Scalable UTXO Smart Contracts via Fine-Grained Distributed State

TL;DR

This paper introduces a method to distribute UTXO smart contract state across multiple outputs, enabling smaller transactions, reduced fees, and parallel validation, thereby improving efficiency and scalability.

Contribution

It presents a novel approach to partitioning UTXO contract state, allowing for more scalable and parallelizable smart contract execution on blockchain platforms.

Findings

Reduced transaction size and fees

Enhanced parallel validation on multi-core CPUs

Empirical validation confirms efficiency improvements

Abstract

UTXO-based smart contract platforms face an efficiency bottleneck, in that any transaction sent to a contract must specify the entire updated contract state. This requirement becomes particularly burdensome when the contract state contains dynamic data structures, as needed in many use cases to track interactions between users and the contract. The problem is twofold: on the one hand, a large state in transactions implies a large transaction fee; on the other hand, a large centralized state is detrimental to the parallelization of transactions - a feature that is often cited as a key advantage of UTXO-based blockchains over account-based ones. We propose a technique to efficiently execute smart contracts on an extended UTXO blockchain, which allows the contract state to be distributed across multiple UTXOs. In this way, transactions only need to specify the part of the state they need to access, reducing their size (and fees). We show how to exploit our model to parallelize the validation of transactions on multi-core CPUs. We implement our technique and provide an empirical validation of its effectiveness.