Blockchaininfrastructurehasevolvedtoencompassanecosystemoflayer-1andlayer-2networks.
Inthisarticlewe’llexplorethedifferencebetweenthetwo,andhowlayer-2networksandotherscalingmethodslikesidechainsattempttoaddressthescalabilitychallengesoflayer-1blockchains.
Whatarelayer-2networks?
Simplyput,layer-2networksareblockchainnetworksthatliveatopalayer-1networksuchasEthereum,withthelayer-1networkprovidingthebaselayerofinfrastructureandsecurityfornetworksbuildingonit,validatingtransactionsandachievingconsensus.
Thelayer-2networksuseavarietyoftechnologiestoaddressscalabilitybottlenecksonthelayer-1blockchain,whicharecausedbythroughputandtransactioncosts.
Ethereum,forexample,currentlyhandlesaround14transactionspersecond(TPS),perblockchainexplorerEtherscan.Visa,bycomparison,processesaround65,000transactionspersecond.
Scalabilityissuesaremostpronouncedduringperiodsofhighnetworkactivity,whenblockchainnetworksfaceincreasedtransactionfees(alsoknownasgasfees),alongwithnetworkcongestionandreducedtransactiontimes.
In2017,EthereumcreatorVitalikButerinidentifiedthe“scalabilitytrilemma”forblockchains,arguingthattheyfacethechallengeofprocessingthousandsoftransactionspersecondwhileremainingsecureandadheringtotheethosofbeingdecentralized,thatis,runwithouttheneedforcentralizedcontrol.
The\"scalabilitytrilemma.\"
Thetheory,importedfromcomputerscience,isthatanetworkcanonlyeverfocusontwooftheseprinciplesbymakingconcessionsattheexpenseofthethird.
Ethereum’ssolutiontotheproblemofscalabilityistofocusonmakingitsownlayer-1blockchainnetworkassecureanddecentralizedaspossible,whileoutsourcingscalingtolayer-2networksbuiltatopitsinfrastructure.
Howdoscalingnetworkswork?
Scalingnetworksdeployavarietyofdifferentsolutionstohelpaddressthescalabilitychallengesofthelayer-1network.
Thesenetworksincludebundlingtransactionsorprocessingtransactionsoff-chain,usingsidechainsorlayer-2rollups.
Sidechains
Sidechainsareblockchainsthatrunindependentlyofthelayer-1chain,withtheirownconsensusmechanismandtoken.
Theyconnecttothelayer-1blockchainbymeansofabridge,whichusesasmartcontractto“lock”assetsfromthelayer-1chainandmintamirrorimageofthosetokensonthesidechain,withthevalueofthosetokenspeggedtothelockedasset.
Thesemirroredtokensarethenusedtoperformtransactions,afterwhichtheycanbedestroyed,releasingthelockedtokensonthelayer-1chain.
Rollups
Rollupstakeadifferentapproach,byrollingup(hencethename)multipletransactions,presentingthemtothelayer-1blockchainasasingletransactionthatcanbeprocessedmuchmorequicklythantheindividualtransactions.
Therearetwomaintypesofrollups:optimisticrollupsandzero-knowledge(zk)rollups.
Optimisticrollupsassumethatalloftherolled-updataisvalid,allowingpeopletocontesttransactionsafterthefacttodeterminewhetherthey’relegitimateornot.Thecontestedtransactionissubmitteddirectlytothelayer-1networktosettlethedispute,withbothpartiesstandingtolosestakedtokensshouldtheybeprovedwrong.
Zero-knowledgerollupsemployzero-knowledgeproofs,acryptographictechniquethatcanbeusedtoprovethatsomethingisknownwithoutrevealingtheknowninformationdirectly.Transactionsarerolledupintobatchesthatareexecutedoff-chain,withthecompletedbatchsubmittedtothelayer-1chainusingazk-proofthatdemonstratestheproposedstatechangesarecorrect.
Ethereumscalersyouneedtoknow
Thereareanumberofdifferentlayer-2andsidechainnetworksbuildingatoporalongsideEthereum,eachwiththeirownpreferredtechnologicalsolutiontoscalethelayer-1.PerCoinGeckodata,thefollowingarethelargestEthereumchainsbytotalvaluelocked(TVL),asofNovember2024.
Base
IncubatedbycryptoexchangeCoinbase,BaseisbuiltatopEthereumscalingsolutionOptimism.Itquicklyestablisheditselfasaleadingplayerinthelayer-2spacefollowingitslaunchinAugust2023,surgingtooveronemillionaddressesinjust11days.AccordingtoCoinbaseCEOBrianArmstrong,theexchangehasnoplanstolaunchatokenforBase,andisattemptingtomakeBase“somethingthat’smuchbroader”thanaCoinbase-ledproject.
Arbitrum
CreatedbyOffchainLabs,ArbitrumleveragesoptimisticrollupstoscaleEthereum,withaclaimed40,000tpsversusEthereum’smorestately14tps.InMarch2023,ArbitrumlauncheditsnativeARBtokenforgovernance,handingcontroloftheprojectovertoadecentralizedautonomousorganization(DAO)madeupofcommunitymembers.
Polygon
FormerlyknownasMaticNetwork,Polygontakesamulti-prongedapproachtoscaling,deployingmultiplesolutionsincludingitsmainPOSChain(sidechain),Plasmachains,zk-rollupsandoptimisticrollups.Itaspirestobemorethanjustascalingsolution,billingitselfasaplatformforlaunchinginteroperableblockchains.InSeptember2024,itcompleteditsmigrationfromitsoriginalnativetokenMATICtoanewtoken,POL.
Optimism
LaunchedonmainnetinJanuary2021,Optimism—asitsnamesuggests—usesoptimisticrollups,whichassumethatalltransactionsintherolluparevalid.Optimismfurthercompressesthedatainitsrollupsusingasequencer,beforesubmittingtransactiondatatothemainEthereumchain.Validatorsforeachrolluparegivenaweektoquerytherollupiftheybelievethatitcontainsfraudulentdata.
Scroll
Arelativelynewentranttothelayer-2space,ScrolllaunchedonmainnetinOctober2023.TheplatformuseszkEVMtechnologytobatchproofs,leveraging“bytecode-levelcompatibility”withEthereumVirtualMachinesupporttoensurethatEVMapplicationsandtoolsarecompatible“out-of-the-box.”ScrolllauncheditsSCRtokeninanOctober2024airdrop.
Blast
LaunchedbyateamledbyTieshun\"Pacman\"Roquerre—founderofNFTmarketplaceBlur—inFebruary2024,Blastdifferentiatesitselffromotherlayer-2networkswithfeaturesincludingnativeyieldforETHandstablecoins.Thelayer-2conductedanairdropofitsnativetokenBLASTinJune2024
Thefutureoflayer-2networks
Layer-2networksformakeypartofEthereum’s“rollup-centricroadmap,”accordingtoEthereumco-founderVitalikButerin,whohopestouselayer-2solutionstoincreasetheblockchain’scapacitytohandleover100,000transactionspersecond.
ButerinhasoutlinedplanstoconvergeEthereum’stwoscalingstrategies,shardingandlayer-2protocols,inwhathedescribedas“TheSurge.”Thisroadmapwouldseelayer-2blockchainsimplementcryptographicsolutionssuchasSNARKs(SuccinctNon-interactiveArgumentofKnowledge)toensuretheintegrityoftransactions.Buterinalsoseekstoensurethatlayer-2networksinheritEthereum’scoreprinciplesoftrustlessness,openness,andcensorshipresistance.
Layer-2networksaren\'tjustconfinedtoEthereum.InJune2024,codersatBitcoinOSclaimedtohaveverifiedazk-proofontheBitcoinmainnetforthefirsttime,openingupthepossibilityofusingrollupstoscaleBitcoin.Solanaisalsoseeingincreasinglayer-2activity,suchasviathegaming-centricSonicSVMnetwork.
Meanwhile,newlayer-2networkscontinuetospringuponEthereum.InOctober2024,decentralizedexchangeUniswapannouncedplanstodevelopitsownlayer-2network,Unichain,usingOptimismtechnology,pluscentralizedexchangeKrakenwilllaunchitsownOptimism-basedlayer-2calledInk.
EditedbyAndrewHayward
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