Just like how the 56Kbps dialup Internet in the 90s cannot possibly support 4K video streaming, the insucient scalability of today’s blockchain is the key factor limiting its use cases. Current blockchains have low throughput because each operation needs to be processed by the vast majority of nodes to reach on-chain consensus, which is exactly ”how to build a super slow distribution system”. Ironically, the on-chain consensus scheme also leads to poor privacy as any node can see the full transaction history of one another.
While new consensus algorithms keep getting proposed and developed, it is hard to free on-chain consensus from its fundamental limitations. O↵-chain scaling techniques allow mutually distrustful parties to execute a contract locally among themselves instead of on the global blockchain. Parties involved in the transaction maintain a multi-signature fraud-proof o↵-chain replicated state machine, and only resort to on-chain consensus when absolutely necessary (e.g., when two parties disagree on a state). O↵-chain scaling is the only way to support fully scale-out decentralized applications (”dApps”) with better privacy and no compromise on the trust and decentralization guarantees. It is the inflection point for blockchain mass adoption, and will be the engine behind all scalable dApps. Celer Network is an Internet-scale, trust-free, and privacy-preserving platform where everyone can quickly build, operate, and use highly scalable dApps. It is not a standalone blockchain but a networked system running on top of existing and future blockchains. It provides unprecedented performance and flexibility through innovation in o↵-chain scaling techniques and incentive-aligned cryptoeconomics.
Celer Network embraces a layered architecture with clean abstractions that enable rapid evolution of each individual component, including a generalized state channel and sidechain suite that supports fast and generic o↵-chain state transitions; a provably optimal value transfer routing mechanism that achieves an order of magnitude higher throughput compared to state-of-the-art solutions; a powerful development framework and runtime for o↵-chain applications; and a new cryptoeconomic model that provides network e↵ect, stable liquidity, and high availability for the o↵-chain ecosystem.CelerNetwork-Whitepaper