The Quai protocol achieves high transactional throughput by dividing transactional processing into independent shards. Each shard achieves shared total security via merged-mining. Adding more chains into the tree enables higher throughput, at the cost of increased cross-chain settlement times. Therefore, it is desirable for the network to activate only as few chains as are necessary to satisfy the users' demand for transactions.

As the number of transactions processed by the network increases, block propagation & processing time will increase (a.k.a. block acceptance time). This increase in block acceptance time results in higher probability of competing blocks produced within the same time, and thus short reorganizations (a.k.a. uncleed uncles) as the networks decides on the canonical set of blocks. Ultimately reaching a point where the network will expand.

QIP-8 defines the formula for creating new shards. The network maxes out at 16x16, but will be a 32 step process going from 1x1 > 1x2 > 2x2 > 2x3 > 3x3 and so on. This will be tested during the Golden Age and Quai might experiment with the constants to maximize performance.

The table below gives the tree ontology after the first few expansions.