Microchains: A New Paradigm for Web3— Investing in Linera
Web3 technology promises to usher in the next era of the Internet — an era that will empower users with a new generation of asset-aware applications and give them more democratic control over the digital (and potentially the physical) economy. In reality, this future seems elusive because there is still a massive performance gap between web2 and web3.
While many companies seek to “onboard the next billion users,” what happens after billions of users actually get onboarded? It seems like there are few if any decentralized networks designed to handle simultaneous activity from millions of people much less billions.
Today, we at Borderless are excited to announce our investment in Linera, an integrated, multichain network designed to deliver elastic scalability and responsiveness for web3 applications. We led the current $6M round bringing in a total of $12M in seed funding that includes a strong group of strategic investors, including a16z crypto, Tribe Capital, Laser Digital Ventures, DFG, Cadenza, Block1, Eterna Capital, MH Ventures, Matrixport, L2IV, ArkStream, Flow Traders, GSR Markets, and Open Web Collective (OWC).
In contrast to the prior two spinoffs from Libra/Diem (Sui and Aptos), Linera adopts a completely new multichain design that does not depend on a specific programming language. Linera was initially inspired by the low-latency global payment protocol FastPay co-authored by Mathieu Baudet, Linera’s founder and CEO, while he was a researcher at Meta to reliably deliver instant global payments for billions of users (initially for Libra/Diem and Calibra/Novi). This research demonstrates that the first and primary use case for blockchains, peer-to-peer payments, can be realized at scale, by designing the entire system around user-account, removing mempools altogether, and minimizing interactions between validators. Linera generalizes FastPay by turning user accounts into microchains, adding smart contracts, and supporting arbitrary asynchronous messages between chains.
Linera’s capacity for scaling is designed to support millions and conceivably billions of simultaneous transactions. And, while unprecedented, this web2-like performance and reliability is essential for web3 to actually scale applications like payments, messaging, trading, social media, generative AI, atomic swaps, auctions, and voting and more to billions of users around the world. We believe this is what Linera is designed to deliver.
No more waiting (in mempools)
Linera introduces “microchains” which are lightweight chains that operate in parallel within a common set of validators. This decentralized microchain network removes the need for a mempool and only the chains being actively extended with new blocks require work from validators.
Why is this so important? Currently, most blockchains depend on memory pools (“mempools” are like a waiting room) to store pending transactions waiting for validation from a node before it is committed to a block on the blockchain. When you sign a transaction, you have to rely on either a miner or a validator to add it to a block and broadcast it to the network.
The problem is that when many users are active (e.g. even in the tens of thousands), most blockchains simply stop responding or demand exorbitant fees, becoming effectively unresponsive. This is often referred to as the “blockspace scarcity” problem and it significantly undercuts the potential for web3 to match web2 performance and scalability.
While novel non-monolithic blockchains, optimistic and zk roll-ups deliver higher efficiencies and flexibility, each produces its own set of tradeoffs and costs:
- Most blockchains (including “app-chains”) still rely on mempools to store pending transactions waiting for validation from a node before it is committed to a block on the blockchain.
- Zk-rollups, in practice, must compress many layer-2 transactions at a time to pay for the layer-1 gas and it takes additional time for gathering enough layer-2 transactions, computing a validity proof, and archiving transactions (see here). Currently, the complex mathematics of ZK validity proofs create massive computational overhead (latency, GPU hardware, electricity costs) for block producers to create zk-proofs.
- Optimistic roll ups offer increases in efficiency, but the withdrawal period for assets is far longer than that of ZK-Rollups. Withdrawing an asset from an optimistic rollup can take several days to allow for dispute resolution to accommodate the fraud proving scheme.
Putting end users at the center
By introducing high performance microchains, we believe that Linera establishes a new and necessary evolution. The Linera network aims to enable most account-based operations to be confirmed and finalized in a fraction of a second, reducing block latency and ultimately making web3 applications more responsive.
Linera’s design principle is user-centricity. Linera puts users at the center of the protocol by allowing them to manage the production of blocks in their own chains — called microchains — for optimal performance. When extending their own chains, users submit new blocks directly to validators using a low-latency, mempool-free protocol inspired by reliable broadcast.
Users get their own lightweight chains, which integrate into browser extensions or mobile devices for streamlined web3 app interactions within their wallets.
Linera produces a much more expansive design space for new applications in web3 built around user-specific microchains, on-demand ephemeral chains, private chains, public microchains and others progressively more advanced as applications require more complex interactions between users. Only public microchains necessitate a full BFT consensus protocol.
Web2 performance and reliability for web3
Linera follows a peer-to-peer architecture similar to the server vs client-side architecture of internet protocols. Blockchain clients communicate directly with validators to submit and confirm new account operations. Microchains communicate efficiently with each other using asynchronous messages by leveraging the internal network of each validator. Validator can add and remove capacity (aka internal workers) at any time to maintain nominal performance for multi-chain applications.
During times of high demand, Linera’s validators expand dynamically like elastic web services. The number of microchains possible in the Linera system is virtually unlimited. This capacity for linear scaling is a paradigm shift comparable to the evolution of databases from SQL to NoSQL and will likely become necessary for future decentralized systems to provide low-latency guarantees at arbitrary scale. Ultimately, the benefit of Linera’s approach is ensuring performance predictability without giving up decentralization.
The Linera team is 12+ people strong and come from leading companies such as Meta, Google, Twitter, Zcash, Arweave, among others. CEO Mathieu Baudet has a PhD in cryptographic protocols and is a former Meta engineer, who helped develop LibraBFT (Diem), Novi (global digital wallet), and FastPay. Linera is rapidly growing their developer community and recently launched the Linera SDK, the Linera Developer School, and will launch the Linera testnet in Q1 2024.
Unlocking performance and responsiveness at scale will be a key for web3 to reach (and retain) billions of users around the world with decentralized applications and assets. We believe Linera’s network of microchains presents the critical breakthrough that can make the future of web3 real.
You can read more about their announcement on CoinDesk, Chainwire and the Linera blog.
