Day147 — Ethereum layer 2 solution

Ethereum is the layer 1 blockchain. It can be scaled by offloading work to another layer.

Side chain are ethereum compatible independent blockchains with their own consensus model. It does not require any change to the base layer. Contract from layer 1 can be directly deployed to layer 2 without any change.

Even if ethereum 2.0 is online and the base layer is faster, it still needs layer 2 solution.

Scalability Trilemma

security <> scalability <> decentralization

Scaling solution

Channels. It allows two participant to exchange transactions as many as they want and only submit two transactions to the base layer for the result. But, participant has to know each other upfront and they have to lock up their funds.

Plasma. It can create an unlimited number of child chains, copies of the parent ethereum blockchain to offload the work from parent chain. But, the fund withdrawal time from layer 2 is long. OMG and Matic are the examples.

Rollups. It provides scaling by bundling sidechain transactions into a single transaction with a cyptographic proof. Only the proof is submitted to the base layer. ZK rollups and optimistic rollups are types of rollups