A New Approach! Restructuring the Incentive Mechanism and Introducing Dynamic Block Adjustment: Can L1 Blockchain Litheum’s New Strategy Break the “Trilemma”?

When it comes to the blockchain “trilemma,” most people are likely familiar with the concept. This dilemma refers to the fact that traditional blockchains cannot simultaneously achieve decentralization, security, and scalability; they can only maintain a balance or make trade-offs among these three aspects.

To address this challenge, developers have tried various methods. For example, some have attempted to abandon existing blockchain architectures in favor of DAG (Directed Acyclic Graph)-based data structures; others have sought to solve blockchain scalability issues by introducing sharding and Layer 2 solutions; and some have proposed modular blockchain solutions that decouple layers such as the DA layer and execution layer to improve network throughput.

However, Litheum, which recently announced its funding round, adopts a completely different approach. It claims to have built a “third-generation blockchain” aimed at breaking through the bottleneck of blockchain “high utilization.”

The Litheum team believes that in the traditional monolithic blockchain design, nodes typically compete for the right to produce blocks to earn incentives. In other words, the incentive system in traditional monolithic blockchains mainly covers the core process of block production, while other fundamental processes—such as wallet and on-chain data synchronization, and propagation efficiency between nodes—do not receive direct incentives. As a result, nodes naturally focus on improving their competitiveness in the block production process.

For example, the Bitcoin network uses a PoW mechanism, so nodes invest costs in powerful mining machines, while the Ethereum network uses a PoS mechanism, leading nodes to stake more $ETH to increase their chances of becoming block proposers.

However, investing in mining machines or staking does not directly improve the overall network’s performance or scalability, which the Litheum team identifies as a key reason for the scalability bottleneck in traditional blockchains.

Theoretically, if multiple miners or validators participate in a blockchain, due to the decentralized nature of operation, these miners or validators must redundantly execute the same transaction and store multiple distributed copies of data, which inevitably increases execution and storage costs.

According to Litheum, Bitcoin miners deploy billions of dollars in infrastructure annually, but the Bitcoin network can only process 300 million transactions per year. The infrastructure cost per transaction ranges from $10 to $100. In the Ethereum network, the infrastructure cost per transaction also exceeds $100. This means that the investment in blockchain infrastructure is not proportional to the scalability it delivers.

To solve the above problems, Litheum has taken a new path and proposed a novel solution.

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