Token Scaling

Definition ∞ Token scaling refers to the process of adjusting the underlying representation or supply mechanisms of a digital token to accommodate increased transaction volume, user adoption, or network demands. This can involve implementing layer-2 solutions, sharding, or modifying the token’s economic parameters to maintain efficiency and low transaction costs. The objective is to ensure the token remains viable and performant as its usage expands. It addresses network congestion challenges.
Context ∞ The challenge of token scaling is a persistent theme in cryptocurrency news, as many blockchain networks struggle to process transactions efficiently at high demand. Solutions often involve protocol upgrades or the deployment of sidechains and rollups to offload computation from the main network. Successful token scaling is crucial for the widespread adoption of digital assets and decentralized applications, impacting network fees and user experience. This area is a primary focus for blockchain development teams.