A new blockchain network says it serves as a much cheaper alternative to Ethereum, reducing costs for decentralized finance applications.
As reported by Cointelegraph, the transaction fees paid by Ethereum users have been hitting record highs recently, with congestion on the network taking the average fee at the start of September to as high as $15.
But Lightstreams says the same application on its blockchain can be executed for a fraction of a cent, and it is even offering 12 months of gas-free transactions to projects that make the switch.
An ongoing issue
A sizable number of DeFi protocols rely on Ethereum’s blockchain, despite the fact that it has been plagued with scalability issues. An upgrade that will increase the blockchain’s throughput is in the pipeline, but it has been repeatedly delayed. Phase 0 of Ethereum 2.0 is yet to launch, even though it was scheduled to be released in January 2020.
The team behind Lightstreams says solutions are urgently needed, as Ethereum 2.0 could still be one to two years away — with fears growing that the current levels of congestion risk stifling the growth of the DeFi industry.
Lightstreams’ blockchain has now been running for one year, and composability with Ethereum’s Virtual Machine means any Ethereum application can run seamlessly on the Lightstreams network. According to the team, a number of audits have been performed to verify the robustness of its infrastructure.
The company says its blockchain is 25 times faster, with transactions being settled almost instantly compared with a two-minute wait on Ethereum. Ease of use is also a priority. With Lightstreams’ gas relay service, users do not need to top up an account to begin using Lightstreams. Instead, decentralized applications have the option to pay transaction fees on behalf of their customers until they are ready to begin paying for use themselves.
Finally, the blockchain provides a “unique privacy layer” for DeFi applications so data can be exchanged securely and potentially monetized.
Leveling the playing field
Registered in Estonia, Lightstreams was incorporated in 2018. It could be argued that the company’s timing couldn’t have been better, as no one could have foreseen the extraordinary levels of growth that the DeFi sector would enjoy, nor the impact that this would have on the Ethereum network.
The company’s vision is to level the playing field in financial markets with peer-to-peer technology that promotes more democratized, fair, cost-effective products and services.
Lightstreams founder Michael Smolenski is an award-winning blockchain specialist who has ranked highly in contests held by ConsenSys, Santander and Citibank. Before his involvement in blockchain, he worked for Goldman Sachs as a software engineer and solutions architect, meaning he knows the financial services sector well.
The differences between performance on the Lightstreams and Ethereum blockchains can be stark, to say the least. While Ethereum can handle 24 transactions per second, Lightstreams can handle 600. Settlement times on the world’s second-biggest blockchain tend to take about a minute and a half, but they can be cleared on this new network in under three seconds. And then there are the costs: Ethereum has variable costs but a recent calculation suggested that while a complex transaction on Ethereum might cost $10.07, an identical one on Lightstreams would cost just $0.0008.
Lightstreams says the technology it is working on will mean all fungible tokens will be able to transfer between its blockchain and Ethereum. All of this has the potential to create a faster experience for users, in keeping with what customers expect in the 21st century.
The Lightstreams blockchain has been built using the Tendermint consensus for its proof-of-stake engine for fast finality and high transaction throughput.
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