Celer Network and Web3 Foundation are partnering to develop advanced layer-2 scalability on the Polkadot ecosystem.

Through this collaboration, Celer Network will build its advanced State Channel Network technology as a pallet and will consider using it as the foundation for a dedicated parachain enabling nearly instantaneous, low-cost and trust-free transactions. By utilising the Substrate blockchain framework, Celer will be able to leverage flexible and high-performance blockchain constructs, enabling efficient optimizations that significantly lower operational costs, improve performance, and permit new functionality not previously possible.

Web3 Foundation has selected Celer Network as a recipient of a Web3 Foundation Technical Grant and will offer technical resources to support a successful integration. Celer Network expects to deploy the initial integration within the next two quarters.

Boost an interoperable future with layer-2 scalability

Polkadot is a scalable sharded chain and the first protocol that provides a secure environment for cross-chain composability of multiple applications and protocols. Though this architecture significantly increases horizontal transactional capacity by distributing transactions across multiple parallel blockchains (“parachains”), these transactions can still be subject to high latency which can adversely affect user experience when interacting with blockchain applications.

Users are extremely sensitive to the latency of current Web 2.0 applications. Amazon found that for every 100ms of additional latency its shoppers experienced, the company lost 1% in sales. Google learned that a 0.5 second delay in rendering search results caused a 20% drop in traffic to landing pages. Recently, Google publicly disclosed that page speed is a ranking factor for both Google Search and ads algorithms.

In order for the Web 3.0 vision to reach mass adoption, it’s crucial that user experience not be compromised. The addition of lower-latency and lower-cost transaction functionality to Web 3.0 applications will enable the introduction of industry-changing applications that were simply not possible in the Web 2.0 era such as pay-per-use services with fine-grained and real-time micropayments.

Celer Network’s state channel technology allows parties to agree upon an application’s state simply through peer-to-peer communication and without requiring global consensus. Use of the underlying layer-1 blockchain is exceptional and limited to situations where a malicious party attempts to deviate from the agreed-upon protocol. This allows decentralized applications to achieve Web 2.0 like latencies while still ensuring low levels of trust.

Implementing this technology as a pallet will allow it to be leveraged by any developer using the Substrate blockchain framework permitting much higher levels of scalability and making mass adoption far easier to achieve. When implemented as a stand-alone parachain, Celer’s state channel network will allow for near-instant, high-frequency cross-chain asset transfers. By delivering a seamless and smooth user experience, Celer’s technology integration promises to provide foundational support to builders across the Web 3.0 ecosystem.

Enhance layer-2 platform with utmost flexibility and interoperability

Celer Network is a pioneer in the development of layer-2 scaling technologies. It launched the world’s first generalized state channel network in July 2019. This has now evolved into a unified platform implementing a range of different scaling technologies including generalized state channels, side chains and rollups. However, since this platform is implemented on top of a generic smart contract platform, it has some inherent limitations. The generality of such platforms lowers the level of cost-reducing and scalability-increasing optimizations that can be made at low-level. For example, it may take a smart contract platform an extremely high amount of processing power to bridge the data structure of the state proof compared to what would be required in a more flexible layer-1 platform. This leads to unnecessarily slow and costly user interactions.

Substrate is a blockchain framework developed by Parity Technologies for maximum flexibility and ease of development. By leveraging this framework, Celer can implement sophisticated optimizations that weren’t previously practical including data structure de/serialization, shared off-chain and on-chain data structures, flexible channel rebalancing and time-bounded state settlement storage. Such optimizations will allow Celer to build highly-optimized state channel infrastructure especially suited to mass adoption. Since all projects built with Substrate can easily deploy their custom blockchain as a shard of the Polkadot network and will also be able to leverage Celer’s state channel technology, this will give an unprecedented opportunity for Celer Network to expand into different applications built on the Polkadot ecosystem.