What is Layer 2 Scaling Solution in Ethereum ?
Understand about the scaling solutions of Ethereum which increase the speed and thought of the transactions.
Why do we need scalability in Ethereum ?
The main goal of scalability in the Eth is to increase transaction speed , throughput and decrease gas fee without sacrificing decentralization or security.
There are mainly 2 layers in the Ethereum blockchain in order to proceed with the transactions.
The layer 1 of Ethereum blockchain has high demand which leads to slower transactions and non-viable gas prices.
What are scaling solutions?
These solutions would help in achieving the scalability of Ethereum blockchain . The scaling solutions in the Ethereum are mainly divided into 2 types :
- On -chain scaling
- Off -chain scaling
What is On-chain(Layer 1) scaling solution?
This is a type of scaling which require changes to the Ethereum main protocol(Layer 1) . As it is the main focus for the scaling which require some major changes. In this type of scaling it uses the process of SHARDING .
Sharding process :-
It is a process of splitting a database horizontally to spread the load . In the Eth context , sharding will reduce network congestion and increases transaction per-sec by creating new chains known as "shards" . In this way the procedure takes place which we can say that has happened recently Ethereum merge.
What is Off-chain(Layer-2) scaling solution ?
It is a type of scaling which takes place on layer 2 that is implemented separately from layer 1 main-net and it require no changes to the existing Eth protocol .
It consists of 2 types of solutions . They are :-
The first type of solution in Off-chain scaling would derive their security directly from layer 1 . Some of them are Optimistic rollups, Zero-knowledge rollups and state channels .
The second type of solution in Off-chain scaling would involve in the creation of new chains in various forms that derive their security separately from main net . Some of them are sidechains , validium and plasma chains .
Rollup solutions :-
The rollup's is the first type of solution in off-chain scaling which provides scaling by building or rolling up Sidechain transactions into a single transaction and generating a cryptographic proof also known as Snark which is submitted to the base layer. With roll-ups, all transaction state and transaction execution are handled on the side chain, the base layer store transaction data only .
As the transaction data is included in layer 1 blocks, this allows rollup's to be secured by native Eth security .
There are 2 types of rollup's with different security models :-
Optimistic Rollup's :- It assumes that transactions are valid by default and only run computations via fraud proof. They reduce computations on the main net of Eth by processing transactions off-chain by offering significant improvements in processing speed.
Zero Knowledge Rollup's :- It processes transactions and performs computations in the off-chain and submits a validity proof by holding assets in an on-chain smart contract.
State Channels :-
It is also first type of solution in off-chain which utilize multi signature contracts to enable participants to transact quickly and freely off-chain ,then settle finality with main net . This will minimize network congestion and fees.
Side chains :-
It is a second type of solution which is an independent EVM-compatible blockchain. It runs in parallel to main-net which enhances and facilitates data processing from the main chain.
Contracts deployed to the Ethereum main layer can be directly deployed to the Ethereum side chain.
These are compatible with Eth via two way bridge and runs on their own chosen rules of consensus and block parameters.
Plasma and Validium chains :-
These are the other solutions of second type off-chain solution.
The plasma chain is a separate blockchain that is anchored to the main Eth chain and uses fraud proofs to arbitrate disputes.
The validium chain uses validity proofs like zero-knowledge rollup's but data is not stored on main net layer 1 . It could lead up to 10k transactions per-sec and can run multiple chains in parallel .
Conclusion:
Finally, We can say that both the solutions have their own merits and demerits which helps in the scalability of blockchain in a better way of utilization where On-chain is considered more as the long-term solution and Off-chain as a short term goal.
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