{"id":9366,"date":"2021-09-06T20:56:13","date_gmt":"2021-09-06T19:56:13","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=9366"},"modified":"2021-09-06T20:56:25","modified_gmt":"2021-09-06T19:56:25","slug":"1-billion-has-been-invested-in-ethereum-layer-2-scaling-solutions","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/1-billion-has-been-invested-in-ethereum-layer-2-scaling-solutions\/","title":{"rendered":"$1 billion has been invested in Ethereum Layer 2 Scaling Solutions"},"content":{"rendered":"\n
Second-layer scaling solutions are designed to help Ethereum <\/a>users deal with network congestion, and they're becoming increasingly popular.<\/h5>\n\n\n\n
\"$1<\/figure>\n\n\n\n

According to layer two ecosystem tracker L2Beat, second-layer scaling solutions designed to combat network congestion on Ethereum \r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>are flourishing, with over $1 billion locked up in scaling protocols.<\/p>\n\n\n\n

Crypto exchange dYdX is at the top of the list, with $285.6 million in the bank.<\/p>\n\n\n\n

Using a number of technologies, scaling solutions enable decentralized programs (dapps) to avoid network congestion. Layer two rollups, a form of scaling solution that sits atop the Ethereum blockchain, process a batch of transactions before submitting them to the main chain as a single transaction, are tracked by L2Beat.<\/p>\n\n\n\n

Different variants of rollups, including as Optimistic, Plasma, Validium, and ZK-rollups, bundle and verify these series of transactions in different ways; over half of the top ten protocols by value locked are based on ZK-rollups, with a total value locked of $547.56 million.<\/p>\n\n\n\n

The main distinction between different forms of rollups is whether they maintain data on-chain or off-chain, as well as whether they use Fraud Proofs (which present evidence that a block was inaccurate) or Validity Proofs (which present proof that a block was correct) (which present evidence that a block was correct).<\/p>\n\n\n\n

Validium employs validity proofs with data that is stored off-chain, whereas ZK-rollups use validity proofs with data that is stored on-chain. Meanwhile, optimistic rollups employ fraud proofs with data stored on-chain, whereas Plasma and State Pools use fraud proofs with data stored off-chain.<\/p>\n\n\n\n

Polygon, which the site's founders define as a proof of stake sidechain, is one scaling solution that L2Beat does not track (essentially a clone of the Ethereum <\/a>main chain, where assets can transactions are processed and moved, and can be called back to the main chain).<\/p>\n\n\n\n

Layer two, according to L2Beat, is \u201ca chain that derives its security entirely or partially from L1 Ethereum <\/a>so that users do not have to rely on the integrity of L2 validators for the security of their funds.\u201d<\/p>\n\n\n\n

The Ethereum network is transitioning to Ethereum 2.0, which will introduce a new consensus method called proof of stake as well as a new scalability mechanism called sharding. Sharding is the process of dividing huge volumes of data into smaller chunks.<\/p>\n\n\n\n

However, rollups as a scaling technique still have a place, with the Ethereum <\/a>network potentially being able to reach 100,000 transactions per second by combining sharding, rollups, and other scaling solutions.<\/p>\n","protected":false},"excerpt":{"rendered":"

Second-layer scaling solutions are designed to help Ethereum users deal with network congestion, and they’re becoming increasingly popular. According to layer two ecosystem tracker L2Beat, second-layer scaling solutions designed to combat network congestion on Ethereum are flourishing, with over $1 billion locked up in scaling protocols. Crypto exchange dYdX is at the top of the […]<\/p>\n","protected":false},"author":13,"featured_media":9367,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[202,128],"class_list":["post-9366","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-blockchain","tag-ethereum"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/09\/image-58.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/9366","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=9366"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/9366\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/9367"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=9366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=9366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=9366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}