Ethereum's Layer 2 ecosystem was almost non-existent a few years ago, but as of the end of last year, transactions in the largest L2 addresses had grown to nearly 5 million per day, a year-over-year increase. Increased by 400%. While the roots of some innovations remain debated, the origins of the L2 story can be traced back to one incident in December 2017. Cryptokitties, his first game based on NFTs, Ethereum's shiny new toy at the time, had just been released. And the cryptosphere went crazy about it. It crashed Ethereum, caused gas prices to skyrocket, and even made mainstream headlines. This was the first time Ethereum's notorious scalability challenges were exposed, but it wasn't the last.
CoinDesk reported in 2017 that developers were already aware of this issue, as “the solution requires extensive engineering work and is still unfinished,” and that Ethereum's proof-of-stake He referred to the “proposed amendments” that include the transition of That was a huge understatement. It will take another five years for Ethereum to finally switch to the new consensus model in September 2022.
Meanwhile, scalability challenges have attracted the attention of the blockchain research and development community, and layer 2 technologies focused on alleviating transaction congestion on the main chain have begun to emerge. Initially, this proved to be a trial-and-error process, with sidechain projects like Plasma falling by the wayside. But by 2020, a new kid appeared on the block (chain): rollup.
Rollups significantly reduce traffic by bundling transactions into groups and processing them as a single unit on the underlying main chain. They fall into his two categories: optimism and zero knowledge (ZK). Optimistic Rollup, the underlying technology platform such as Optimism and Arbitrum, uses a 'until proven guilty' approach to validating rollup data, assuming all off-chain transactions are valid unless otherwise indicated. Use a “not guilty” approach. This results in longer challenge periods and slower withdrawals.
ZK rollups, pioneered by projects like Starkware and Polygon, are considered secure, final, and efficient because they generate zero-knowledge validity proofs for each batch of transactions.
L2 Summer dawn
2023 will be a pivotal time for L2, with increased competition for users and developers across the currently thriving ecosystem. In the summer of 2023, exchange giant Coinbase launched its own Optimistic L2 platform as a challenger to established competitors Arbitrum and Optimism, while Coinbase's old rival Kraken is reportedly in talks with projects including Polygon to launch its own L2. platform. This isn't the first time we've leveraged Polygon's established tools and architecture. Manta Network announced last year that it was leveraging Polygon's modular open source development toolkit for developers on its proprietary ZK platform.
These developments, combined with a surge in user activity, provide a positive outlook for the Layer 2 ecosystem. However, there are still many questions about the future direction. Will this be a winner-take-all battle, with projects choosing sides between optimistic rollup solutions and zero-knowledge implementations, or will the ecosystem prefer to utilize multiple models? Is it likely?
There is also the issue of Ethereum's ongoing upgrade roadmap. Dunk sharding will eventually be implemented, increasing the scalability of the network to over 100,000 transactions per second. Even if Ethereum finally achieves true scalability, will L2 still be needed?
Vitalik Buterin of Ethereum's co-founder believes so. In a recent personal blog post, he observes that the L2 ecosystem is becoming more heterogeneous as more projects are attracted and efforts to differentiate for different audiences. , and we expect this trend to continue. He has also previously stated his belief that zk rollups may prove more realistic as a long-term solution than the optimistic ones, although the latter is more likely to be developed He admits that it is at an advanced stage.
In today's crowded market, it's difficult to judge, but tribal loyalties have always been deep within the cryptosphere, with both the Optimistic and ZK models receiving passionate supporters as well as fierce critics. There are some people. In any case, competition has proven to be the ideal stimulus for development and adoption, given the increasingly important role of L2 in driving behind-the-scenes demand for ETH. , it looks like L2 will play an important role in the upcoming bull market.
However, internal factors are also important. Vitalik's recent thoughts also allude to the fact that commission-free trading will become easier for a global audience of mainstream users, where the Web3 ecosystem has yet to achieve mass success. Is it just a passing observation? Or is it the next biggest milestone on the L2 development front? Watch this space.
