The blockchain trilemma, the challenge to maintain a balance between security, scalability and decentralization, serves as one of the strongest reasons why there is a dire demand for scaling solutions. Quite naturally, the need for Layer 2 scaling solutions is rapidly increasing.
As the need for efficiency and scalability grows, so does the need for state channels layer 2 and the scaling solutions. These address and overcome difficulties of the base layer, such as network congestion and transaction charges. Furthermore, the layer 2 transaction speed is also impacted positively.
Fundamentals of Layer 2 solutions that you need to know
To simplify it, layer 2 solutions are the frameworks or protocols mounted on existing blockchains. The primary purpose of it is to improve the scalability and the number of transactions each second. The layer 2 interoperability also makes sure that the asset transfer goes on without any interruptions.
How is it different from the others? Well, layer 2 solutions take off the most load from the main chain. After that it takes it to an additional layer. Doing that reduces the load off the main chain and ensures strong security and decentralization.
If we are to give you an inside theory, let’s just say that the layer 2 solution takes away all the transactions from the main chain to a parallel chain. And then it bundles them all into a single transaction and takes it to the main chain. Doing so, it gives the main chain strong layer 2 security considerations. Furthermore, it also maintains the layer 2 transaction speed by taking multiple transactions elsewhere.
The need of Layer 2 solutions
Despite the noises, we all can see that the crypto is growing at a rapid rate. With that, the developments must grow too. Cryptocurrencies like ETH often face a lot of congestion, due to which the transaction fees slowly become daunting. Ultimately, it refrains ETH for widespread usage. Having state channels layer 2 by your side can eliminate such issues.
If the layer 2 adoption challenges are bypassed, blockchains like ETH and Bitcoins can be accessible to many decentralized apps.
Different types of layer 2 solutions
By now, you know how important it is to scale blockchains. The future of layer 2 scaling indeed is in good hands as many types of solutions have emerged:
| ZK Rollups | In these, there are validators that process and aggregate a number of transactions off-chain. Instead of generating all the information of each transaction, it creates a cryptographic proof of valid transactions. And it does so without revealing sensitive information. Then it goes back to the main chain. |
| Optimistic Rollups | If you want something fraud proof, Optimistic Rollups is the one you should go to. It takes off the burden of the number of transactions and the speed of transaction off the main chain and takes it to ‘rollups.’ Furthermore, in this, any kind of fraud transactions are not only detected but it gets challenged as well. |
| Sidechains | Sidechains are the state channels layer 2 that works side by side or parallelly with the main chain. It is more focused on the layer 2 transaction speed. In addition to personalization and scalability, it also does justice to layer 2 interoperability. |
| Plasma Chains | These are the state channels layer 2 solutions that allow the creation of interconnected chains which are also known as child chains. All these child chains handle a set of transactions. Periodically, the main chain updates all of these transactions. |
| Validiums | Validiums are a mix of ZK and Optimistic rollups. However, if there is no strong need of privacy concern somewhere, Validiums are a superior option to both Optimistic and ZK Rollups. |
Wrapping Up
Blockchains are making quite some noise even outside of the digital currency sector. The importance of layer 2 solutions has never been so high as it minimizes most of the limitations faced by ETH and Bitcoin. Keeping the insights at the back of the mind, it is said that the future of layer 2 scaling seems bright.
