Rollups are a type of Layer-2 scaling solution that increases Ethereum's throughput by performing transaction execution off-chain and posting transaction data on Layer-1. All of these Layer 2 projects are competing with one another to be the best network. . Optimistic Ethereum is a layer 2 scaling solution that enables anyone to execute any vision on an open-source protocol that will never be captured by private commercial interests. These solutions process transactions off-chain. Because there is a delay in Ethereum's transition to ETH 2.0, Polygon has grown to become one of the most popular Ethereum layer 2 solutions in the cryptocurrency space. Some of you may be confused and wondering just what the difference is between Ethereum 2.0 and a layer two solution for the platform. This is where Layer 2 solutions come into play in order to make Ethereum a competitive smart contract development platform today. The company claims that the platform's scalability and myriad offerings will benefit both gaming-experience creators and those who partake. The platform brings together all the best layer 2 solutions under one roof. The project has a market cap of around $857 million. Including Loopring, zkSync, Optimistic Ethereum, and Arbitrum. That is where layer 2 comes into play to scale Ethereum today. Demand to use Ethereum blockspace has exploded over the last year. When there is a high demand for Ethereum, the network becomes congested, which raises transaction fees. Another impressive feature of the platform is its support for sidechain aggregation, which is a type of technology that allows third parties to perform sidechain transactions. This proves early success of Ethereum Layer 2 protocols. Polygon was originally launched in 2017 as the Matic Network to create a protocol and . This is part two of a multi-part series exploring Ethereum scaling solutions. Layer 2 is a collective term for solutions that build on top of Layer 1, to improve the scalability of the Ethereum network. Importantly, this solution can reduce Bitcoin transaction time drastically. According to reports, Optimism can handle over 2k transactions per second while saving a lot of money on gas. According to Layer 2 data aggregator L2 Fees, arbitrum allows for 40,000 transactions per second, with gas fees ranging between $0.11- $0.18 for sending ETH and Swapping tokens. By using rollups, users can reduce gas fees by up to 100x compared to layer 1. It is intended to be a scaling solution for the Ethereum network. . Layer 2 is a term used for solutions created to help scale an application by processing transactions off of the Ethereum Mainnet (layer 1) while still maintaining the same security measures and decentralization as the mainnet. Arbitrum further allows developers to run unmodified EVM contracts and transactions without compromising on layer 1 security . Not quite yet, anyhow. Due to this, rollups inherit Ethereum's security properties and optimize for execution. Rollups can be segmented into two different types, optimistic rollups, and zk-rollups. Will Ethereum 2.0 Make Layer 2 Solutions Irrelevant? . Starkware's ZK Rollup solution can theoretically scale Ethereum for over 50 million users while keeping fees below $0.01. Polygon (formerly known as Matic Network) is a layer 2 (L2) scaling solution for Ethereum-enabled blockchain networks that enables fast, cost-effective and secure off-chain transactions for payments and general interaction with off-chain smart contracts. With that in mind, Optimism is a layer 2 solution for Ethereum. To make Ethereum's ecosystem more affordable for . Layer-2 solution works as a secondary framework that is built on top of an existing blockchain. The recent traction has led to Ethereum's transaction fees, i.e. While optimizing Ethereum Mainnet, these layer 2 solutions do not require any changes in the base; rather, they stay and work on the Ethereum network as smart contracts. MeticsDao is a layer 2 scaling solution that solves the six problems of Ethereum: Simplicity, speed, storage, scalability, security, savings. Ethereum News; Funding Alerts; GameFi; Hacks & scams; Industry Watch; Layer 1; Layer 2; Learn . On the bright side, this shows that Ethereum's young base layer is extremely useful and . Therefore, each project offers different features to stand out from the others. All this requires no changes to the layer 1 protocol (Ethereum). Polygon is the 14th-largest coin by market cap, and it's probably one of the best known layer-2 solutions. Popular examples of Ethereum layer 2 . Plasma solutions use intelligent contracts and Merkle trees to construct an infinite number of child chains that are effectively miniature replicas of the Ethereum network. It is the largest layer 2 project in the world for Ethereum, and its importance has grown tremendously just during 2021. Unlike Ethereum, which is limited to 13-17 transactions per second (TPS), Polygon can execute up to 7,000 TPS, making it comparable to Visa. Layer-1 refers to the base level of the blockchains underlying infrastructure. State channels. However, they all have one similar . Best known are the Lightning network on Bitcoin and Ethereum scaling solutions such as Optimism, Arbitrum, Starkware & Polygon. Layer 2 is an umbrella term to describe solutions that build on top of layer 1 to improve the scalability of the Ethereum network. It's one of the most popular Layer 2 projects aiming to create "Ethereum's Internet of Blockchains." Another critical highlight of Arbitrum as one of the best Ethereum layer 2 solutions is the support for sidechain aggregation of transactions, also referred to as the rollup technology. Ethereum's co-founder and most prominent voice, Vitalik Buterin, has noted its shortcomings in regard to mass adoption as a Layer 1, largely due to its gas fees, and he put forward EIP-4488 last November to address gas fees even on existing Layer 2 scaling solutions.. Layer 2s are likely to form the bulk of Ethereum scaling solutions, at least in the short and medium term. Share this article Categories Analysis Tags Cryptocurrency Ethereum OMG OMGX is a Layer 2 platform that supports Ethereum Virtual Machine (EVM) compatible smart contracts, token staking and streamlined cross-chain liquidity. Immutable X is a layer 2 scaling solution for trading NFTs on the Ethereum network. L2 solutions have different functions, like scaling payments, off-chain computation, or smart contracts. Layer 2 solutions, built on the Ethereum MainNet (L1), collect transaction data and periodically send data bundles back to layer 1 for storage and verification. Ethereum Layer 2 Solutions. Developers are now able to deploy their smart contracts permissionlessly on StarkNet's testnet. Ethhubsays Plasma "is a framework for building. StarkNet is a permissionless decentralized ZK-rollup layer 2 solution for the Ethereum blockchain. One of the best layer 2 solutions, the lightning network, transfers transaction bundles from the root layer to the off-chain. . " Arbitrum is an L2 solution designed to boost the speed and scalability of Ethereum smart contracts while adding additional privacy features. It utilizes Starkware zk-rollups technology, processing up to 9,000 TPS for almost zero gas fees. Layer 2s are game-changers for transaction-intensive applications like payments, Defi yield farming, minting NFTs, and smart contracts.Drawbacks In The Scaling Of Layer 2 -L2 scaling has the issue of preventing interoperability across different sidechains. Layer 2 solutions increase throughput (transaction speed) and reduce gas fees. Additionally, layer 2 can interact with the main . There are a number of layer 2 solutions on Ethereum. Let's dive in! Ethereum Layer Two Solutions Vs. Ethereum 2.0. Optimism on its official website claimed that it has helped developers and investors save $1 billion in gas charges during the last year. The Plasma layer-2 scaling solution was proposed by Joseph Poon and Vitalik Buterin in their paper Plasma: Scalable Autonomous Smart Contracts. A layer 2 blockchain regularly communicates with Ethereum (by submitting bundles of transactions) in order to ensure it has similar security and decentralization guarantees. Layer two scaling solutions promise to bring scalability to Ethereum before the launch of ETH 2.0. Transaction volume at Arbitrum has increased by 54.7% month-over-month, while TVL has increased by 2% ($979 million). Most important of all, the different notable entries in the list of partners of Arbitrum include Chainlink, Graph Protocol, OKEx, and many others. Its rollup solution allows developers to run applications, process transactions, and store data on a layer above blockchains like Ethereum. OMG Network is one of the most promising layer 2 scaling solutions for the Ethereum chain. The most popular Ethereum layer 2 project using a state channel solution is the Raiden Network . Layer 2 solutions increase throughput (transaction speed) and reduce gas fees. For reference, Visa often settles $2 trillion per quarter. Ethereum 2.0 is regarded as the long-term solution that can bring speed, efficiency, and scalability to the Ethereum network . The trickiness resides in the inescapable lack of nuance behind every solution's promise to be trustless, secure, economical and easy to use. Hybrid solutions Issues to Consider Ethereum Layer 2 scaling solutions need nuance. The Ethereum Layer-2 scaling ecosystem has become tricky to navigate for builders as an increasing number of scaling solutions have seen the light of day. OMG Network is one of the most promising layer 2 scaling solutions for the Ethereum chain. ($884.6M) in September, making it one of the best-performing protocols. Launched in January 2021 Optimism is one of the best Ethereum layer 2 solutions. The more of us on L2 the better the sandbox becomes. The post The best Ethereum Layer 2 scaling solutions to buy right now appeared first on Coin Journal. These networks can process and finalize transactions on its own blockchain. The throughput of this scaling solution ranges from 200 to 20,000 TPS. It can execute more than 2,000 transactions per second at a very low gas fee. It exists on the Ethereum network as a smart contract and does not need changes to the base level protocol to interact. Interestingly, Cartesi addresses the scalability and high transaction charges rather than just the issue.. Similar to a perfect game of Tetris where all shapes have a use-case, Ethereum's scaling technologies are bringing the network closer to becoming the default . The solution to this network congestion problem is simplelayer It exists on the Ethereum network as a smart contract and does not need changes to the base level protocol to interact. The best part about Polygon, however, is that it has already been released and is actually being used by end users. Let that settle in for a moment. The leading community for cryptocurrency news, discussion, and analysis. It is currently the leading L2 scaling solution with $2.62B in TVL and controls the L2 market share of 43.45%. This improvement is vast and represents relief from the main Ethereum chain. Layer 2 create a channel to communicate between networks for exchanging data and tokens. The Metis project integrates the Decentralized Autonomous Company (DAC) in its Layer 2 infrastructure, making it easy for any developer, builder, or community leader to build apps and their communities. On the other hand, layer-2 refers to a network built on top of a layer-1 blockchain. This article will discuss what Layer 2 solutions are and look at some of the best Ethereum Layer 2 scaling projects currently building on Ethereum. forbitswap -The future of finance is DeFi intelligence. The great thing about Polygon is that it's already used by many projects like Sushiswap, Aavegotchi, Chain Games, Quickswap etc. At the time of writing, OMG, its native token, was trading at $6.11. Despite the market's present slowdown, the Polygon network continues to develop at an exponential rate. As promising as Ethereum is in its potential to enable a decentralized . Layer 2 rollups are ready today! 3.8m members in the CryptoCurrency community. Plasma. At the time of writing, OMG, its native token, was trading at $6.11. Tokamak is the first Turing complete plasma protocol meaning it has all the functionalities of Ethereum's main chain. Layer 2 is a term used for solutions created to help scale an application by processing transactions off of the Ethereum Mainnet (layer 1) while still maintaining the same security measures and decentralization as the mainnet. The Alpha mainnet of Optimism went up in January 2021, and since then, it has had a tremendous amount of traffic. It exists on the Ethereum network as a smart contract and does not need changes to the base level protocol to interact. Arbitrum - cheaper and faster for smart contracts Traders and yield farmers are not the only users affected by high gas fees. Like with traditional computer networks, every blockchain protocol has a different capacity tolerance. L2 solutions have different functions, like scaling payments, off . Post navigation Loopring Loopring is an Ethereum layer 2 solution that utilizes zk-rollups to power decentralized trading and payment processing with high speed for extremely low fees. Basically, Ethereum 2.0 is an updated version of the software which is used for the current Ethereum blockchain. As a proof-of-stake (PoS) network to which Ethereum is transitioning soonPolygon relies on MATIC tokens to verify transactions. It also processes over 2.5 million transactions per day, so . Polygon is a layer 2 solution, what means that it runs in parallel to ethereum mainnet. Polygon You've probably heard about this one a lot in the last few days. William M. Peaster on 27 Jan 2021. The Layer 2 solutions fall into the following categories: Rollups-including ZK rollups and Optimistic rollups.