NetDex employs a Layer 1 (L1) blockchain protocol to effectively address scalability concerns. A novel approach, the Directed Acyclic Graph (DAG), is utilized to tackle scalability issues in distributed ledger systems. The DAG's virtuous cycle enhances scalability as the network expands.

This model incorporates a form of sharding, dividing the validator set into groups. Validators are assigned to specific shards to process transactions for the accounts within their shard and update the ledger. For more details on validating, refer to Sections Validator Node Minimum Requirements.

In this model, the state (record of accounts and transactions) and transaction processing (achieving consensus and processing messages, if needed) are recorded on various nodes, rather than attempting to achieve global consensus.

Fantom has already adopted this model, and the NetDex network will provide an updated fork of Fantom, thereby leveraging the benefits of this approach. As more independent validators deploy to the NetDex blockchain over time, the network will become more secure and decentralized.

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