Original title: Ethereum layer2 breakthrough progress: what it means
Vitalik Buterin’s evaluation of the current Ethereum Layer 2 expansion strategy is that the initial deployment is “basically” successful, and the rest is the problem of refinement and deployment. In other words, he believes that the success of Layer 2 is basically a deterministic thing, rather than the previous exploration problem. (And just last year, the exploration of Layer 2 still faced great uncertainty, and even the failure of Plasma. You can refer to “The Fall of Plasma: Who Killed Plasma?” published by Blue Fox Notes before.)
Why is Ethereum Layer 2 close to success? Since entering 2020, Ethereum Layer 2 has made substantial breakthroughs. The most representative of these is the progress of Optimistic rollup and ZK rollup, which includes Synthetix using the Optimistic rollup scheme to build its exchange; Luyin uses Zk rollup to build a decentralized exchange; Fuel Lab also launched based on the Optimistic rollup scheme Reddit Cash can provide scalability for Reddit token transfers (for Reddit tokens, you can refer to the previous article “Reddit’s first token issuance: what does it mean for Ethereum?” in Blue Fox notes).
StarkEx has also done a simulation test recently. Through its ZK rollup technology, it has introduced an Ethereum mainnet account (including the initial balance) to more than 1.3 million users on the Reddit subversion r/FortNiteBR. The amortized price of each transfer is only 600 gas. During the move-in process, it did not take up too much network resources, and only used 2.5% of the network for 12 hours. If you do not use StarkEX, the entire process will take 4.5 days. StarkEX stated that they can not only be used to introduce Ethereum accounts to Reddit, but also to provide scalability for their transactions.
The advantage of using Rollup technology is that it can speed up the transfer rate, while reducing costs, and achieve a good user experience. Regarding Optimistic rollup and Zk rollup, they are not without shortcomings. For example, Optimistic rollup faces too long token withdrawal time and possible attack risk. You can refer to the previous article “Understanding ZK Rollup and Optimistic Rollup: Ethereum” Important directions for expansion.
In addition to the most exciting Rollup series, there are other Layer 2 also launched and made progress, such as Tether has integrated OMG network, Matic network has also been launched. In addition, there may be new programs on the road.
What does the breakthrough progress of Ethereum Layer 2 mean?
The basic success of Ethereum Layer 2 means that the Ethereum ecosystem has entered a scalable era. Recently, the cost of Ethereum is very high, and many high-frequency transaction users consume more Ethereum gas every day than the actual gas. Many crypto users still remember the past when the Crypto Cat congested Ethereum in 2017.
Without sharding and PoS, the current Ethereum is basically unable to carry an ecology. With the launch of various DeFi, games and other applications and protocols, even the development of stablecoins is enough to make Ethereum overwhelmed. Ethereum cannot support their fluency and low fees, which will definitely affect the subsequent development of these projects. .
Today, the development of Layer 2 can alleviate this situation. Not all transactions need to be completed on the Ethereum main network. Different projects can achieve a better experience on Layer 2. Of course, this is also a balance. Ethereum is gradually looking for a balance between decentralization, security, and performance. It builds a balanced ecosystem, rather than decentralization, security, and performance.
The basic success of Layer2 means that Ethereum can carry a greater ecology. The bottom of Ethereum will focus more on safe and high-value transactions, and projects based on Ethereum no longer need to worry about excessive fees and slow speed. This means that DeFi will be easier to reach the mainstream crowd. At the same time, today’s layer 2 can also be achieved without hosting, and to a certain extent, it can also ensure the safety of user assets.
At the same time, with the progress of PoS and sharding, the combination of layer 1 and layer 2 of Ethereum can basically meet the needs of most open finance and ordinary dApps. This means that Ethereum has the opportunity to become a settlement layer for multiple assets. Although many transactions will be transferred to layer 2, the security of its transactions still needs the final protection of Ethereum. As the ecology increases, ETH will not only reduce the value On the contrary, it will capture more and more value. With the implementation of EIP 1559, with the large-scale locking of PoS, and the continuous increase in the demand for ETH as the underlying mortgage asset, ETH and the Ethereum ecosystem will produce mutual push. Force. The magnitude of this power ultimately depends on the progress of various decentralized protocols and applications based on Ethereum.
With the advancement of DeFi, the future Ethereum ecosystem has the opportunity to become the core position of open finance. At the same time, Bitcoin, as the most valuable asset in the crypto world, will be gradually absorbed into the Ethereum ecosystem. As a metaphor, in the crypto world, Bitcoin is like the sun. It has the largest consensus, the most energy, and the highest value. Ethereum is more like a black hole. If the ecology of Ethereum can be built The ecology will tolerate everything, even the light cannot escape.
We can’t foresee how the future will evolve. But with so many talents exploring and working hard, the situation is opening up step by step.
From the perspective of Blue Fox notes, starting from DeFi in 2019, the crypto ecosystem has basically landed. With the breakthrough of Layer 2, and the maturity of PoS and sharding in the future, the crypto world will become a lush world, and it will eventually evolve. Unprecedented new situation.