A Definitive Guide to SKALE (SKL)

skale skl

One of the key issues surrounding some blockchain networks is network congestion. It occurs at the point in time when the number of transactions on the network exceeds its capacity.

Every network features its own maximum amount of transactions it can handle, referred to as transactions per second (TPS).

SKALE is a Layer-2 scaling, open-source solution. It is integrated into Ethereum. It lets users bypass the traffic congestion on the network through the usage of sidechains.

Today, we will go over SKALE, the SKALE token (SKL), and see what type of project it truly is.

What Is SKALE?

SKALE as a network is a representation of a solution for one of the key issues surrounding blockchain networks. This open-source solution tackles the issue of network congestion.

Congestion happens as a high volume of developers utilize a network to create decentralized applications (dApps) development.

SKALE’s elastic sidechains are used for the creation of dApps. Instead of them being directly made on top of the Ethereum mainnet, they are created on SKALE sidechains. These are powered by the SKALE token known as SKL.

This means that users can define specific sidechains and arrange an environment for the creation of the dApps. They can choose protocols, the size of the sidechains in use, virtual machine, parent blockchain. They can also choose security measurements. This results in a fully configurable Elastic Chain.


SKALE is a network originally launched in 2018. The project was started by the N.O.D.E. Foundation. Its whitepaper was published in 2020 when the project was able to launch in its first phase.

SKALE launched its first phase on June 30, 2022. This was followed by a Consensus Activate token sale, concluding in September 2020. It concluded with 4,000 participants across 90 countries.

The original version of the network was a demonstration of how applications of elastic sidechains could operate. However, it did not facilitate the process of transfers and did not have any staking functionality.

Mainnet Phase 2 launched on October 1, 2020, with support for delegation as well as staking, with 46 validator organizations.

Mainnet Phase 3 launched on December 1, 2020, and was the final phase of the mainnet launch. It concluded with the unlock of tokens which completed their Proof-of-Use period. This meant that the tokens became available through a variety of different cryptocurrency exchanges.

SKALE would then, over time, announce new features, such as crypto tokens and their connection to Ethereum.


The project was founded by Jack O’Holleran and Stan Kladko. Both of them had prior experience with blockchain technology as well as cryptography.

Jack O'Holleran had experience in machine learning (ML) and blockchain technology, alongside artificial intelligence (AI).

Stan Kladko, on the other hand, had experience in enterprise infrastructure technologies alongside cryptography. He is one of the core contributors to the Ethereum Foundation and even Ethereum research as a whole.

SKALE is governed by the SKALE DAO.


The project received financial support from Signia Venture Partners and Floodgate.

It also saw investments from Winklevoss Capital, Hashed, and Multicoin Capital since that point in time.

How Does SKALE Work?

SKALE features an architecture that supports an ever-expanding line of dApp-specific chains. This can make it a simple, cost-effective, and high-performance blockchain solution for those that aim to run Ethereum-compatible smart contracts.

The network’s use case is elastic sidechains for Ethereum, where SKALE is a sidechain set of networks. 

A sidechain is a side blockchain that connects to another blockchain, the primary blockchain, which in this case is Ethereum.

As such, SKALE aims to deliver Ethereum access to developers by enabling fee-less, subscription-based decentralized networks.

They are responsible for the provisioning and deployment of Ethereum Virtual Machine (EVM) compatible and storage-enabled blockchains. These are secure and feature high throughput. They can handle a lot of transactions per second (TPS) as a result.

What Makes SKALE Unique?

SKALE stands out since it reduces the operational costs surrounding dApps. This also fixes network congestion that occurs on top of Ethereum.

SKALE offers fast throughput for transactions as well when compared to natively operating them on top of Ethereum. It results in speeding up the procedure of verification.

The project enables higher storage capacity and creates a scalable environment where users are able to test new features. It also features Byzantine Fault Tolerance, an Asynchronous Protocol, Threshold Signatures, and Leaderless Consensus. There's also the SKALE Manager, which is the gateway to all other smart contracts in the ecosystem.

The SKALE protocol is a Proof of Stake (PoS) network as well and encourages solid behavior among the network members. As it's a PoS network,  miners do not need to contribute computational power to be in the network as a validator.

SKL Token

SKL is the native token behind the platform and has numerous use cases.

The network uses the pool validator model with node validators to ensure that small sets of nodes will not be compromised. Smaller sets are typically more likely to be corrupted.

As such, the network is secured by validator nodes that work on different assignments and are randomly assigned. Validator nodes, as such, need to stake a high amount of SKL tokens. They are kept on top of Ethereum with special smart contracts managed by the SKALE manager.

Smart contracts monitor and regulate inflation in the economy. They also distribute payments to validators monthly as an incentive for validating nodes and securing the network.

SKALE network SKL is an ERC-777 token, an Ethereum-based token standard backward compatible with the widely-used ERC-20 token standard.


SKALE network’s SKL is a token that has multiple use cases. 

It is a representation of a right to work in the network as a validator, or to stake as a delegator.

They can access a share of the resources through the deployment, or renting of a SKALE Chain.

Users pay SKALE in a subscription-based model and can rent resources such as computation, storage, or bandwidth. They pay for a pre-specified time frame in the form of a SKALE chain.

Validators can also stake SKL tokens into the network and gain the right to run nodes. They can even earn fees and tokens through inflation. Each delegator can delegate their tokens to validators and, in the process, earn rewards.


The SKALE (SKL) token distribution, based on the max supply, is allocated as follows:

  • 33% is allocated towards validator rewards.
  • 28.1% is intended for Delegator Allocation, including early supporters and public allocation.
  • 1.3% goes to the Ecosystem fund.
  • 4% goes to the Core Team Pool.
  • 7.7% goes to the Protocol Development Fund
  • 10% goes to SKALE production
  • 16% goes to the Broader Founding Team

What Wallet Supports SKALE?

SKL, as a cryptocurrency, supports the ERC-777 token standard. This essentially means that it is also compatible with any ERC-20 supporting wallet. The type of wallet that a user picks will depend on how much they need to store.

There are numerous hardware wallets. Some include Ledger or Trezor, that provide support for the SKL token, alongside providing cold, offline storage solutions, and backup.

Software wallets also support the token, such as MetaMask, Atomic Wallet, Trust Wallet, MyEtherWallet, and many others.

The Future of SKALE (SKL)

SKALE is a Proof of Stake (PoS) protocol that aims to scale dApps and transactions on the Ethereum network.

The Ethereum Network did make the switch to PoS as well through “The Merge” on September 15, 2022. However, there is still a high level of network congestion, and SKALE still remains relevant across the network. This provides a high level of efficiency and lets developers test, host, and create dApps in a highly scalable environment. 

(FAQs) Frequently Asked Questions

Can You Mine Skale?

SKALE tokens cannot be mined. The network does not rely on miners to validate transactions, as it relies on validator nodes that stake SKL tokens. It utilizes Proof of Stake (PoS) instead of Proof-of-Work (PoW).

Can I Stake SKALE?

Due to the fact that SKALE uses Proof of Stake (PoS), it can be staked. As a means of upgrading the level of security on the network, validators must stake a high amount of SKL tokens. Staked SKL is then kept on top of Ethereum in a special smart contract.

Who Created SKALE?

Jack O’Holleran and Stan Kladko were the founders of SKALE. The project was originally started by the N.O.D.E. Foundation. SKALE is governed by the SKALE Decentralized Autonomous Organization (DAO).

Does SKALE Have a Limited Supply?

SKALE does have a limited total supply. The limited supply aims to fill the role of being an anti-inflation mechanism. SKALE’s maximum supply is capped at 7,000,000,000 SKL tokens. 

Who Is Behind SKALE Crypto?

The people behind SKALE crypto include Jack O'Holleran and Stan Kladko. Both founders have decades of experience with technology and cryptocurrencies. As for governance, the project is governed by the SKALE DAO.

What Is SKALE Used for?

SKALE as a network enables dApps to deploy in a high-throughput and cost-effective environment utilizing independent blockchains. Developers can pay for the creation of these sidechains through the usage of the SKL token. SKL is the native utility token used across the broader SKALE network.

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