Laisha Wadhwa | OpenToWork Profile picture
Aug 15, 2022 15 tweets 5 min read Read on X
Gm Gm web3 fam!

Its Day 19 of #web3glossary 🚀🚀

S- Sidechain, smart contract, Sharding, sandwich attack

Sidechain is a parallel blockchain used to offload txns from the mainchain to increase scalability/add other functionality. They’re connected to their parent chain, via a two-way link that allows data & assets to be seamlessly transferred.
Interestingly, the assets are not actually transferred. They are simply locked on the mainnet while the equivalent amount is unlocked in the sidechain.

How does the validation of this imaginary transfer happen?🤔

via a smart contract
They ensure that foul play is minimized by..
..enforcing validators on the mainchain & sidechain to act honestly confirming cross-chain txns
Once a txn has happened, a smart contract will notify the mainnet - an event has happened. Next, the offchain process will relay the txn info to a smart contract on the sidechain..
..verifying the txn.

Post this, funds can be released on the sidechain, facilitating movement of digital assets across both blockchains.

📌This process can occur from the mainchain to the sidechain or vice versa.

eg. Bitcoin’s @Liquid_BTC and @RSKsmart
Sidechains help mainchains scale & become more interoperable.💯

Blockchains have been facing the classic ‘trilemma’ of simultaneously achieving scalability, security, and decentralisation since their inception. Adding more nodes helps decongest the blockchain network

BUT... 👀
What do we do about the reduced processing speed? That’s where sharding comes in.🧐

Sharding is a method of separating a network’s nodes out into smaller groups (shards) in an attempt to increase scalability.

Think of them as sub-chains.
Each shard is a mini-blockchain on its own with their own set of nodes and processing power. Thus, sharding helps reduce the required computing power as they’re able to reach consensus on behalf of the entire network, removing the need for every node to process every txn
How sharding works would be a deep dive. Let me know if you’d like to see a thread on that with some infographics🚀🚀

@DotParachains , @NEARProtocol , @eth2 use sharding
The whole idea of the #web3glossary series is to help demystify commonly used terminology and to help you better understand Web3. 😇😊
Let’s break down sandwich attacks in DeFi simple terms.
In a sandwich attack, a foul trader looks for pending txns on the network of their choice, say Ethereum
Sandwiching occurs by placing one order right before the trade and one right after it. The attacker front-runs and back-runs simultaneously, with the original pending... Image
.. txn sandwiched in between.

How is the victim affected?

Say Alex (victim) trades a crypto-currency asset X (ex: ETH) to another crypto-asset Y and makes a large purchase
A bot sniffs out this txn in the mempool and Front-Runs Alex by purchasing asset Y...
..before the large trade is approved.
This purchase raises the price of asset-Y for Alex & increases the slippage🤯

Due to this high purchase of asset Y, its price goes up, and Alex buys Y at at a higher price, post which the attacker sells at a higher price.
This type of attack is most common in DExs
and in most cases the attack depends on the slippage tolerance set by the victim

Protocols are trying to incorporate new technologies like ZK-Snarks to help users mask the trade information so that bots can’t identify it.

That's a wrap for Day 19!

I’ll be sharing information on the new vocabulary of the web for next 30 days.🚀

It’s like a free crash course on the terms and methodolgies in Web3.

📌Follow me @laishawadhwa for more such web3 gyaan!

📌RT the first tweet to share with the community

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More from @laishawadhwa

Sep 22, 2022
Whether its a brand fight b/w Pepsi & Coca Cola or Nike launching a new shoe collection, brands spend millions of $$ on marketing to win the battle. For brands to hold a prominent position in the eyes of their targeted audience, strategising is vital

Let me ask you question👇👇
How much does an Umbrella cost?
10$ - 12$ maybe

What's the function of an umbrella?
📌To Keep you dry when its raining

There’s a brand called Pasotti, whos’ umbrellas cost anywhere between 250$ - 800$
Obviously a more sturdy, luxurious umbrella, even opening it sounds good💯 Luxurious umbrella worth 375$
But, why would someone pay 500$ for an umbrella when the function is the same?🤔

When people are buying quality, they’re expecting something different. They take better care of it, and since they take better care of it, it lasts longer.
Read 5 tweets
Aug 26, 2022
Gm web3 fam!

Its finally day 26 of #web3glossary🚀
And with this, series has come to an end

Z: zk Rollups

By learning you'll teach and by teaching you’ll learn. Sharing on web3 terms & jargons for the last 1 month was a great learning experience for me and I hope for you too
Let's get to the thread now?

Having to spend $20 or more in gas fees for a single txn is not ideal if you want to complete a DeFi trade

If you've been hearing zk or zero knowledge, you're not alone. It's the next big thing in web3
With an increase in the number of Dapps, ...
there’s a need for faster processing speeds & cheaper txns.

That’s when layer 2 solutions came in.

Zk rollups are also a layer 2 scaling solution that increases throughput on Ethereum Mainnet by moving computation & state-storage off-chain

Read 14 tweets
Aug 23, 2022
Gm web3 fam!

Its Day 25 of #web3glossary

Decentralized networks can only provide 2 out of 3 benefits at any given time in terms of decentralization, security, & scalability Blockchain Trilemma

Let’s look at modular blockchains which aim at solving for scalability & flexibility
We’ll be comparing different modular blockchains today, but first

What’s modular blockchain?🧐
In monolithic blockchains such as bitcoin,Ethereum all the nodes & validators of the network are required to execute the same txns & do consensus on the chain

Modular blockchain..
..focuses on handling a select few duties (consensus, execution, Data availability & settlement) & outsourcing the rest to one or more separate layers

It’s just like separating a system into distinct components that can be combined in various ways to achieve specific objectives
Read 13 tweets
Aug 21, 2022
Hola folks 👋

Its Day 24 of #web3glossary 🚀🚀

Consensus mechanisms ensure that all the txns on the network are genuine & all participants agree on a consensus on the status of the ledger. PoS and PoW are the most commonly known.

Today we look at PoA, PoB, PoC and PoH

Need some background on consensus algos? Check out this thread on PoS vs PoW
Both PoS and PoW have their fair share of pros and cons, let's look at how other cosensus algos differ

PoA: Proof of Activity (not authority)
To verify participants blocks, it combines its tokens to allow both mining and staking. The blocks themselves do not contain transactions
Read 17 tweets
Aug 20, 2022
Gm Gm Web3 fam!

Its Day 23 of #web3glossary

W: WWW,Wrapped token,wei
Do you remember the first time you heard about Blockchain? Maybe you took it as a new technology that would change everything. Maybe you just wondered if you should start investing in crypto.
👀👇 were just getting your head around the concept of a decentralized web
The truth is web3 is indeed the decentralized internet of the future🚀

#web3glossary was started as a series of twitter threads to help people understand this space better and clear the air around...
.. the terms & jargons we hear around. We are almost at the end of the series and I would like to hear from you what value you gained from it and what more would you like to see😃
Until then, let’s get to today’s thread

Let’s go back to where it all started- the world wide web👇
Read 15 tweets
Aug 18, 2022
Gm gm folks 🫡

Its day 22 of #web3glossary 🚀🚀

V: Validators

Validators of blockchain technology aren't only its sower but its rewards reaper too. Let's get to the depth of it🧐

But first, here's some humor to start with
👇👇 Image
What are crypto validators and how do they work?
Crypto validators = Payment processors of the decentralized networks.
Technically, a crypto validator is a participant in a blockchain responsible for verifying txns.
After verifying the legitimacy of the txn, the validator adds.. to the distributed ledger.

Seems like the job of a blockchain validator is not that difficult!
You receive some data, check its accuracy, and validate it or not.
However, on a distributed ledger, it's easier said than done👀👀
Read 15 tweets

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