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Ethereum’s Use of Plasma Framework in Blockchain Technology and Why It Failed?

source-logo  cryptoknowmics.com 07 April 2021 00:23, UTC

Ethereum has held its high and mighty position as the second-largest cryptocurrency by market cap for as long as the community can remember. Officially launching its very own public blockchain in 2015, Ethereum became the concrete ground for leading Defi projects and Dapps in no time. To those who don’t know, Ether is the native currency that regulates the Ethereum network. 

Coming to the year that is marked in the history of cryptocurrency, by 2017 Ethereum blockchain became host to more users than its network was designed to handle efficiently. In the middle of a frenzy with debates over possible scaling solutions simmering across the globe, Ethereum announced its plans to use plasma framework in blockchain technology and the release of the version of Plasma paper. The Ethereum team hoped for the solution to handle almost all financial computation worldwide, as was written in the official document explaining the use of the framework. However, writing this in 2021, the solution clearly didn’t see the light of day. 

While Ethereum has surged quite magnificently in the past 6 months all the way until it broke the $2000 mark, the much-needed scaling solution, although officially in its early phases, is still a bit away from complete implementation. Where Ethereum 2.0 did take its sweet time to roll into its starting steps and establish the genesis block for the beacon chain, plasma has disappeared altogether when it comes to the future of Ethereum. It was a matter of discussion then, and even now, that led to the dismissal of the scaling solution that once claimed to match transactions on the Visa level. 

What Really Happened with Plasma? 

Taking a look back to the year 2017, Ethereum was in the limelight and its success was projected in the global exposure of Defi in the future along with countless possibilities that didn’t fail to meet the community’s high expectations. However, Ethereum wasn’t scaling. And right in the middle of all the stir, Vitalik Buterin with Joseph Poon introduced a paper that spoke about a layer-2 scalability solution known as Plasma.

As the vague specifications about the workings of Plasma were slowly released, the concept of ‘sidechain’ was introduced with a stripped-down version of plasma called Minimal Viable Plasma (MVP). However, the functionality of the sidechain required users to trust the operators of the sidechain to leave funds with while exiting the chain. Given that the basic idea behind the term ‘decentralized’ is to move away from having to trust intermediaries, Plasma was ideally built or actually promised to tackle that very issue. But where Plasma was outright confident in preventing the funds from being stolen in case of a lapse on the operator’s part, there were other problems with sidechains at the time that couldn’t be overlooked. 

What Was Wrong with Plasma?

While funds couldn’t be stolen, data unavailability was a prominent possibility at the hands of operators by not publishing the transaction data. Even though in this particular situation, users had the option to grab their funds and leave the chain altogether, but then participation in the network for the users would have become overly expensive while scrutinizing the transactions. 

And on top of everything that could wrong, even the exit from the plasma chain wasn’t as easy as seemed, given the challenge period that could delay a user’s exit by a week. The challenge period arises from the process that requires users to initiate an exit transaction to withdraw funds from the plasma chain, followed by a brief period of waiting time called the challenge period. However, the network allows any other user to challenge the existing user if they can provide proof for the exit to be invalid during the challenge period. 

Now, in a hypothetical situation, where the network saw all users exiting the plasma chain, the already congested Ethereum mainnet would suffer an extreme overload. Despite the very significant issues crowding the solution that was meant to solidify the security of Ethereum’s blockchain, it was drowned in the hype that took its native currency all the way over $1300 back in 2018. But when the bubble did crash taking the market down with it, a more clear picture surfaced, which made it impossible to ignore the drawbacks that followed Plasma MVP. 


While the currently phasing Ethereum 2.0 was nowhere in sight during that time, it wouldn’t have existed, if it weren’t for the dedicated efforts of Ethereum’s developers to improve the network’s efficiency with transactions and user experience while maintaining the sanctity of the network in terms of security. Before the roadmap of Ethereum’s transition from Proof of Work to Proof of Stake was even imagined, the research community of Ethereum was set on improving plasma that resulted in a new version called Plasma Cash. And not to get into the details of this version, but Plasma Cash while tackling some problems that came forth in its predecessor, brought a set of new issues that required users to be online often during their challenge period. 

However, the current situation of Ethereum’s network is completely different as the native currency ETH recently broke past $2000. The currency saw a massive bull ahead as Ethereum launched the deposit contract for staking ETH in November 2020, the completion of which successfully launched the beacon chain for Ethereum 2.0. While many think that Plasma was an epic fail on Ethereum’s part, but in reality, the network evolved into the ultimate scaling solution that is leading the way to Ethereum’s global success in the future.