This blog was originally posted  on March 6, 2018. We have updated it to reflect the new company name and branding. Enjoy!

One of the first objections I receive when I speak about our vision to publish advertising performance metrics to the blockchain is what about the scale issue?

It’s a great question. Anyone who is familiar with programmatic knows that thousands of marketing events — bids, impressions, clicks, and conversions — happen each second. In stark contrast, the Ethereum blockchain only manages about 20 transactions per second.

Sounds like a problem, right?

Luckily, no problem is too big for our CTO Miguel Morales and his engineering team who are beyond excited to announce a successful implementation of the Plasma framework. The impact of Plasma is twofold:

  1. First, it allows us to exponentially increase our transaction processing speed
  2. Second, Plasma has built-in mechanics that protect against fraudulent attacks while maintaining the massive scale required for programmatic advertising

So What is Plasma?

Plasma is the brainchild of Ethereum founder Vitalik Buterin and Lightning Network co-author Joseph Poon, and was developed as an answer to Ethereum’s scaling problem.

Plasma allows for the creation of side chains that process transactions on top of the original root chain. This way, the root blockchain (in this case Ethereum) doesn’t carry the entire burden of processing thousands of transactions itself, but instead can effectively outsource these computations to a side chain.

If you parse through Poon and Buterin’s whitepaper on the subject, you’ll find they identify five key components of Plasma:

  1. An incentive layer for persistently computing contracts in an economically efficient manner
  2. A structure for arranging child chains in a tree format to maximize low-cost efficiency and net-settlement of transactions
  3. A MapReduce computing framework for constructing fraud proofs of state transitions within these nested chains to be compatible with the tree structure while reframing the state transitions to be highly scalable
  4. A consensus mechanism which is dependent upon the root blockchain
  5. And a bitmap-UTXO commitment structure for ensuring accurate state transitions off the root 3 blockchain while minimizing mass-exit costs

So in layman terms, what does all this mean?

A Scalable, Self-Grooming System


In order to best understand the organization and impact of Plasma, I’ve found it’s helpful to think about the structure of a tree. The Ethereum root chain is (you guessed it) the root and trunk of the tree. The Plasma side chains are the branches. These branches distribute the burden of processing most of the transactions amongst themselves, allowing the root chain to save space and increase its processing speed.

Each plasma side chain — each branch — is governed by the root chain. Through smart contracts, the root chain enforces how the side chain participants verify marketing events and reach consensus. This allows us to scale our system exponentially, but with minimized security risk.

“We knew that in order to solve programmatic’s biggest problems, we needed to dramatically enhance the scale of our system. Vitalik Buterin and Joseph Poon created an elegant solution for this that we were more than happy to adopt for our own business case.”
– Alexander Voloshko, Lead Protocol Developer at Lucidity

When security risks do present themselves — say in the form of a fraudulent attack on one of the plasma side chains — participants in the side chain can effectively kill the compromised chain and create another side chain free of fraud.

In the analogy of a tree, the branches are replaceable. A branch might sprout that later becomes infected by a parasite. And even though that branch may die, three new healthy branches will sprout in its place.

In the same way a tree is constantly growing, self-grooming, and removing threats, so too is the plasma framework able to continually scale while simultaneously protect against fraudulent attacks. The result is an incredibly flexible, scalable, secure, and stable system that befits the needs of programmatic advertising.

Join the Conversation

Find us on Telegram to contribute to industry discussion, take part in games and contests, and find out more about Lucidity. We look forward to seeing you there.