Trilemmas in Decentralized Computing

# Introduction

In this article, we discuss the decentralization, security and scalability tradeoffs among multiple technologies in the field of decentralized computing.

## The Blockchain Trilemma

Vitalik Buterin introduced the [blockchain scalability trilemma](https://vitalik.ca/general/2021/04/07/sharding.html). Generally speaking, the  trilemma says that simple blockchain architectures can only get two of the following three properties: decentralization, security and scalability.

* Scalability: High transactions per second (TPS)
* Decentralization: Anyone can participate in consensus, no small set of trusted parties
* Security: The chain can resist a large percentage of attackers (say > 33%)

![](https://i.imgur.com/PA9v1Oa.png)

Complex architectures like sharded blockchains (e.g. Eth 2.0) solve the blockchain trilemma and achieve all three properties simultaneously, but are difficult to implement.

## The Rollup Trilemma

Rollups are **stateful**, **transaction-based**, blockchain scaling solutions that provide the developer with the abstraction of a faster blockchain and are built on top of a given Layer 1. For instance, rollups can provide an EVM-compatible (or equivalent) smart contract execution environment.

There exist three types of rollups: optimistic rollups, zero-knowledge rollups and sidechains. Analogously to the blockchain trilemma, we introduce the rollup trilemma to evaluate tradeoffs between these different scalability architectures.

![](https://i.imgur.com/Zqf6mu0.png)

Sidechains are not usually considered to be rollups, but we do here for the sake of comparison. In this, `t-of-N` security means that at least `t` out of `N` nodes are needed to be honest to maintain the rollup security, and `1-of-N` is the special case `t = 1`. For optimistic rollups, settlement can take \~7 days due to the reliance on the optimistic mechanism (a dispute period + fraud proofs). Compute means the amount of total computation needed to process transactions. For zk-rollups this is high because proof generation for a given computation is on the order of 1000x more expensive than the computation itself.

## The Interoperability Trilemma

Arjun Bhuptani introduced the notion of an [interoperability trilemma](https://blog.connext.network/the-interoperability-trilemma-657c2cf69f17) for the field of blockchain bridges, considering security, extensibility and generalizability properties. Here we give a different take to the interoperability trilemma, now from the side of security, extensibility and **scalability**.

* Security: New trust assumptions introduced beyond that of the underlying blockchains
* Extensibility: Can the architecture be easily modified to integrate new blockchains?
* Speed: Cross-chain communication latency

![](https://i.imgur.com/On8JIw4.png)

Here "light-client-bridges" means relay-based bridges where the destination chain can verify through a proof that a sequence of blocks from the source chain is valid. This can be done through ZKPs (e.g. [zkRelay](https://ieeexplore-ieee-org.stanford.idm.oclc.org/stamp/stamp.jsp?tp=&arnumber=9229702)) or without them (e.g. [Rainbow](https://near.org/bridge/), [ETH-relay](https://ieeexplore-ieee-org.stanford.idm.oclc.org/stamp/stamp.jsp?tp=&arnumber=9284781)).

While most commercial bridges are PoS-bridges, not all PoS bridges are built the same. Some, like Axelar (and \[Endpoint + Nexus\]), have a decentralized, open-membership, validator set. Most however, run a centralized validator set (meaning `N` is small, and fixed) and some not even rely on cryptoeconomic incentives, but only on reputation, thus providing much lower security.

## The Computational Oracle Trilemma

Computational oracles are **stateless**, **event-driven**, blockchain scaling solutions that provide smart contracts with a way to outsource specific parts of a computation. For instance, computational oracles allow smart contracts to outsource heavy operations like running a decentralized AI model o

The Nexus Protocol

## Introduction

Ethereum has been referred to as a "world computer", a global, decentralized, general-purpose, shared-state machine. However, Ethereum and all other general-purpose blockchains provide a very isolated and computationally limited execution environment. In particular, blockchains are unable to carry out expensive computational tasks (e.g. run a deep neural network), and interoperate with external systems (e.g. connect to the Internet, react to off-chain events and interact with other blockchains).

[Nexus](https://www.nexusprotocol.io/) is a solution to both limitations and a challenge to the "blockchain as a world computer" paradigm. Nexus is a large-scale, general-purpose, Decentralized Cloud Computing Network. It enables blockchains to outsource computation and interoperate with external systems, like the Internet. It achieves this by introducing the first stateless, general-purpose, decentralized cloud computing platform powered by Multi-Party Computation (MPC) technology, allowing developers to program their own custom blockchain oracles.

By connecting blockchains to a programmable off-chain consensus engine, Nexus provides the missing piece of infrastructure needed to make blockchain applications interoperable with the outside world. From computational oracles, to machine learning oracles, to human identity oracles, to insurance oracles, to sports oracles, to gaming oracles, to cross-chain oracles, to zero-knowledge oracles, to reactive oracles, to market data oracles, to outbound oracles, to automation oracles, to randomness oracles, and more, developers can program and deploy arbitrary oracle applications on the Nexus Cloud and massively extend the computational and I/O capabilities of smart contracts.

## A New World Computer Architecture

In classic computer science, the Von Neumann architecture of a computer is formed of three components: a database, a CPU, and an I/O device. Blockchains have conventionally been regarded as “world computers”, but they should be seen as what they truly are: decentralized world *databases*. That is, blockchains form only the permanent storage component of a true world computer, but lack the computational and I/O capabilities of the whole computer model.

![](https://i.imgur.com/2s3zDK9.png)

In the Von Neumann architecture, Nexus completes this view by providing both the CPU and I/O  components of a true world computer. More specifically, while blockchains are stateful, transaction-driven, decentralized **world databases**, Nexus is a stateless, event-driven, general-purpose, I/O-enabled, decentralized **world CPU**. The Nexus Cloud is thus a general-purpose distributed computer system that provides blockchains with pure off-chain computational power through a generic off-chain consensus engine.

In composition with blockchains, Nexus thus provides developers with a new decentralized computing paradigm. Cryptocurrencies can be seen as the first phase in the evolution of decentralized computing, introducing the idea of distributed databases — a form of special-purpose distributed computers. Smart contracts correspond to the second phase, providing Turing-complete programmability on top of these databases. Decentralized cloud networks like Nexus, in composition with smart contracts, correspond to the third phase in the evolution of decentralized computing. Decentralized cloud networks provide blockchains with off-chain computational power and general consensus capabilities on off-chain data through a stateless, Turing-complete, off-chain computational platform: a true decentralized "world computer" paradigm.

## General-Purpose Decentralized Cloud Computing

![](https://i.imgur.com/HsPu0dS.png)

Unlike stateful systems like blockchains, Nexus is a stateless distributed computer system with the primary objective of carrying out pure computational and I/O tasks. There is no notion of blocks, ledgers, immutability, or transactions. Deterministic computations are executed in