If you need a reason why Layer 2 is important, then Ethereum's ultimate congestion will be the most convincing answer to this question.
According to the latest data from bitinfocharts.com, Ethereum network fees have basically risen exponentially (in USD terms) in recent months. The most extreme example occurred on February 23, when the average transaction fee of the Ethereum network reached a historical high of $38.2, which means that investors will need to pay more than Hundreds of yuan-Ethereum DeFi is becoming the DeFi of the rich, which is obviously at odds with the idea of decentralization.
However, with the gradual advancement of Layer 2 technology, it has become a powerful tool to solve the congestion of the Ethereum network, and the performance problems of the Ethereum network are being resolved, and Layer 2 has also received high attention from the community.
secondary title
Most Noteworthy Layer 2 Projects
1）Optimism
Optimism is an OR implementation that has gained early traction among some of the big DeFi players, such as Synthetix. Optimism has built OVM, an L2-based EVM that enables projects to enjoy all the benefits of Ethereum’s L1 smart contracts on L2. Also, Optimism is already accelerating its mainnet launch (expected in March), so L2 is coming soon.
Currency issuance status: No currency has been issued yet.
2）zkSync
Created by MatterLabs, zkSync is a ZR-based L2 scaling solution that uses zero-knowledge proofs to provide high throughput and high security. Projects that have integrated zkSync include Gitcoin and Golem.
Currency issuance status: No currency has been issued yet.
3）StarkWare （StarkNet）
Zero-knowledge proof research organization StarkWare stated at the end of January that it will develop a Layer 2 expansion network based on the concept of ZK Rollup for Ethereum, named StarkNet, and at the same time disclosed a detailed roadmap, which will gradually realize decentralization in four steps to optimize and improve the application ecology.
In fact, StarkWare has launched a complete Layer 2 solution Volition (Validium) before, and has cooperated with multiple institutions to launch StarkEx technology specially used in exchange scenarios. dYdX, DeversiFi and Immutable are its partners.
Therefore, it can also be understood that StarkEx is just a specific application scenario of StarkNet, which is used by StarkWare to test the water. STARK-based Rollup technology can be used in complex transaction logic (spot, derivatives, NFT) and transfer scenarios.
Currency issuance status: No currency has been issued yet.
4）Offchain Labs （Arbitrum Rollup）
Offchain Labs, the development team of the Ethereum expansion program Arbitrum Rollup, has released more projects in its ecology. The first batch of applications include the centralized trading protocol Bancor, the decentralized auction tool Bounce.finance, the automatic market maker Burgerswap, Hop Protocol, decentralized Perpetual contract exchange MCDEX and decentralized exchange Swap.
In addition, the decentralized perpetual contract exchange MCDEX also wrote an article to explain why they chose Arbitrum Rollup. In their opinion, the Arbitrum solution has lower on-chain costs, higher technical maturity, and more developer-friendly.
secondary title
Layer 2 projects worthy of attention
1）Connext
Connext is a state channel project that strives not only to be Ethereum's L2 solution, but also to be the cross-chain routing center for Ethereum's many L2 solutions. One of the concerns in the early L2 space was that these projects would become too isolated from each other. Connext's new cross-L2 transfer system can prove that L2 isolation will not be a serious problem in the future.
The Vector (vector) technology developed by the Connext team, which has been conquering the state channel technology, is currently the most important solution in this field. By building a fast state channel between different Layer 2 networks, it can be quickly migrated at a very low cost Assets, improve the efficiency of the network.
At present, their instant layer-2 transfer application Vector has released version 0.1.0 on the Ethereum mainnet, and will then focus on promoting the adoption of layer-2 network applications. Former developers can integrate Vector into their applications or protocols to enable micropayments. According to Connext, this marks the beginning of Ethereum’s multi-chain ecosystem, where users can seamlessly interact with wallets and applications running on a variety of different Layer 2 networks and shards.
Currency issuance status: No currency has been issued yet.
2）xDai Chain
xDai Chain is an EVM-based sidechain designed to facilitate transactions in an extremely fast and stable manner. The project is backed by its pledged tokens, where consensus providers pledge code to secure sidechains. Due to its high efficiency, xDai Chain has grown in popularity in recent weeks.
xDai uses the PoS consensus to create the sidechain xDai Stable Chain, which provides 5-second block confirmation and an ultra-low transaction fee of $0.0002 per transaction.
Token Bridge is xDai's asset cross-chain protocol, which locks assets by creating multi-signature smart contracts on Ethereum. When assets are released, multi-signers sign through the transaction information on the side chain.
Currency issuance status: No currency has been issued yet.
3）POA Network
Like xDai Chain, POA Network is also an EVM-based sidechain that relies on a set of trusted validators to facilitate fast and cheap transactions. The solution can support anything from blockchain games to community currencies.
Coin issuance status: Coin issued.
4）Fuel
Fuel is the first implementation of OR (Optimism Rollup) to land on the Ethereum mainnet. The first version of Fuel's mainnet version will be launched on December 31, 2020. The biggest feature of this Layer 2 solution is ultra-fast and ultra-efficient tokens pay. In fact, the project aims to be a global value exchange layer.
Coin issuance status: Coin issued.
5）Loopring
Loopring was the first promotional project to be deployed on Ethereum and has been running on mainnet for over a year now. Loopring's ZR-based technology is currently focused on scaling decentralized exchanges (AMMs and order books), and payments. The technology is already available in Loopring version 3.6, on which the Loopring Exchange and Loopring Wallet are based.
Coin issuance status: Coin issued.
6）StarkEx
The working principle of StarkEx is somewhat similar to zkRollups, the main difference is that StarkEx’s Validium-based system handles off-chain data storage. This dynamic allows the project to have a higher throughput than a pure ZR system.
Currency issuance status: No currency has been issued yet.
7）Polygon（Matic）
Formerly known as Matic Network, it plans to become the first Layer 2 solution aggregator on the Ethereum chain, building a modular, universal, and flexible expansion framework for Ethereum. Polygon is defined as the first structured, easy-to-use Ethereum scaling and infrastructure development platform. Its core component is Polygon SDK, a modular and flexible development framework that supports the construction and connection of two mainstream expansion paths: Secured chains are two-layer chains, which can rely on the security of the Ethereum network and do not need to establish their own verification mechanism.
Matic uses off-chain operations of side chains to provide scalability solutions, while using Plasma and PoS mechanisms to ensure asset security. Matic is committed to becoming a platform that truly allows developers to deploy and run decentralized applications.
NEAR is a decentralized application platform that provides high enough security to help users manage high-value assets such as currency, identity or non-fungible tokens. At the same time, the performance of the platform is powerful enough to ensure that the above assets are available to everyday users, putting the power of the open web in the hands of users.
8）Near
NEAR is a decentralized application platform that provides high enough security to help users manage high-value assets such as currency, identity or non-fungible tokens. At the same time, the performance of the platform is powerful enough to ensure that the above assets are available to everyday users, putting the power of the open web in the hands of users.
NEAR Protocol aims to create a fully fragmented, scalable PoS blockchain, supports the Ethereum Virtual Machine, and also supports cross-chain interaction with Ethereum. The team has released some of the world's only implementations of large-scale sharding systems. At the same time, the team is redesigning every component of the protocol, from the network to the consensus, decomposing state and execution into a client-friendly way of working.
Coin issuance status: Coin issued.
9）Degate
DeGate is a decentralized transaction protocol based on the Ethereum Rollup two-layer network that is truly owned and controlled by DAO. The functional modules will include automated market maker transactions, order book transactions, leveraged spot transactions, cross-layer bridges, legal currency exchange channels, Initial token distribution platform. The L2 networks currently focused on are Optimism, Arbitrum, and zkSync, but others are not excluded.
The governance of the DeGate protocol consists of a two-tier DAO mechanism: Home DAO and Council DAO, where Home DAO is the direct owner and controller of the DeGate protocol and receives the income generated by the protocol; Council DAO is entrusted by Home DAO and is responsible for daily operation decisions and execute.
Currency issuance status: No currency has been issued yet.
10）everPay
everPay uses a brand-new storage computing paradigm, placing all calculation processes off-chain, and the storage consensus ensures the credibility of the ledger. everPay currently uses multi-signature contracts to lock assets across chains. When mint assets, you only need to transfer the tokens to the multi-sign contract. The agreement uses Ethereum as an oracle machine to obtain transaction information and perform asset mint; when assets are released, multi-signers need to obtain transaction information from Arweave, according to the everPay protocol. Rules for transaction verification, and finally release of signature assets.
With the storage and computing paradigm derived from Arweave, everPay can achieve real-time transactions and support tens of thousands of TPS; when transactions are packaged in batches, 1 US dollar can package millions of transactions, and the protocol can provide free transfers, and only need to pay ether when recharging and withdrawing Square miner fee.
Currency issuance status: No currency has been issued yet.
11）Celer
Similarly, Celer, a professional team that studies state channels, also said that it will launch similar products. In their 2021 roadmap, they stated that they will implement state channel technology that can increase liquidity between Layer 2.
Celer said that in the short and medium term, the Ethereum expansion plan Rollup is the best solution to increase the throughput of the chain before fragmentation. Extremely long latency and poor user experience, Celer plans to solve such challenges to achieve real-time and instant transactions across Rollups and between Rollups and the Layer 1 network.
Coin issuance status: Already issued.
Finally, at present, a variety of Layer 2 solutions have been gradually formed. In the foreseeable future, various new projects around the expansion of Ethereum are likely to explode. These projects work together to enable Ethereum to Process millions of transactions per second, not just dozens. It can be judged that the future Layer 2 solution will enable Ethereum to win the welcome and recognition of the global mainstream financial market, and the market value of Ethereum may be much higher than the current level.
