The Blockchain Trilemma refers to the conundrum that decentralized networks can only provide two of three benefits simultaneously concerning decentralization, security, and scalability. The blockchain design paradigm is shifting from a traditional monolithic design to modular architecture to break the blockchain trilemma.
The L1 Cardano blockchain suffers from performance and throughput issues because of the inherent difficulties in scaling a decentralized consensus protocol. The most practical way to address these issues is to develop general-purpose L2 solutions on top of Cardano. Rollups are general-purpose L2 solutions. There are two types of rollups, optimistic- and zk-rollups. Optimistic rollups assume all transactions to be valid by default, then they roll up transactions into batches & submit them to L1. The transaction can be challenged if fraud is suspected. In the event of a challenge, the optimistic rollup executes a fraud-proof. Like an optimistic rollup, a zk-rollup accumulates a set of transactions off-chain and periodically updates an on-chain rollup contract state to reflect the transactions that have occurred. Unlike an optimistic rollup, zk-rollups do not add a transaction to the rollup until the transaction has been checked and found to be valid. A sidechain, another type of scaling solution, is a blockchain that communicates with the L1 blockchain or “mainchain” via some type of cross-chain data transfer protocol.
Orbis is the first zk-rollup L2 solution for Cardano built to support decentralized finance (DeFi) applications and a thriving blockchain ecosystem. Transactions occur off-chain on the Orbis layer 2 and are bundled together into a single zk (zero-knowledge) proof which is submitted on-chain to the Cardano layer 1 and verified. This proof is a zk-SNARK. This proof provides mathematical and unfalsifiable proof that the transactions have happened on Orbis. Similar to Cardano, Orbis is built on an extended UTxO model. Orbis will be developed in a series of iterations, advancing Orbis from a centralized protocol running on a single machine to a distributed protocol with centralized governance, and finally to a decentralized protocol with decentralized governance.