Hierarchical Structure

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The Scaling Challenge

Traditional blockchains face an impossible choice: stay small and secure, or grow large and vulnerable. Quai’s hierarchical structure breaks this limitation. The Innovation: Imagine a tree where every branch processes transactions independently, but the trunk ensures all branches stay secure. That’s Quai’s hierarchical structure - multiple blockchain “branches” working in parallel while sharing the security of the entire “tree.”

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How It Works

Three Levels of Organization:

1. Prime Chain (The Trunk): Coordinates the entire network
2. Region Chains (Main Branches): Organize geographical areas
3. Zone Chains (Leaves): Process your actual transactions

The Key Breakthrough:

• Traditional sharding: Splits security (dangerous)
• Quai’s approach: Splits only workload (safe)

Each zone processes transactions independently while maintaining the full security of the entire network through merged mining.

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Why This Matters

For Users:

• 50,000+ TPS: Process more transactions than Visa
• Sub-penny fees: Sustainable even at massive scale
• 5-second blocks: Near-instant transaction confirmation
• Global scale: Ready for billions of users

For the Network:

• Unlimited growth: Add new zones as demand increases
• Maintained security: Every zone has full network protection
• Optimized performance: Miners self-organize for best efficiency

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The Security Innovation

Traditional Sharding Problem: When blockchains split into shards, each shard typically gets only a fraction of the security. A network with 10 shards might give each shard only 10% of total security - making them vulnerable to attacks. Quai’s Solution: Through merged mining, every transaction in every zone receives 100% of the network’s security. This maintains the full hash-based security guarantees while allowing unlimited parallel processing.

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Self-Optimizing Performance

The Latency Problem: Network latency - the time it takes for data to travel between nodes - is the primary bottleneck in blockchain performance. Quai’s Unique Solution: Miners naturally organize themselves for optimal performance because:

1. Higher latency = Lower profits (more uncle blocks)
2. Miners choose their zone based on best connection
3. Result: Geographic self-organization without central planning

The Math Behind the Improvement: This relationship is described by t = pnlog_m(n) where:

• t = time to propagation
• p = ping time between nodes
• n = number of nodes in the network
• m = average number of connected peers

Real-World Example:

• Bitcoin: 8 hops × 100ms ping = 800ms total propagation time
• Quai zones: 3 hops × 10ms ping = 30ms total propagation time
• Improvement: 25x faster data propagation

This self-organizing system creates naturally optimized regional networks without any central coordination.

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Parallel Processing Power

Think of Quai as a multi-core processor for blockchains. Each zone chain operates like an independent CPU core, processing transactions in parallel while staying perfectly synchronized. How Chains Work Together:

• Independent operation: Each zone produces blocks on its own schedule
• Perfect coordination: Hash linked references keep all chains in sync
• Atomic operations: Cross-chain transactions either complete fully or not at all

The Three-Tier Architecture:

Chain Type	Level in Hierarchy	% of Network Hashrate	Block Time†
Prime	1 (top)	100%	~20s
Region	2 (middle)	~33%	~10s
Zone	3 (bottom)	~11%	~5s

† Block production in Quai Network is a stochastic process, meaning that real-world block times will have minor variance. These times are calculated for a 2×2 network configuration (2 regions, 2 zones per region, 4 total zones).

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Starting Simple: Single Shard Launch

Why Start with One? Quai Network launches with a single zone chain because adding unnecessary shards would:

• Reduce aggregate security: Splitting hashrate when not needed
• Increase settlement times: More complexity without benefit
• Waste resources: Running infrastructure for unused capacity

Automatic Expansion Trigger: When sustained demand causes the uncle rate to exceed 20% for an extended period, the network automatically expands by adding new shards. This ensures optimal security and performance at every stage of growth.

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Prime Chain: The Global Coordinator

Purpose: Acts as the network’s backbone, ensuring all regions stay synchronized (when multiple exist)

• Security: Mined by 100% of network hashrate for maximum security
• Function: Pure coordination - no transactions or accounts
• Role: Becomes active when network expands beyond single shard

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Region Chains: Geographic Organization

Purpose: Organize zones within geographical areas for optimal performance (activated during expansion)

• Security: Each region gets ~1/N of total hashrate (where N = number of regions)
• Function: Coordinate zone chains within their region
• Activation: Created when network demand triggers expansion

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Zone Chains: Where Transactions Happen

Purpose: The actual workhorses - processing all user transactions

• Speed: 5-second average block times for near-instant confirmations
• Function: The only chains that store accounts and process transactions
• Initial state: Network launches with one zone chain
• Expansion: Additional zones added based on demand

Each zone operates as an independent execution thread. As the network grows, this creates a truly multithreaded blockchain environment.

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Cross-Chain Communication

The Innovation: Through coincident blocks, Quai creates natural bridges between all chains in the network. These hash linked references enable trustless cross-chain transactions without any additional infrastructure. How It Works:

• Automatic creation: Merged mining naturally produces these connections
• Zero overhead: No extra work required from miners
• Trustless transfers: Move assets between chains without intermediaries
• Atomic operations: Cross-chain transactions complete fully or not at all

This represents the first truly decentralized bridge between hash-based blockchains, enabling seamless interoperability across the entire network.