L2s, also known as Layer-2 solutions are designed to solve the scalability issues associated with current Layer-1 chains like Ethereum. Let us understand what this scalability issue is – Gyanlaksmi
Here is a brief thread on what are L2s in Blockchain 🧵🧵
L2s, also known as Layer-2 solutions are designed to solve the scalability issues associated with current Layer-1 chains like Ethereum. Let us understand what this scalability issue is 👇
As the number of users increases on the Ethereum chain, it becomes more expensive to transact on the chain, while ensuring decentralization and security. This is also popularly known as the Blockchain Trilemma. In order to solve these issues, we have layer-2 solutions.
Simply put: L2 takes some of the burdens away from the Mainnet when it comes to computation while still taking advantage of the robust decentralized security model of Mainnet. The important thing to note here: L2 is not a solution on its own – it still relies on Mainnet.
Let us try to decrypt “rollups”, which is one of the L2 solutions looking optimistic for the future(pun intended :P). What is a rollup?
What happens in this case, is that rollups can process more transactions in a batch and then send the batch data to Ethereum. Now the question of validity. How does Layer-1 know that the posted data is valid?
The general rollup process involves deploying smart contracts on layer-1 which would process deposits, withdrawals, and verifying proofs.
The type of proof mechanism differs from rollup to rollup. Optimistic rollups use something called Fraud Proofs and ZK-Rollups use a mechanism called Validity Proofs. More information about these two rollups would come in a few days post some more research and understanding.🤓
One last fun fact! Apparently, both types of rollups can scale up Eth txs from 15-45tps to about 1000-4000tps 😳! Also, a huge shoutout to @madhavanmalolan for putting together the Zk-Rollups study group :).