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What does the breakthrough of Ethereum layer2 mean?



V God's evaluation of the current Ethereum Layer 2 expansion strategy is that the initial deployment is "basically" successful, and the rest is a matter of refinement and deployment. In other words, he believes that the success of Layer 2 is basically a deterministic matter, rather than the previous exploration problem. (And just last year, the exploration of Layer 2 still faced great uncertainty, and even the failure of Plasma.)

Why is it said that Ethereum Layer 2 is close to success? Since entering 2020, Ethereum Layer 2 has made substantial breakthroughs. The most representative ones are the progress of Optimistic rollup and ZK rollup, including Synthetix using the Optimistic rollup solution to build its exchange; Loopring using Zk rollup to build a decentralized exchange; Fuel Labs also launched based on the Optimistic rollup solution Reddit Cash, which provides scalability for Reddit token transfers.

Ethereum fell below $3,000/coin: The market showed that Ethereum fell below $3,000/coin, down 2.05% within a day. [2022/4/18 14:30:22]

StarkEx also recently conducted a simulation experiment, using its ZK rollup technology to introduce Ethereum mainnet accounts (including initial balances) to more than 1.3 million users on the Reddit sub-version r/FortNiteBR. The amortized price of each transfer is only 600 gas. During the move-in process, it did not take up too many network resources, and only used 2.5% of the network for 12 hours. If StarkEX is not used, the whole process will take 4.5 days. StarkEX says they can be used not only to introduce Ethereum accounts to Reddit, but also to provide scalability for its transactions.

Ethereum stood at $4,000/coin for the first time since September 3: Ethereum stood at $4,000/coin for the first time since September 3, an intraday increase of 3.14%. [2021/10/20 20:44:18]

The advantage of using Rollup technology is that it can speed up the transfer speed while reducing costs and achieving a good user experience. Regarding Optimistic rollup and Zk rollup, they are not without disadvantages. For example, Optimistic rollup faces too long token withdrawal time, possible attack risks, etc.

In addition to the most exciting Rollup series, other Layer 2s have also been launched and made progress. For example, Tether has integrated the OMG network, and the Matic network has also been launched. In addition, there may be new solutions on the way.

News | The Ethereum 2.0 mortgage contract is ready: Jinse Finance reported that the ETH 2.0 mortgage contract (deposit contract) has passed the last hurdle and has undergone an end-to-end formal verification called "Runtime Verification". This means that the staking contract is now executable, and it is unclear whether it will launch first on the testnet or directly on the mainnet. Previously, ETH 2.0 coordinator Danny Ryan said last month that Runtime Verificaton would release its full formal verification, analysis and report within a month. Once published, we can deploy the contract. [2020/1/23]

The basic success of Ethereum Layer 2 means that the Ethereum ecosystem has entered an era of scalability. Recently, the cost of Ethereum is very high, and many high-frequency trading users consume more Ethereum gas than the real gas every day. Many crypto users still have fresh memories of the 2017 CryptoKitties that made Ethereum extremely congested.

Voice | Cryptocurrency Analyst: Tether is slowly migrating to the Ethereum network: According to AmbCrypto, cryptocurrency analyst Mark Prestwood said that Tether has been slowly migrating to the Ethereum network over the past few months. Tether amassed huge space on the ETH blockchain, facilitating $417,000 worth of transactions on the ETH network, clogging the network of the second largest blockchain. [2019/10/9]

Without sharding and PoS, the current Ethereum basically cannot carry an ecology. With the launch of various DeFi, games and other applications and protocols, even the development of stable coins is enough to overwhelm Ethereum. Ethereum cannot support their fluency and low fees, which will definitely affect the subsequent development of these projects .

Now the development of Layer 2 can alleviate this situation. Not all transactions need to be completed on the Ethereum mainnet. Different projects can achieve a better experience on Layer 2. Of course this is also a balance. Ethereum is gradually looking for a balance between decentralization, security, and performance. It builds a balanced ecosystem, rather than a one-size-fits-all combination of decentralization, security, and performance.

The basic success of Layer 2 means that Ethereum can carry a larger ecology. The bottom layer of Ethereum will focus more on safe and high-value transactions, and projects based on Ethereum no longer need to worry about excessive fees and slow speed. This means that DeFi will be more likely to enter the mainstream. At the same time, today's layer 2 can also achieve no custody, which can also guarantee the security of user assets to a certain extent.

At the same time, with the progress of PoS and sharding, the combination of layer 1 and layer 2 of Ethereum can basically meet the needs of most open finance and common dApps. This means that Ethereum has the opportunity to become the settlement layer of multiple assets. Although many transactions will be transferred to layer 2, the security of its transactions still needs the final guarantee of Ethereum. With the increase of ecology, ETH will not only not decrease in value On the contrary, more and more value will be captured. With the implementation of EIP 1559, with the large-scale lock-in of PoS, and with the continuous increase of demand for ETH as the underlying mortgage asset, the ecology of ETH and Ethereum will generate mutual push. force. The magnitude of this power ultimately depends on the progress of various decentralized protocols and applications based on Ethereum.

With the advancement of DeFi, the future Ethereum ecology has the opportunity to become the core position of open finance. At the same time, Bitcoin, as the most valuable asset in the encrypted world, will be gradually absorbed into the ecology of Ethereum. To use a metaphor, in the encrypted world, Bitcoin is like the sun, it has the greatest consensus, the most energy, and the highest value, while Ethereum is more like a black hole. If the ecology of Ethereum can be built , the ecology will embrace everything, not even light can escape.

How the future will evolve, we cannot predict. But with so many talents exploring and working hard, the situation is opening up step by step.

From the perspective of Blue Fox Notes, starting from DeFi in 2019, the encryption ecology has basically landed, coupled with the breakthrough of Layer 2, and the maturity of PoS and sharding in the future, the encryption world will become a world with lush vegetation and will eventually evolve Create an unprecedented new situation.


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