiden Network and Plasma.

For network users, the timing of the release couldn't be more welcome. Scaling has long been top of mind for stakeholders of major cryptocurrencies, and on ethereum ever since CryptoKitties congested the network late last year.

But while other developers have been tinkering away on several off-chain solutions, which are in the testing phase right now, Loom Network's platform uses so-called "dappchains," which can be thought of as mini blockchains, that they say are ready today.

Loom Network head of business development Michael Cullinan told CoinDesk:

"Basically, the Loom platform is a developer platform to make it simple to make highly-scalable apps on the blockchain."

Creating chains

To do that, Loom Network – which raised $25 million in a private token sale –takes a bit of a different approach than other scaling projects.

When a developer creates a new program, Loom Network spins up a new blockchain – a "sidechain" of sorts – that's made specifically for the app and then connects to the ethereum blockchain.

The process has noticeable parallels to several other cryptocurrency projects out there – sidechains have been touted as a way to tie different features to bitcoin's main network, and researchers speculate that a new type of fork, called a velvet fork, might one day enable similar functionality.

However, Loom Network's sidechains are different in that they're specifically made for scaling, lifting capacity from the main ethereum network.

Yet, there's a catch, one that Cullinan admitted. "It's not going to have the same level of security that the main ethereum network will have," he said.

And that's because while these sidechains work, they're centralized under Loom Network's control (for the time being). As such, not every action needs to be sent over the ethereum blockchain and Loom will keep track of those actions that aren't.

"Commenting or changing a profile picture doesn't necessarily require the security of the ethereum mainchain," Cullinan said. "That's what would happen on the sidechain."

Although, other actions will need the security and censorship resistance that ethereum offers.

Knowing that transactions are different and that they should be handled differently is one of the reasons Cullinan believes Loom will be successful since the startup offers a "spectrum" of options. It's up to developers to decide how much of their app data they want to be routed over the ethereum network.

Plus, Loom Network plans to "open" the network over time in an attempt to decentralize it further.

Centralization first

This centralization-first approach isn't a new idea in the blockchain world.

Bitcoin sidechain project RSK and even CryptoKitties are examples of projects that are centralized today, but their developers hope, with technological progress, they'll be able to decentralize over time.

However, Loom Network is the first ethereum scalability project to start with the more centralized model first.

That said, some might argue this centralized approach might be worth it, since the apps built on Loom Network so far work well, showing how easy spinning up ethereum-based blockchain apps might be one day.

For instance, earlier this week, the team launched its first test app, DelegateCall, on top of their technology. The web app mirrors StackOverflow, the popular developer question-and-answer forum, yet it's tied to the ethereum blockchain. The team has also launched three other apps on the Loom Network.

While the startup is announcing its product as production ready, not everyone can start deploying apps yet.

For now, the platform is in closed-beta, open to just a few select ethereum developers who want to take a stab at building apps on the platform. Soon that will change, though, when team open-sources the code so that more developers can check it for bugs, Cullinan said.

Despite the caveats around the scalability mechanism's security, the company's recent Reddit threads have carried a lot of excitement, with one user exclaiming:

"This is freaking big."

Chain image via Shutterstock