What are Layer 2 Scaling Solutions For Ethereum?
- Layer 2 scaling solutions work as boosters for blockchains.
- Rollups make blockchain transactions 100 times faster.
What is the Ethereum Layer 2 Scaling Solution?
Layer 1 is the base blockchain, which is Ethereum and Bitcoin. They are the chains on which layer 2 scaling solutions are built. Layer 2 is the scaling solution that empowers the network, increasing its speed and efficiency.
Layer 1 of Ethereum includes things such as node operators, network block procedures, The blockchain, The consensus mechanism, and the various transaction data on the blockchain. Ethereum also works as the data availability layer for layer 2. And ultimately, after processing all the transactions. The data is posted on the Ethereum main blockchain, which is just layer 1.
What is the need for Layer 2?
There is a blockchain trilemma. The three aspects of this trilemma are scalability, decentralization, and security. If a blockchain focuses more on the first two factors, it will have to compromise on the third one. For example, if the blockchain focuses on high security, it will have to make the validation process really tough. This will affect the scalability of the blockchain, which means the transaction speed will be reduced significantly, and very few transactions will be able to be verified. Hence, the blockchain will have to compromise its scalability.
The main need for layer 2 scaling solutions is to deal with the scalability issue of the Ethereum network. Ethereum deals with a huge problem of scalability. The current transaction speed of Ethereum is limited to only 15 – 20 transactions per second, which is very low for such a network like Ethereum.
Currently, it proposes approximately 1 million transactions per day. Due to such high transaction density, users of the Ethereum network are bound to pay high transaction fees. Otherwise, all they can do is wait for the transaction to happen. Currently, it takes approximately 15 seconds to 5 minutes to process transactions.
The Solution to The Problem
Ethereum has found a permanent solution to this problem, which is called a shard. However, it is impossible for Ethereum to implement the solution instantly. Because it is a big change in the network. And can be introduced only after rigorous testing. Till now, the scaling solution for Ethereum has been rollups.
- Rollups
By using rollups, users can reduce gas fees by 100x as compared to layer 1. The basic function of rollups is that they bundle hundreds of transactions into a single transaction and then upload them on the Ethereum network. The rollups that work on Ethereum are mainly of two types
- Zero-knowledge rollups
They bundle the transactions into different batches. These transactions are further executed off-chain. The main reason for using zk-rollups is that they reduce network congestion on the blockchain. So that the main blockchain can function properly. These rollups are maintained by smart contracts, which are deployed on the Ethereum network. The main specialty of zk-rollups is that they submit a validity proof on the chain. Which ensures the security of the blockchain.
2. Optimistic Rollups
The concept behind optimistic rollups also involves processing transactions outside the Ethereum chain to reduce network congestion on the main chain. They automatically assume all transactions are valid.
