The SKALE Network is a custodial execution layer (Layer 2). Whereas non-custodial approaches use a system of fraud proofs to allow funds to move between chains, SKALE makes use of BLS signatures, deposit boxes within the Ethereum mainnet, and other mechanisms to allow for custodial ownership and use within the network (which allows it to leverage the security guarantees of the mainnet but gain the performance inherent in Layer 2).
The stake from the validators, the payments from developers, and the token inflation – all of it lives in the Ethereum mainnet and all of it is controlled by the smart contracts that run there that work in unison with each SKALE Node.
This approach is different from other Layer 2 models that attempt to use mainnet interactions to run verification and/or fraud proofs. SKALE uses the Ethereum mainnet for staking and for other mechanistic operations in a way that is better attuned for the creation of a robust and trustworthy Layer 2 network. SKALE will also support BLS Rollups for use cases that require full reliance on MainNet custody.