Layer 2 will save Ethereum and solve the problem of network congestion

Ethereum is the most useful of all cryptocurrencies right now: it adds value, it generates yield, it is used in DeFi applications, and more and more use cases emerge every week.

Ethereum also has a crazy roadmap for the rest of the year. From a supply perspective, ETH2 will allow users to stake their ETH and generate a "conservative" annual yield of 5-8%, possibly as high as 25%, locking it out of the liquid market. EIP-1559 will make ETH a deflationary asset, beating Bitcoin's fixed inflation rate.

From a demand perspective, through a series of initiatives such as the Berlin hard fork, Flashbots, and the launch of layer2 scaling solutions, gas costs have been kept under control.

Kakao's public chain platform Klaytn will upgrade the Cypress hard fork today: On March 31, the Korean technology giant Kakao's public blockchain platform Klaytn announced that it will upgrade the Cypress hard fork from 12:00 to 13:00 today (Beijing time). Fork upgrade. After the upgrade, it is expected that the Cypress Gas fee will be adjusted at the block height of 87091200 (estimated at 16:30-18:30 on April 3). [2022/3/31 14:28:56]

We know that Ethereum has been plagued by network congestion, which leads to high gas fees on the network.

This isn't the first time this has happened in a bull market. In 2017, the NFT application CryptoKitties and the ICO bubble also led to a crazy surge in the gas fee of Ethereum, which was as high as 500gwei for a period of time.

Layer 2 scaling solutions are already giving us some relief from these horrible gas fees - hopefully their rollout will solve network congestion forever.

Qtum founder: Qtum is developing zk-rollup layer2 solutions for GameFi, etc.: According to news on January 3, Qtum founder Patrick Dai said that Qtum is developing zk-rollup layer2 solutions for GameFi, SocialFi and Metaverse blockchain infrastructure plan. Zero-knowledge proof is one of the best scaling solutions to realize trustless Web3. Qtum TPS can reach 10,000, and the transaction fee can be 1-2 cents. [2022/1/3 8:21:32]

"layer2" refers to a set of solutions that plan to scale layer1 blockchains (in this case Ethereum - but any "core" blockchain is known as layer 1. For example, Bitcoin, Solana, etc. ), which is achieved by increasing the speed and throughput of the network.

These solutions are called layer 2 because they conceptually sit on top of the Ethereum network.

At a high level, these solutions look to offload transactions and network activity from Ethereum onto its L2 chain, and regularly communicate with L1 to coordinate state, funds, data, etc.

Argent will launch a Layer 2 version of the wallet: Jinse Finance reported that according to an official blog post, the smart contract wallet Argent is introducing Layer 2. Argent will likely support multiple L2s over time, starting with zk rollups for now. Argent's L2 wallet will start with the most important use cases for the masses. These use cases will continue to expand as L2 becomes more interoperable in the coming months. According to the blog post, Argent will be the first to release the upgraded L1 wallet. Then, an L2 wallet utilizing zk rollups will be launched this summer. [2021/3/13 18:40:51]

Users can think of it as a screening mechanism, Ethereum will only know the most important information in the L2 solution.

Interestingly, many of these solutions look a lot like standalone blockchains, "friendly" to the Ethereum platform and ecosystem - meaning, instead of stealing Ethereum's activities like other layer1 ones, they work with Ethereum Fang cooperates to process its transactions.

The Layer 2 test version of Miniswap "0 Gas second-level exchange" is open: According to official news, Miniswap, the Biying DeFi zone, opened the Layer 2 trial version based on the Ethereum Ropsten test network at 16:00 Beijing time. The number of participants in the test was close to 2,000 within 1 hour . At present, Miniswap has realized the 0 Gas second-level exchange of DEX.

It is reported that Miniswap is developing a "Derivative" smart contract language for DeFi and will introduce it into the Layer 2 network that supports ZK-rollup. Developers can carry out secondary development to solve the programmability problem of the ZK-rollup network and ecological scalability. Greatly improve. For details, please click the original link. [2021/1/13 16:04:48]

The problem with layer2 is that there are too many solutions - in an industry with extreme network effects, a cohesive L2 solution on top of Ethereum would honestly benefit immensely.

However, each chain has its own way of weighing technical solutions, and they are all vying to launch and win over dapps and users.

The Layer 2 scalability solution 2key.network was upgraded to V0.5, and the credit mining mechanism was started: The Layer 2 scalability solution 2key.network was upgraded to V0.5. 2key.network stated that the changes in the new version include the mechanism of starting credit mining (ReputationMining) 2KEY tokens, designing a new front-end, and integrating Kyber’s upgraded product Katalyst, etc.

As previously reported, 2key.netowork launched a blockchain-based application ZoomSmartSessions on the Zoom application market (Marketplace) in April this year. [2020/8/6]

Sidechains are essentially completely independent blockchains. However, they are a fork of Ethereum, so they are EVM compatible and can be quickly deployed with existing dapps running on Ethereum.

xDai is a blockchain designed to be used on Ethereum for fast and cheap payments.

Plasma is a framework for building applications on Ethereum. At a high level, Plasma allows for the creation of child chains, copies of Ethereum on another chain.

So instead of every transaction being processed on the Ethereum network, some transactions can be filtered and moved to multiple child chains - instead of every transaction being processed on the Ethereum network, and less frequently at a pre-determined cadence Perform reconciliation of funds and status.

Polygon/Matic is an example of a Plasma implementation, and they did a lot of work on GTM to win two big dapps: Curve and Aave.

In general, rollups are also sidechains that deploy new technical frameworks to scale and process transactions.

They bundle the transactions on their chain (called a "roll") and send them back to Ethereum L2 in a bundled state (called a proof, or more precisely a SNARK) - exposing only the most important information.

Vitalik Buterin is very supportive of rollups, and his blog post is "A Rollup-Centric Ethereum Roadmap".

Optimistic rollup is a type of rollup that allows compatibility with the Ethereum Virtual Machine (EVM), meaning that smart contracts deployed on Ethereum can be redeployed on L2 with relatively little additional technical improvement.

They are called "optimistic" rollups because they assume the proofs provided for each batch of transactions are valid.

Every 1-2 weeks, anyone can challenge the submitted evidence and claim they are a fraud. Therefore, Optimistic rollups have long rollups to ensure that fraud is detected before the batches are committed to Ethereum.

Optimism and Arbitrum are two leading optimistic rollup solutions - the former being integrated by two leading dapps: Uniswap and Synthetix.

Zero-knowledge rollup (ZK rollup) is different from Optimistic rollup because it does not have long on/off ramp times.

Instead, these proofs cryptographically ensure that the transaction is valid from the start by using zero-knowledge proofs — thus, eliminating the need for challenge periods to detect fraud.

In addition, ZK rollup is faster and more efficient than Optimistic rollup—zkSync’s zkPorter promises to handle 20K+ TPS, even faster than a centralized network like Visa.

ZK rollups have long been considered a compromise for Optimistic rollups, as the former does not support EVM compatibility—thus, there is a trade-off between ease of smart contract deployment and speed. However, zkSync 2.0 promises to be EVM compatible and will be trial run in August this year.

The winner of the L2 war must meet two conditions:

The technologies they use (e.g. child chains, Optimistic rollups, ZK rollups) will solve user problems that are currently prevalent in Ethereum L1

dapps and users of the platform create a network effect

Under the first condition, each L2 technology has various trade-offs - whether it is EVM compatibility, long time-to-market, transaction throughput, etc.

The most important things for current DeFi users when considering L2: Is it cheap to use? Can I move in and out of L2 easily and quickly? Are my favorite dapps out there? Is there enough liquidity? What else can I do with other L2s Composable interesting Defi stuff/interoperability?

The second condition may be a function of the first condition. For example, more dapps may choose to integrate with L2 with full EVM compatibility - meaning it is a simple deployment of existing L1 smart contracts onto the L2 network.

The second condition means that they need to invest a lot of energy to acquire users: not only from the perspective of product growth, but also from the perspective of cooperation and marketing.

A large number of dapps means a large number of users. A good liquidity mining program means having a large number of users. Given the current friction of moving funds onto L2, users will remain sticky to their L2 solutions (at least for now).

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