The Basic Idea

How can Facet be significantly cheaper than Ethereum without downsides? Where is this "free money" coming from? What is the catch?

Facet doesn't create "free money." Its benefits come from enabling you to stop wasting money on an unnecessary and costly Ethereum feature: Smart Contracts.

The core idea behind Facet is that anything on Ethereum that you can do with a Smart Contract you can also do without a Smart Contract at a fraction of the cost.

This is a counterintuitive idea. Smart Contracts are considered to be the feature above all others that makes Ethereum special, and yet Facet’s thesis is that Smart Contracts are Ethereum’s biggest design flaw.

Though Facet's thesis is counterintuitive, it is actually quite simple to understand why it is true.

The basic idea is this: if you have the power to predict, with certainty, how a smart contract will process a transaction, you don't need to rely on the smart contract actually processing the transaction—you can just use your prediction.

And it turns out that predicting smart contract behavior is much cheaper than executing smart contract logic under the Ethereum protocol. This is because only Ethereum validators can execute smart contract logic, whereas anyone can simulate contract behavior.

How then can we create a way for everyone to simulate smart contract behavior and use these simulations in place of the much more expensive smart contracts themselves? This is the goal of Facet.