Ethereum 2.0 Sets Sail: The Layer 2 Growth Period is Promising

The Ethereum 2.0 Beacon Chain officially launched its genesis block on the evening of December 1, marking the entry of Ethereum 2.0 into a new stage of development. This is an important milestone event for the Ethereum community, signifying that the overall transition of Ethereum from PoW to PoS is accelerating, bringing the vision of significant scalability closer to realization.

However, the long implementation cycle of Ethereum 2.0, frequent adjustments to the roadmap, and high migration costs have led to many challenges for this significant upgrade. Meanwhile, various Layer 2 scaling solutions such as Rollup, Plasma, and Validium have emerged in the Ethereum ecosystem, each with its own advantages in terms of scalability, implementation cycle, and engineering difficulty.

In the short term, Layer 2 solutions are more attractive to the Ethereum ecosystem and may even become an important component of Ethereum's long-term development. This article will explore the necessity and value of Layer 2 in the context of Ethereum 2.0, as well as the advantages and disadvantages of various Layer 2 solutions and the current state of the ecosystem.

Layer2 may become a long-term partner of Ethereum infrastructure

For a long time, Layer 2 has been seen as a transitional solution for public chains to mature. However, the Ethereum core development team recently confirmed that the priority of the Layer 2 solution Rollup should be higher than the originally planned sharding solution. This adjustment reflects the challenges faced by sharding technology: it is expected to take 2-3 years to implement and can only bring about a 64-fold increase in TPS. In contrast, Layer 2 solutions like Rollup can achieve performance improvements of up to 100 times.

From a design philosophy perspective, maintaining the simplicity of Layer 1 and building complex functionalities on Layer 2 is becoming increasingly important. This indicates that Ethereum and Layer 2 may coexist in the long term, rather than being in a short-term supportive relationship. Important applications such as Uniswap and Synthetix have already supported Layer 2 solutions, further solidifying the position of Layer 2 within the Ethereum ecosystem.

Layer2 solutions each have their own strengths, the prospects of Rollup are promising.

Currently, there are 6 main solutions for Ethereum Layer 2: State Channels, Sidechains, Plasma, Validium, ZKRollup, and Optimistic Rollup. They each have their own characteristics in terms of data storage, computation location, and security mechanisms. For DApp projects, it is wise to choose the appropriate Layer 2 solution based on specific needs, and it may even be possible to use multiple solutions simultaneously.

From community discussions, the Rollup series solutions that receive support from large applications, have fast development progress, and strong scalability are most likely to be widely adopted. Among them, Optimistic Rollup, due to the support from DeFi giants like Synthetix and Uniswap, has particularly promising prospects.

However, the diversification of Layer 2 solutions also brings new challenges: the composability of DeFi may be significantly weakened. For example, ZK Rollup and Optimistic Rollup are currently not interoperable, which may further exacerbate liquidity fragmentation. How to enhance cross-solution interoperability while maintaining the advantages of Layer 2 will be an important issue in the future.

Overall, the evolution of Ethereum 2.0 remains full of uncertainties. However, it is certain that as the Ethereum ecosystem grows larger, the difficulty of fundamental transformations increases. In this context, Layer 2 is likely to become an important long-term infrastructure supplement for Ethereum.