Offchain processing involves executing transactions or computations outside the main blockchain network. This method aims to alleviate congestion and reduce transaction costs on the primary ledger by handling a significant portion of activity externally. Only the final results or aggregated data are then recorded on the main chain, preserving its security guarantees. Solutions like sidechains, state channels, and optimistic rollups utilize this approach to boost network throughput.
Context
Offchain processing remains a dominant theme in crypto news, with continuous reports on new Layer 2 solutions and their progress in scaling various blockchain platforms. Debates often concern the security assumptions and decentralization levels offered by different offchain mechanisms. The successful implementation of these technologies is seen as essential for mainstream adoption of decentralized applications.
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