A Scalable State Channel for IoT Smart-Contract Execution

Leonardo Mostarda
University of Perugia

Abstract
Blockchain technology was introduced to support cryptocurrency transactions without relying on a trusted third party. With smart contracts, blockchains evolved into platforms for decentralised applications, where mutually distrusting parties can execute shared logic and obtain verifiable results. However, smart-contract platforms still face major scalability limitations, such as low throughput, high latency, and transaction costs. These issues are particularly critical in Internet of Things scenarios, where devices continuously generate large volumes of data that may require near real-time processing. Executing all logic and storing all data on-chain is therefore impractical. Second-layer solutions address this problem by moving computation off-chain while using the blockchain only when necessary. State channels follow this approach: parties execute smart-contract logic off-chain and interact with the blockchain mainly for finalisation or dispute resolution. Nevertheless, existing state-channel protocols are not always suitable for IoT applications. Their execution models and dispute-resolution strategies may fail to accommodate the scalability and execution requirements of data-intensive IoT systems. This talk briefly reviews the state of the art and presents Dany, a patented scalable state-channel protocol for data-intensive smart-contract execution. Dany targets scenarios where trusted devices produce authenticated data streams and mutually distrusting processes execute smart-contract logic off-chain. The blockchain is used only as an adjudication layer.

Schedule
Tuesday 14/07/2026 11:00-13:00 – Aula II