The blockchain world is constantly searching for the holy grail: a network that can handle massive transaction volumes without sacrificing security or decentralization. Enter Waterfall Network, a layer-1 protocol that’s made some pretty audacious claims regarding its scalability. Yet, does it really make all the promises it claims to? Let’s look into what Waterfall Network has to offer, and more importantly, if they really are the answer to the scalability riddle.

Waterfall Network utilizes a multi-rail methodology that distinctly differentiates it from other conventional blockchains. It uses a Directed Acyclic Graph (DAG) as its underlying ledger. Unlike conventional blockchains, Waterfall Network departs from the standard linear structure by leveraging a BlockDAG architecture. This unique architecture allows for ultra-high parallel processing providing for dramatically increased scalability. This major departure from the status quo is an effort to spearhead solutions to some of the key limitations of blockchain technology. The quagmire on transaction speeds often arises because each transaction requires a consensus on just one chain. The network separates concerns across two subsystems: the Shard Network and the Coordinating Network. This separation is meant to help maximize performance and address the challenges of building a large-scale, distributed system.

Understanding Waterfall Network's Architecture

Waterfall Network’s architecture is specifically built to address the scalability constraints that many blockchain networks face today. As one of the key challenges facing Distributed Ledger Technologies (DLTs), scalability has emerged as a buzzword across every industry. As the current generation can only handle 3 to 7 transactions per second, security becomes compromised and the network grows more centralized. Waterfall addresses this challenge by using a DAG topology. This underlying template arranges transactions into blocks, allowing for quicker verification and increasing overall scalability. The design of DAGchain also enhances scalability by allowing for parallel transaction processing. This is further multiplied because many transactions can be processed in parallel, greatly boosting the network’s transaction throughput.

The network’s validator framework is intended to allow for as many as 1.5 million lightweight nodes. This large limit on potential participants is to encourage inclusivity and diversity. In addition, this mechanism combats centralization, a frequent critique of numerous blockchain projects. Waterfall Network has minimal node requirements, only 2-core CPUs and 8GB of RAM. This is a pale shadow of the requirements of any serious high performance chain. This low barrier to entry is what centralizes the network, all while maintaining a facade of decentralization. It enables a larger and more diverse group of stakeholders to participate in the validation process.

Waterfall Network vs. the Competition: Scalability and Decentralization

Waterfall Network boasts some impressive performance numbers. In addition, the network hit a new all-time of 12,778 TPS on its mainnet. To put this into perspective, Ethereum’s max TPS is around 30 TPS. Waterfall's max TPS is reportedly 183x more than Ethereum's max TPS. Waterfall’s performance is impressive even compared to other layer-one blockchains. To be clear, xx network can achieve thousands of transactions per second, but Waterfall’s are impressive enough on their own. Performance-wise, the 3D-DAG architecture of the Waterfall Network surpasses all requirements of various DApps in the Web3 ecosystem. Even though it has a very high peak performance of $9.82 \times 10^{4}$ transactions per second (TPS).

One should look beyond the surface of these bold claims. Waterfall Network has already demonstrated its remarkable scalability, successfully processing more than 2 million transactions in a public test. Using raw TPS numbers to tell that story misses the full context. Network conditions during a vehicle’s test can be much different than the environment a user would experience. The decentralization v. security trade-off is important to keep in mind. The scalability, security and decentralization trilemma has been one of the greatest challenges of the industry. Getting to high TPS usually does so at the direct cost of one or both of the other two pillars.

Potential Drawbacks and Challenges

Even though Waterfall Network has an attractive vision, there are some key downsides and challenges to consider.

  • Validator Framework Limitations: Although Waterfall's validator framework supports up to 1.5 million participants, it is unclear how this will perform in practice. Managing such a large validator set could introduce complexities in consensus mechanisms.
  • Network Centralization: If a distributed system runs on a small number of servers, it is easier for a centralized party or parties to manipulate the system. Ensuring genuine decentralization with such a large validator set will be crucial.
  • Effort Estimation and User Story Implementation: In the context of software development, it can be challenging to assess the time and effort required to implement a user story, which may not be proportional to its size. This challenge could impact the development and maintenance of the Waterfall Network.

We’ll examine the claim that Waterfall Network is one of the three most decentralized Proof-of-Stake (PoS) networks. A high validator count is always a good indicator. Yet the distribution of stake and real-world validator participation in consensus are just as important.

The Bottom Line: A Promising Contender, But More Proof Needed

Waterfall Network has a fascinating, different take on the blockchain’s scalability conundrum. Its DAG-based architecture and high TPS boasts definitely make it one to watch. As the first EVM-identical network to outperform non-EVM projects like Solana and Aptos, Waterfall Network enables seamless integration with existing Ethereum-based applications and developers. As with any new technology, it should be subjected to the highest levels of testing and proven in real-world conditions.

If you would like to get more Web3 and innovation focused, then look out for Waterfall Network. Lots of exciting things to come on this platform—stay tuned! Keep in mind, no jargon, no gyaan—just straight up dope gems.