Ethereum creator Vitalik Buterin described in a blog post on Tuesday how the network is beginning to reach 1 million transactions per day. In his view, scaling the network is “the single most important key technical challenge” that developers need to work on before blockchain applications can be widely used.
As such, the subsidy programs are being launched to incentivize developers to implement two proposed solutions for scaling: sharding and layer-two protocols that would be built on top of the blockchain today.
Sharding is a process that requires only a few nodes on the blockchain to verify a transaction, instead of having every node do so. Currently, ether’s developers are finishing the specifications for their sharding protocol, and are looking for teams to build implementations and launch them on ethereum’s testnet.
Layer-two protocols, on the other hand, take a different approach by taking transactions off the main ethereum blockchain. The network would allow transactions to move on and off the blockchain in order to be processed, but would not be used to actually process the transactions.
According to the blog post, the subsidies for each program will range from $50,000 to $1 million and are intended to cover development costs. For both solutions, successful teams will also have a hand in implementing the protocols on ethereum’s mainnet as a next phase.
In addition to the research ethereum’s developers are performing, the foundation is looking for third parties to look into the scaling issues.
In his post, Buterin wrote:
“Independent teams of developers, companies and university and academic groups are all welcome to apply; we recognize that different types of applicants may require different formats and processes and we are willing to be flexible to accommodate individual teams’ needs.”