BANKEX technical team developed the world first private blockchain that supports Plasma Protocol for public audit that will allow users to transfer different assets directly to each other leaving intermediaries behind and solving one of the most pressing problems of current crypto world — high gas consumption.

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One of the largest blockchain-platforms in the world ETHEREUM has several problems with throughput and increasing price of the smart contract. Briefly, the scalability problem is the following. While checking the transactions history of Ethereum, users are required to retain copies of the entire blockchain, a complete history of their transactions and all the calculations. For “supercomputer” it is not a problem, but most users likely will not be able to store this amount of data on their devices.

This August Vitalik Buterin and Joseph Poon have published a working draft on Plasma project: http://plasma.io/ which proposes to solve this issue. BANKEX team have found ideas stated there interesting and useful and started working on it. At ETHWaterloo hackathon in the middle of October BANKEX team has presented it’s groundwork at this field.

What is Plasma?

From the technical point of view, Plasma blockchain is just another blockchain, which can be efficiently settled on the parent Ethereum chain . It is well protected by the smart contracts on Ethereum from the misbehaviors of both Plasma operators and Plasma blockchain participants.

Plasma chain itself has very simple structure that allows undividable assets to be transferred in full from one owner to another. All transactions have inputs and outputs. There are few types of transactions which depend on the required function. For example, we propose type “Merge” to merge two inputs into one output to reduce number of UTXOs to follow by client. Full description will be given when design is more stable. All chain logic is made using Ethereum crypto primitives — sha3, secp256k1 and 65 byte signatures allowing use of ecrecover.

To allow the “master” contract on the main Ethereum network to do proper job, headers of blocks are submitted by operator with the following structure:

where ParentHash references previous block (by number), MerkleTreeRoot is root hash of a Merkle tree for all transactions in this block, NumberOfTransactions is total number of transactions in this Plasma block.

A header is submitted by Plasma network operator to the smart-contract on Ethereum chain. The blocks can only be sent one by one, in a sequence enforced by the contract. Any user of Ethereum network can deposit ETH to contract that will trigger and event and will allow Plasma network operator to make a funding transaction in Plasma chain. Then the users can make transactions freely in Plasma chain with headers being pushed to the parent contract on Ethereum.

When a user would like to settle one of his transactions in the main network, he/she can make a withdraw on Ethereum by providing a reference to the transaction. (in a form of BlockNumber, TxNumberInBlock, OutputNumberInTX), full transaction and Merkle proof will prove if this transaction is really included in the block. Parent contract checks a proof versus submitted root hash for this block and and if it passes, the withdraw process will start. The process can be finalized in 24 hours. There is a special kind of transaction in Plasma network that can accelerate the process by effectively burning the input (sending it to 0x0). If this block is not published by operator, withdraw can go as normal.

At ETHWaterloo BANKEX developers first created a Plasma-like platform in just 36-hours during hackathon ETHWaterloo. BANKEX team released a platform for smart asset creation and exchange using Plasma in a short period.

They solved the most pressing problem for crypto-community — optimizing the consumption of gas. Then, they continued working on it, and now we present the product, that is made for the first time in the world.

The code is available on BANKEX Github: