![]() By posting transaction data onto layer 1, rollups inherit the security of Ethereum. Rollup transactions get executed outside of layer 1 but the transaction data gets posted to layer 1. This distributes the L1 transaction fees across everyone in the rollup, making it cheaper for each user. Rollups bundle (or ’roll up’) hundreds of transactions into a single transaction on layer 1. ![]() By using rollups, users can reduce gas fees by up to 100x (opens in a new tab) ↗ compared to layer 1. Rollups are currently the preferred layer 2 solution for scaling Ethereum. By removing this transaction load from layer 1, the base layer becomes less congested, and everything becomes more scalable. Layer 2s take the transactional burden away from the layer 1 and post finalized proofs back to the layer 1. ![]() This lets layer 1 handle security, data availability, and decentralization, while layer 2s handles scaling. All this requires no changes to the layer 1 protocol (Ethereum). How does that work?Ī layer 2 blockchain regularly communicates with Ethereum (by submitting bundles of transactions) in order to ensure it has similar security and decentralization guarantees. A layer 2 is a separate blockchain that extends Ethereum. ![]() More on Ethereum's vision Benefits of layer 2Īs we mentioned above, Layer 2 is a collective term for Ethereum scaling solutions that handle transactions off Ethereum layer 1 while still taking advantage of the robust decentralized security of Ethereum layer 1. That is where layer 2 comes in to scale Ethereum today. When demand to use Ethereum is high, the network becomes congested, which increases transaction fees and prices out users who cannot afford those fees. Until sharding, Ethereum Mainnet (layer 1) is only able to process roughly 15 transactions per second (opens in a new tab) ↗. The Ethereum community has taken a strong stance that it would not throw out decentralization or security in order to scale. The main goal of scalability is to increase transaction speed (faster finality) and transaction throughput (higher transactions per second) without sacrificing decentralization or security. Therefore the need for scaling solutions has increased in demand as well. The success of Ethereum and the demand to use it has caused gas prices to rise substantially. Want a secure and decentralized blockchain? You need to sacrifice scalability.Įthereum has reached the network's current capacity with 1+ million transactions per day (opens in a new tab) ↗ and high demand for each of these transactions. The blockchain trilemma (opens in a new tab) ↗ states that a simple blockchain architecture can only achieve two out of three. Three desirable properties of a blockchain are that it is decentralized, secure, and scalable.
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