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The congestion problem of Ethereum continues to be criticized, and it is imperative to expand capacity on top of Ethereum. This view has also been accepted by more and more people, and the Layer 2 solution came into being. In addition, the Layer 2 solution also has the ability to capture economic value and has the potential for sustainable development. In this roundtable, we invited guests who are deeply involved in the Layer2 field and top investors who have invested in the Layer2 track to discuss the feasibility of these solutions and the further development of Ethereum expansion.
The theme of this round table is "Layer 2 Eve", the guests are: Polygon co-founder Mihailo Bjelic, Celer Network co-founder Dong Mo, Matter Labs co-founder Alex Gluchowski, Hermez Network technical director Jordi Baylina, StarkWare co-founder Eli Ben - Yang Liu, partner at Sasson and Spark Digital Capital.
Polygon co-founder Mihailo Bjelic said: In the short term, Layer 2 is a good solution and has helped Ethereum release a lot of space and capacity. At present, 90% of transactions and token exchanges are carried out on Ethereum. If all transactions are transferred to layer 2, Ethereum may be more free. In the long run, EVM is already very promising. If L2 can solve the congestion problem, businesses and applications that are now forced to stop can be reopened, and the Ethereum ecosystem will be more prosperous.
Dong Mo, co-founder of Celer Network, said: We can’t put the cart before the horse, because the popularity of Layer 2 is isolated and we think it will make a breakthrough this summer. To figure out how to do a good job in Layer 2, we must first lay a solid foundation for the underlying work , the significance of Layer2 is to realize the expansion function that cannot be realized at the first layer. I believe that the future development will exceed people's expectations, but at this stage, various practical factors such as capital and efficiency still need to be considered. Technology cannot be achieved overnight. a process.
Alex Gluchowski, co-founder of Matter Labs, said: Layer 2 is indeed more efficient. While ensuring security and decentralization, it can transfer trust in the form of economic incentives. Solutions like ZK Rollup only need to achieve partial consensus. Unlike Layer1, which requires global trust. With the development of Layer 2, it is believed that more developers and users will enter the Ethereum ecosystem.
Jordi Baylina, technical director of Hermez Network, said that in the short term, Layer 2 is a good solution that can reduce costs, increase efficiency, and meet demand. At the same time, some solutions have emerged that can adapt to an environment that is basically compatible with the EVM (Ethereum Virtual Machine). Today, Ethereum is very congested, resulting in low availability of many applications. If Layer 2 develops further, the Ethereum ecosystem will be healthier and more prosperous.
Eli Ben-Sasson, co-founder of StarkWare, said that centralized technology has been applied for many years, and the development of blockchain is still in its early stages, so the new technology still needs time to improve and perfect, and some current minor problems will be solved in the future , such as Layer2 compatibility issues, when there is a real need, you can use different bridges to realize the connection, so that Layer1 and Layer2 can interact and bridge.
Yang Liu, partner of Spark Digital Capital, said: In fact, no solution can perfectly solve all pain points. For example, state channels are very suitable for processing small payments. The development of blockchain will be similar to that of the Internet. The Internet has been developed for decades, but the real golden period of development began ten years ago, and the application of technology takes time. Now the Layer 2 expansion plan is born. We believe that it can solve some of the limitations of people using the blockchain. In the future, there will naturally be more demands, and the plan will be further optimized. Now we are still at the beginning of an era.
The following is the transcript of this roundtable forum, organized by Odaily.
Molly (host): Regarding Layer 2, there are currently many different solutions. What are the differences and advantages among these solutions, and which type of Layer 2 solution is more optimistic?
Jordi Baylina：I think the most important feature of Layer 2 is that it allows transactions between different chains and different states. This process requires trust, and there is also a game. If you violate the rules of the game, you need to accept punishment. ZK Rollup is very different from other solutions. It puts all data on the chain and uses zk-snark for verification. Therefore, there is no need for a game, only to prove that it is valid.
Eli Ben-Sasson：We have made an information sharing graph, and the horizontal and vertical axes are cost and safety respectively. Sidechains, state channels, Plasma, ZK Rollup, and Optimistic Rollup have their own advantages and disadvantages. All data is more secure on the chain, and some data is cheaper off-chain. Therefore, each scheme has its own advantages and disadvantages. Features, different adaptability.
Alex Gluchowski：Agree that each scheme is very different. Our general assumption for the blockchain is that everyone is equal and everyone needs to verify, so you don’t need to confirm this transaction, because the protocol layer has already confirmed it, but The method is different on Layer 2. If you want to prove the validity of one part, you must also prove the validity of the other part. However, the situation is different after the appearance of ZK Rollup. It is only necessary to achieve a partial consensus. There is no longer an assumption of trust in it, and you can verify the validity of the transaction yourself, even through your mobile phone. Of course, at this stage, we still need to wait for the further maturity of the plan.
Mo Dong：Different solutions have different applicable scenarios. The state channel is designed to build a bridge between Layer1 and Layer2. Layer1 is only responsible for providing verification and does not require a waiting period. Therefore, it is more suitable for high-frequency and interactive scenarios and will give users a better experience, such as small amount Payment; Optimistic Rollup requires an interactive challenge period, which is not immediately verified for users; the block validity of ZK Rollup does not depend on the challenge period at all, but because zero-knowledge proof is difficult to be generalized, it is difficult It becomes a common EVM state machine; for the side chain, the security of the side chain and the main chain is separated, and the security of the side chain cannot be directly guaranteed through the main chain. In general, no solution is optimal, but from a practical point of view, I believe that these solutions will cooperate with each other in the future, and a synergistic platform will emerge.
Mihailo Bjelic：The previous guests spoke very well, especially its verification process, ensuring the data verification process from different aspects and methods, and also talked about different solutions. For example, for a state channel, its relationship can be bidirectional, and can also have parallel or multiple levels and situations to meet the needs of different users.
For the side chain that we talked about less, most people will classify it as one of the second-layer solutions. I don’t completely agree, because security must be considered while solving the problem. For the side chain, separate verification is required, which is different from the characteristics of a layer of security, which guarantees scalability but sacrifices security. So I look forward to seeing more hybrid solutions.
Yang Liu：Everyone’s point of view is almost covered. From my point of view, there is actually no perfect solution that can solve all pain points. State channels are already very good at handling small payments. Optimistic Rollup is my favorite solution because It can support EVM, which is more convenient and easier for developers to deploy their own smart contracts. Other solutions are not compatible with EVM, but are more suitable for high-frequency interaction.
Molly (Moderator): As our participants mentioned, layer 2 solutions are already available or coming soon, and we are just witnessing the eve of the boom in layer 2 solutions. So, what kind of drastic changes do you think will take place in the ETH ecosystem after the second layer solution is running smoothly and highly developed?
Jordi Baylina：In the short term, Layer 2 is a good solution and has helped Ethereum release a lot of space and capacity. At present, 90% of transactions and token exchanges are carried out on Ethereum. If all transactions are transferred to layer 2, Ethereum may be more free. In the long run, EVM is already very promising. If L2 can solve the congestion problem, businesses and applications that are now forced to stop can be restarted, and the Ethereum ecosystem will be more prosperous.
Eli Ben-Sasson：I agree with Jordi Baylina. At present, many operations are concentrated on Ethereum, but gas fees and congestion limit the development of the ecology. Once it is migrated to the second layer, Ethereum will be more free. If the first layer cannot be done, it can be moved here , without the limitation of high Gas Fee, more functional applications can be realized and expanded, such as games, and more and more complex product designs can be seen accordingly.
Alex Gluchowski：I very much agree with Eli and Jordi Baylina. After Layer 2 is widely used, lost users will return to Ethereum, and more new use cases will come to Ethereum, because on Layer 2, their costs are controllable. And there is more space. Just now everyone was talking about Gas Fee. If Layer 2 is more economical, more users will also come to Layer 2. However, after that, I believe that the cost of Rollup will also increase. One day in the future, the cost of Layer 2 and the transaction cost of Layer 1 may gradually be equal, and the payment cost of the side chain will also go through such a process. Therefore, in the future, it is necessary to further improve the scalability of the entire system, and realize it through a mixed combination of multiple solutions. I think there is no need to worry about different solutions being unable to communicate before, and they can be interoperable.
Mo Dong：Let me add one more point to the views of the previous guests. If you think in a reverse way, you will find that everyone expects that more solutions will be launched this summer, and they will focus on Layer 2, but I think it should return to reality. , can not put the cart before the horse. There is a saying called "We are all at the end of the beginning, not the last beginning", which means that we have to figure out how to do a good job on the second layer. First, we must lay a solid foundation, and then the entire ecology can further develop and prosper. The development of this field will exceed people's expectations. We have to consider different practical factors, such as capital, efficiency, etc., and how to achieve some expansion functions that cannot be realized on the first layer. I am very optimistic about the development of Layer2, but it is not something that can be achieved overnight when the popularity is high. It must be a process.
Mihailo Bjelic：I also very much agree with the speeches of the previous guests. Layer 2 is a solution to the scalability of Layer 1, and it has been gradually applied. But going from layer 1 to layer 2 requires a process. For example, many users of some DeFi products are on layer 1, and it will take a certain amount of time to migrate to layer 2. Therefore, in the initial stage of development, some large households need to complete the migration first.
In the long run, I am very optimistic about Layer 2, but I think our expectations are realistic. For example, we need Rollup, but we also need to consider its current maturity. The ideal state is that many people will use Layer 2 solutions in the future, but in reality it may take 3-4 years to complete the infrastructure construction.
Yang Liu：I want to talk about this matter from a different angle. The Internet has been developed for decades, but the real golden period of Internet development began ten years ago. At that time, we began to have smart phones and mobile Internet. . The blockchain has been through for a while, and when the Layer 2 solution matures and solves the restrictions on people using the blockchain, then we no longer need to explain to them why they have to pay a high Gas Fee, and there will naturally be many users And the program came out, I think it's the beginning of another era.
Molly: Thank you everyone. We have all seen that some applications on Ethereum have been migrated to other public chains. Other public chains do have their own very good advantages in terms of Gas costs and performance, such as BSC and Avalanche Protocol. So the question is, compared with Ethereum, does the rise of these new chains dilute the value of Ethereum and Ethereum Layer 2?
Jordi Baylina：It will take some time for a new batch of competing public chains to develop slowly, even if they copy Ethereum, which is why Ethereum is so widely used and trusted; on the other hand, the momentum of these new public chains is very strong, They are also engaged in healthy competition, and some chains may become more independent in the later stages of development. However, the above-mentioned public chain is different from our positioning. What we want to build is a decentralized layer-2 solution that is not controlled by a specific person or organization, and also retains the principle of decentralization of the layer-1 network. These key values should persist.
Eli Ben-Sasson：I agree with Jordi that the centralized approach has been used for many years and has its advantages and disadvantages. It is more efficient in a single case (the advantage is). Blockchain is a different idea - putting eggs in different baskets. Users will be more willing to put their keys and funds on a relatively centralized platform. Standardized traditional financial industry platforms naturally have their advantages. I think blockchain technology is in a completely different position and space. At the same time, our technology is definitely innovative and disruptive to the traditional financial and banking industries.
Alex Gluchowski：In the traditional financial system, take banks as an example. For example, in the United States, Switzerland, the European Union or Singapore, you must be a local resident and provide some documents to prove that you can open an account. This is a more centralized mode of operation. We believe that in the trend, centralization will transition to decentralization, and we also believe that its arrival will be faster than we hope, so we need to participate in its commercial design. For example, in 5-10 years, there will definitely be Such a system allows everyone to master their own authority and enjoy full rights and interests.
Mo Dong：I am more optimistic about decentralized public chains such as BSC and Heco. They are showing us the huge demand for open finance, and at the same time showing us what Layer 2 will look like in the future. At this stage, whether it is sufficiently decentralized is not the most important thing. I am more concerned about the huge demand in the future and the hidden service opportunities.
On the other hand, when it comes to the process of market education, many community users actually don’t know much about DeFi products, and they need to spend at least $300 in gas fees when they touch DeFi, so they have no chance to use it. But I think DeFi is a very good field of market education, allowing many new users to learn relevant knowledge and get first-hand information. At present, although some applications have been migrated, and some protocols will have some minor changes, we have not yet seen real innovation. Therefore, I am very much looking forward to seeing some innovations emerging and seamlessly embedded in Layer 2.
Mihailo Bjelic：Scalability solutions like Layer 2 are not yet that mature. We need to do a trade-off analysis between centralization, scalability, and cheapness. Of course, we agree that Layer 2 has a positive impact on the system. In this regard, it is also recommended that users try to use these solutions, self-educate and self-study, to weigh the pros and cons of different chains, and to have a clearer concept when choosing a solution in the future.
Yang Liu：From my point of view, I think the value of Ethereum in the future is huge. Especially after we let Ethereum 2.0, POS, Layer 2, etc. land one by one, the ills of the past transactions will no longer exist. After that, everyone will turn to consider some more interesting phenomena, such as security and decentralization. The greatest value of the blockchain is the developers and the entire ecosystem, so I still think Ethereum will be the leader.
Molly: There is a saying in the community that because different Layer 2 expansion schemes are not interoperable, as different DeFi applications choose different expansion schemes, Ethereum will be split. How do you comment on this statement? How should the intercommunication between different Layer 2 networks be finally resolved?
Jordi Baylina：This is very interesting. We have only recently used the Layer 2 solution, which was not available a year and a half ago, so it is still in its early stages. At the current stage, Layer 2 interworking makes sense for the ecosystem. In the early stage of Layer 2 development, everyone will focus on moving from layer 1 to layer 2, which contains different technologies. Many layer 2 solutions will become new hotspots after they appear, but for single-chain or multi-chain, at present, it is still relatively distant.
Eli Ben-Sasson：When it comes to the interaction topic of the 2-tier solution, I think that the 2-tier can be compatible, so I am not very worried. If the real demand arises, there will be different bridges to make the interaction easier and allow The different parts of the 1st floor are bridged interactively.
Mo Dong：We also see connections between different platforms, building bridges between them (such as Celer's cBridge). In fact, the design of computer science is like this. On the one hand, you need to have interoperability, and on the other hand, you need scalability. We also need to have liquidity on different chains. This is a very important part of interoperability, so I'm not too worried about the future of interoperability.
Alex Gluchowski：I would like to discuss the point of view on interoperability. I agree with the point of view just now that there will be synchronization of different channels in the future. Interoperability generally refers to transactions between two chains. It can be transferred to another chain, and the intercommunication of liquidity. However, there is not such a very complete interoperability among the different layers, so people may now look at other different solutions. I think there will definitely be some competition on the protocol side in the beginning, but eventually we'll have a few winners who are more mature. These large-scale chains or solutions should be relatively similar in terms of products and functions, and some of them will be better. Different products have different solutions, so that they can coexist and be interoperable with each other. .
Mihailo Bjelic：Regarding interoperability, we feel that there will be some different solutions, and there will still be many challenges in this regard. First of all, as Alex said, Ethereum usually needs to consider synchronization, etc. This part is a problem that needs to be solved, and some experiments are currently being carried out in this regard. Just like what Jordi said, we need to encourage innovation in this regard, and we need to let a hundred flowers bloom, so as to promote the development of the Ethereum expansion plan in a better direction. Here we need to consider solutions with different methods and protocols, so we need Encourage innovation, have confidence in the future, and believe that we can solve interoperability problems.
Yang Liu：As we said before, different types of scenarios or applications may require different solutions. I think it is a bit early to discuss this issue now, because there are still relatively few second-level solutions, and it may be possible in the future After more development, we will have some mixed solutions, and then we can consider more solutions.
