Home / Glossary / Sharding


Sharding is a pivotal scaling technique employed in distributed computing and blockchain systems to enhance efficiency and scalability. This method involves partitioning a network or database into smaller, independent subsets called “shards,” with each shard responsible for processing a specific portion of the network’s transactions or data.

How Sharding Works:

  1. Network Division: The blockchain or database is divided into multiple shards, each tasked with processing a designated set of transactions or data.
  2. Node Allocation: Nodes (computers or servers) are assigned to each shard to verify and manage transactions within that shard.
  3. Consensus Mechanism: Nodes within each shard use a consensus mechanism (e.g., Proof-of-Work or Proof-of-Stake) to maintain network integrity and transaction authenticity. Some transactions may require coordination between multiple shards, facilitated by techniques like state channels and side chains.

Sharding Techniques:

  1. Network Sharding: In this common technique, the blockchain network is partitioned into shards, each with its validators. These shards operate independently and in parallel with the main network, enhancing scalability. Example: Zilliqa.
  2. State Sharding: Focuses on partitioning the blockchain state into multiple states, reducing storage and computational demands on each node. Ethereum 2.0 utilizes state sharding.
  3. Transaction Sharding: Similar to network sharding but based on transaction types, where different shards process specific transaction categories.
  4. Hybrid Sharding: Combines multiple sharding techniques to optimize scalability and efficiency. Ethereum uses a hybrid of state and network sharding.

Benefits of Sharding:

  1. Scalability: Sharding significantly increases blockchain scalability by enabling parallel transaction processing.
  2. Storage Efficiency: Sharding reduces the storage burden on the main blockchain, benefiting blockchains with large user bases.
  3. Efficiency: It enhances network efficiency by distributing transaction processing across shards.
  4. Interoperability: Sharding’s flexibility allows customization to meet blockchain requirements.

Challenges of Sharding:

  1. Security: Shards pose security challenges, as compromising one shard can disrupt the entire network.
  2. Data Management: Ensuring each shard has access to required data sources is complex and requires monitoring.
  3. Communication: Coordinating transactions between shards may require external solutions like sidechains.

Related Terms

Zero Knowledge Proof

Zero-Knowledge Proof (ZKP): A cryptographic method allowing an entity to prove the truth of a statement without revealing any additional information.

Read More »


Year to Date (YTD) in the realm of cryptocurrency refers to a vital metric that assesses the performance of a digital asset within a specific calendar year, spanning from January 1st to the current date.

Read More »

Yield Farming

Yield Farming is an investment strategy in the realm of decentralized finance (DeFi) where cryptocurrency holders provide their assets to a DeFi protocol to earn returns, often in the form of additional tokens.

Read More »