Scaling Smart Contracts via Layer-2 Technologies: Some Empirical Evidence

【Author】 Cong, Lin William; Hui, Xiang; Tucker, Catherine; Zhou, Luofeng

【Source】MANAGEMENT SCIENCE

【影响因子】6.172

【Abstract】Blockchain-based smart contracts can potentially replace certain traditional contracts through decentralized enforcement and reduced transaction costs. However, scalability is a key bottleneck hindering their broader application and adoption, often leading to concentrated or exclusive networks. To avoid falling short of the original promise of the technology, firms actively explore "layer-2" methods for scaling. We provide some initial evidence on the economic implications of a layer-2 scaling solution, which moves information aggregation from on-chain to off-chain peer-to-peer networks. A parallel-system experiment allows clean identification because we observe the same unit in the treatment and control systems at the same time. We find that this scaling solution reduces operating costs by 76%, and importantly, leads to decentralization with lower market concentration and more participation, which in turn improves data accuracy. The findings provide insights on how blockchain and smart contracting technologies evolve toward achieving decentralized and scalable trust.

【Keywords】blockchain; information aggregation; oracle networks; scaling; smart contracts

【发表时间】2023 2023 SEP 13

【收录时间】2023-10-06

【文献类型】实证数据

【主题类别】

区块链技术-核心技术-智能合约