Zilliqa (ZIL): A Scalable Blockchain and Sharding Innovator

Zilliqa’s Scaling Solution: Blockchain Sharding

Zilliqa is a blockchain network designed specifically for performing complex computations and intensive throughput capacity, with particular utility for enterprise use cases. Founded in 2017 and driven by a dedicated team of researchers and academics associated with the National University of Singapore, the primary goal of the Zilliqa network is to solve the scalability problem that has challenged many of today’s leading blockchain networks like Bitcoin and Ethereum.

Instead of trying to be a jack-of-all-trades blockchain, Zilliqa’s blockchain is built specifically for computationally intensive tasks. The Zilliqa network is able to process a high throughput of transactions on its network through a process called parallelization via computational sharding. On a sharded blockchain network, the task of computing transactions is distributed across partitioned shards of a network. This is theoretically more speedy, efficient, and cost-effective than unsharded networks, where all transactions are processed linearly through one large chain.

The sharded structure of Zilliqa makes it an ideal blockchain for processing more complex computational tasks such as data mining and financial modeling. Zilliqa can also be used for training neural networks, machine learning (ML) applications, and data-based academic research. As industries like machine learning and the Internet of Things (IoT) continue to grow, the need for blockchain-enabled technologies that can scale will only increase, and Zilliqa’s complex blockchain structure is well suited to the task.

Tech Deep Dive: How Sharding Works on Zilliqa

Even by the complex standards of blockchain tech, Zilliqa operates with an intricate tech architecture. Although it runs a Proof-of-Work (PoW) network that relies on computational mining much like Bitcoin and Ethereum 1.0, Zilliqa distinguishes itself with its scalability thanks to its innovations in blockchain sharding. Sharding is a scaling solution that divides a decentralized blockchain network into smaller components called shards, which allows for faster processing. When Zilliqa’s mainnet went live in 2019, it was the first public blockchain to use network sharding as a scaling solution.

As the Zilliqa ecosystem grows and scalability demands increase, Zilliqa is designed to scale on demand through the onboarding of additional ZIL nodes and miners, which will allow for additional shards to be added to the network. ZIL is Zilliqa’s native ERC-20 token. According to its sharding model, if Zilliqa were to have 20,000 nodes, the network could be split up into 25 sub-networks with 800 nodes each that process data simultaneously and in parallel.

On a technical level, Zilliqa uses two types of blocks and consequently two blockchains that work in tandem. Zilliqa has transaction blocks (TX-Blocks) which contain the transactions sent by network users. It also uses directory service blocks (DS-Blocks) which contain data on the network miners who support and secure the network. The TX-blocks store the transaction data that was agreed on by the nodes of a DS-Block; further, every DS-Block links with several TX-blocks.

Zilliqa’s blockchain sharding is a two-part process. First, Directory Service (DS) Committee Nodes are elected, which then initiate the sharding process and assign nodes to each shard. Once transactions are verified in a shard, they can be verified by the full network and enter a global state that combines the transactions in all the shards to a single verifiable source of truth on the Zilliqa blockchain.

Zilliqa’s Bespoke Programming Language Scilla

Short for Smart Contract Intermediate-Level Language, Scilla is a programming language developed specifically for Zilliqa. Focused on being amenable to smart contract security, Zilliqa developed Scilla to verify the security of smart contracts and decentralized applications (dApps) deployed on its blockchain. Developers using Scilla can use mathematical proofs to verify that their smart contracts meet certain requirements. Beyond its security, the smart contract-focused Scilla was designed to fully utilize the scalability and sharding architecture of the Zilliqa network.

Zilliqa’s ZIL Coin Cryptoeconomics

In 2017, Zilliqa launched with a native ERC-20 token on the Ethereum network. Zilliqa’s ZIL tokens were used until Zilliqa launched its mainnet and native blockchain in 2019. At the time of launch, the early ZIL tokens were swapped with new ZIL coins at a 1:1 ratio.

Much like other blockchains, Zilliqa’s native ZIL coin is used to fund and secure its own ecosystem. In addition to incentivizing miners with block rewards and transaction fees paid in ZIL with a Proof-of-Work model, it can also function as a cryptocurrency. ZIL coins can be used to purchase products in online marketplaces and can also be used to purchase other crypto assets and collectibles. ZIL is also required for transactions on the Zilliqa network. Since Zilliqa’s transaction fees are fractions of a penny, ZIL is well-suited for micropayments and the running of low-cost smart contracts and dApps.

While many blockchains halve their PoW mining rewards at set intervals, the ZIL coin mining rewards will gradually decay over the course of a decade-long dispersion. This was done with the goal of keeping the hashrate of Zilliqa stable while still incentivizing miners. Zilliqa is also optimized for GPU mining, which they hope will make it more resistant to the specialized mining hardware used on other blockchains, which makes it difficult for small mining operations to profitably compete for mining rewards. This is intended to support decentralization by evening the playing field for small scale miners.

Zilliqa’s Partnerships and Roadmap

Zilliqa is available on several major exchanges, is supported by major software and hardware wallets, and has numerous partnerships. The Zilliqa dApp Unstoppable Domains is perhaps the most well known and allows users to create readable blockchain domain names that can be used to receive crypto payments in lieu of a hexadecimal crypto address.

Zilliqa also has a collaboration with the Mintable marketplace, that allows you to purchase non-fungible tokens (NFTs) with ZIL coins. Zilliqa partnered with CommX, an investment platform where you can tokenize — and fractionalize — physical assets. This offers retail investors who may not have a high net worth the option to purchase fractions of high-value assets such as fine art or real estate. Zilliqa also has a partnership to support inventory tracking and engine monitoring, as well as working with a blockchain gaming application that uses ZIL and allows for in-game NFT trading.

Zilliqa is continuously working to improve its network and expand its ecosystem by developing numerous protocol improvements, including: storage pruning, sharding upgrades, privacy improvements, cross-chain support, and more. In 2020, Zilswap was launched on Zilliqa as an automatic market maker (AMM). It is run using the ZSWAP governance token and is another sign that Zilliqa is working toward a bright future.