Layer 2 is much faster than ETH2.0
IOSG Weekly Brief | Layer 2 is much faster than ETH2.0 # 49
Source: IOSG Ventures
With the DeFi boom, resources are tight on the Ethereum chain and Gas charges are at new highs. Ethereum is in desperate need of a breakthrough, but Ethereum 2.0 is still in its infancy and it's still a long way from being launched. Before Ethereum 2.0 comes online, a more realistic Layer 2 solution is expected to solve ethereum's capacity expansion problem.
Layer 2 solutions are constantly updating and iterating. Currently, the main two-layer hot-carrying solutions are: OMG, Plasma, Rollup (ZK Rollup and Optimistic Rollup) and Validium. Rollup appears to be the most likely option at this point, and ethereum Foundation and Vitalik themselves have publicly supported it. Let's take a chronological look at the three other L2 solutions currently on the market and compare how they differ from Rollup.
1. Plasma VS Rollup
Plasma, a project co-proposed by Vitalik Buterin and Joseph Poon in 2017, has been a source of high community expectations and is arguably a precursor to the expansion of Ethereum. OMG Network V1 became the first Plasma program to land. The current Beta will increase Ethereum TPS to between 4,000 and 9,000 transactions per second (theoretical 9000 per second) while reducing transaction costs to about one-third of current levels.
For greater scalability, Plasma migrates both computation and data storage to the subchain, and simply puts the results of the subchain processing on the ethereum main chain for validation and notarization, which greatly reduces the workload of the main chain.
Because a large number of smart contracts are removed from the backbone, if the backbone is only responsible for security issues such as node consensus building and transaction dispute resolution, the volume of transactions that can be accommodated on a blockchain is greatly increased, which can greatly expand the capacity of the Ethereum network.
Plasma is an unmanaged side chain, and if any error occurs in the Plasma chain, compared to a normal side chain, it can be detected, and the user can safely exit the Plasma chain, preventing an attacker from causing any lasting damage.
A year after Plasma's birth, a technology called Rollup surfaced. The biggest difference between the Rollup solution and Plasma solution is that while the Rollup solution puts transactional data on the chain, Plasma simply notarizes out-of-chain data on the ethereal chain, which leads to a usability problem, which makes Plasma a poor user experience and a real lack of trust.
So overall, the most critical aspect of Rollup's technology, compared with Plasma, is that it addresses the issue of data availability. All transaction data is on the Ethereum chain, and security can be at the same level as the main ethereum chain.
2. ZK Rollup VS Optimistic Rollup
Now the most popular Rollup expansion scheme has been repeatedly recognized by Vitalik Buterin as his favorite Layer 2 expansion scheme. Several branches have also been born based on the Rollup concept, the most mainstream being NBSP; ZK Rollup And & have spent Optimistic Rollup Two solutions. The main difference between them is that the former USES zero-knowledge proof and the latter USES fraud proof. On performance, zkRollup (here mainly refers to the zkSNARK, zkPlonk) support for universal intelligent contract is poorer, therefore only suitable for short-term tokens, transfer, which is very suitable for the decentralized exchange or one of the reasons for payment transfer, and Optimistic Rollup for any intelligent logic implementation contract, therefore very suitable for complicated DeFi application.
ZK Rollup outperformed Optimistic Rollup in terms of scalability. On Ethernet House 1.0, ZK Rollup can handle up to 4000 TPS, and conservatively, on Ethernet House 2.0 with the sharding scheme (depending on the ETH2.0 implementation details), throughput can be up to 100,000 TPS. This is already a huge achievement, comparable to Visa's 24k TPS.
Regarding security, the Optimistic Rollup model is based on two assumptions:
1. At least 1 honest node out of n nodes performs all Optimistic Rollup transactions and submits a proof of fraud (also known as a 99% fault tolerance consensus) when an invalid state transition is issued.
2. Layer 1 network has strong anti-censorship.
The ZK Rollup model is based on:
1. Layer 1 network has strong anti-censorship.
In terms of delay, ZK Rollup is far superior to Optimistic Rollup. ZK Rollup only needs to prove that the transaction has been submitted on the chain, which means that the transaction has been finally settled. However, Optimistic Rollup needs to wait for a very close challenging period (at least in days) and relies on the proof of fraud to ensure the final settlement.
In general, ZK Rollup and Optimistic Rollup schemes have their own trade-offs, and if viewed on a simple ERC-20 token transaction, the ZK Rollup scheme is clearly superior.
3. Validium VS Rollup
Finally, the Validium Proofs used by StarkWare is so simple that the Validium is a hybrid Plasma and ZKP(zero-knowledge Proofs) zero-knowledge Proofs, so the new extensibility solution was just rolled out this year. The Validium mechanism is similar to ZK Rollup, with the main difference being that data availability in ZK Rollup is on the chain, while Validium relies on an off-chain data availability solution (which requires a trust-centric service provider not to be bad) with the benefit of better scalability, an option that could theoretically reach 20,000 TPS.
StarkWare both puts the transaction data down the chain (similar to Plasma) and USES zero-knowledge proof to package the transactions down the chain. They use a zero-knowledge proof solution called zkSTARKs, which does not require trusted setup.
Validium may be more suitable for relatively high frequency applications with less trust requirements (such as game dApp), while Rollup is more suitable for situations such as payments and exchanges with higher security requirements.
To sum up, from the safety, performance/efficiency and ease of use of comprehensive ⻆ degrees, a Rollup scheme is optimal.
Now put flowers ⻬ Layer 2 track, the overall trend is up, also known as the etheric fang Layer 2 V god expansion solution of the initial basic successful deployment, the remaining is the improvement work.
DeFi is hot this year and all kinds of DeFi are actively looking for a suitable Layer 2 solution to cooperate with. Compared with moving projects directly to other high-performance public chains due to congestion on the Ethereum chain, it seems more reasonable and feasible to cooperate with Layer 2 scalability solution to reduce transaction costs and improve user experience. DeFi products supported by the Layer 2 project can solve the pain points of slow transaction confirmation and high fees. The Layer 2 + DeFi combination will increase the market cannibalization of centralized platforms and lead to further migration to the decentralized financial world.
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