The development of Layer 2 is anxious and difficult to be compatible. The development of cross-chain has made little progress but seems to be tepid. Among the many public chains, Ethereum still seems to be a “livable” place.
Original title: “Layer 2, cross-chain and public chain are three pillars, who will realize the scalable dream of blockchain? 》
Written by: San Li
Counting the development of the blockchain over the years, from the initial Bitcoin and Ethereum to cross-chain and DeFi, to the NFT and Metaverse since the beginning of this year, new things are constantly appearing, and more and more companies, users, etc. Participating one after another, the wave of the blockchain has not been flattened out one after another.
However, with the growth of the ecology and application of the blockchain, there are more and more operations on the chain, which makes the congestion evolved from the initial “small problem” to the “big pain point”, which hinders the development of the blockchain.
As mentioned in our previous article, if blockchain is to be used to build a value delivery network, some people believe that its performance should at least target the current real-time data processing speed of the entire Internet information , including 2 million emails per second, 65,000 google searches, 72,000 youtube videos, etc.
But at present, Bitcoin can process about 7 transactions per second, and Ethereum can process about 15 transactions per second. Solana, which is known as the Nasdaq speed, has a TPS of only 56,000 per second. The excess transactions can only be in order. Waiting in line.
Therefore, in order to solve this problem, various methods have been considered, such as the development of more and more new public chains, the transfer of operations to Layer 2 under the chain, and the efforts to realize the cross-interoperability and interconnection of many chains. chain.
So, Layer 2, public chain, and cross-chain are three pillars. Who will realize the scalable dream of blockchain? Let’s sort them out separately.
Layer2
Layer2 is also called off-chain expansion, which corresponds to Layer1 (on-chain expansion). On-chain expansion is to directly modify the block size, consensus mechanism, etc. on the blockchain, which is similar to widening the road from beginning to end when the road is congested. It affects the whole body and takes time and effort.
Therefore, since 2018, more and more off-chain expansion plans have emerged, namely the Layer 2 expansion plan, which is similar to building a viaduct on a congested road to relieve congestion.
Since Ethereum currently has the richest ecology and the highest security, it has become the core position for Layer 2 expansion. For example, Polygon, which has reduced the transaction speed to a few seconds, is Layer 2 on Ethereum, which has achieved the performance expansion of the main network.
However, in addition to extending performance, Layer 2 can transfer more and more complex requirements to off-chain, so that some functions that cannot be implemented on the mainnet can be extended off-chain. For example, a public chain like Bitcoin that has almost no smart contracts can realize the functional expansion requirements of smart contracts like Ethereum after the Layer 2 technology matures.
At present, Ethereum’s Layer 2 expansion plan mainly includes 5 types of side chain, Rollup, channel, Plasma, and Validium. Let’s briefly introduce:
Side chain
The side chain is an independent blockchain that runs parallel to and independently of the main network. It uses a separate consensus mechanism, and its security is not protected by Layer 1.
Rollups
Rollup is to roll up multiple transactions and upload them to Layer1. Transaction data etc. are released on Layer1, but the execution of transactions is outside of Layer1. There are currently two types of Rollups:
- ZK Rollups, the full name of Zero Knowledge Rollups, bundles hundreds of transactions off-chain and generates an encrypted certificate, which will be submitted and published on Layer 1 .
This means that ZK Rollups only needs proof of validity, not all transaction data. With ZK Rollup, validating blocks will become faster and cheaper because there is less data to be packaged.
- Optimistic Rollups, optimistically assumes that all transactions are valid and all data is stored on the Layer 1 chain. Therefore, Optimistic Rollups are safe and decentralized, but transaction confirmation on the main chain is affected by the challenge period as a fraud prevention mechanism. , It takes a long waiting time for transaction confirmation .
Since Optimistic Rollups runs parallel to the Ethereum main chain and is compatible with EVM and Solidity , everything that can be done on Ethereum Layer 1 can be done on Optimistic Rollups, which is also different from ZK Rollup.
Channels
Channel means that even if participants conduct N off-chain transactions, they only need to submit two transactions on the chain, achieving extremely high transaction throughput.
However, participants need to lock an ETH deposit in a multi-signature contract (a type of smart contract that requires multiple private key signatures to execute a transaction).
Participants can perform off-chain transactions after being locked, and after the final on-chain transaction is submitted, the previously locked deposits can be unlocked.
Plasma
The Plasma chain is an independent blockchain, anchored to the main Ethereum chain, and uses fraud proofs (similar to Optimistic Rollups) to arbitrate disputes. But it can only support basic Token transfer, exchange, etc.
Validium
Validium uses proof of validity like ZK-Rollops, but the data is not stored on the Ethereum Layer 1 main chain, but Layer 2 transaction data is stored off-chain.
This means that each Validum chain can process 10k transactions per second, and multiple Validum chains can run in parallel.
Although there are not many Layer 2 solutions at present, for the entire expansion dream, the mechanisms of these several solutions are intricate, and their advantages cannot be combined, their disadvantages are also different, and it is difficult to achieve compatibility. This is undoubtedly a big problem.
However, the data shows that as of October 23, the total lock-up volume of Ethereum Layer 2 is close to 4 billion U.S. dollars, and Arbtirum, dYdX, and Optimism rank among the top three in lock-up volume. Among them, the fastest increase in lock-up volume in the past seven days is AZTEC, a privacy and expansion solution based on ZK Rollup. It can be seen that the expansion plan based on ZK Rollup is favored by many people.
Cross-chain
As mentioned earlier, most of the ecology and applications are currently on Ethereum, so many Layer 2 solutions are also based on Ethereum. However, in recent years, many public chains and new public chains have been developed. Although the performance has been improved, no chain can accommodate all ecological applications on its own.
Therefore, although more and more public chains are set up more and more perfect, they have become “information islands” and isolated from each other. If these chains can be interconnected with each other, not only the expansion on the chain is more ideal, and it will greatly promote the development of the entire blockchain.
In order to realize asset circulation, information exchange, and application collaboration between different blockchain platforms, cross-chain technology was officially born for this purpose. For example, Twitter recently supported the “Bitcoin payment” reward function application of the Lightning Network, which is an application of cross-chain technology, which improves the transaction speed and practicality of the Bitcoin network.
The current cross-chain technology mainly has the following implementation modes:
Notary Public Mechanism
The notary mechanism is the simplest method for chain-to-chain interaction. A credible organization will prove the interaction between the two chains. It is similar to finding a respected township chief to prove the cooperation between the two villages.
Side chain/relay
Refers to transactions through side chains or relay chains, using a multi-centralized way to solve the trust problem. It is similar to inserting more power strips into the socket.
Hash lock
The smart contract is used to ensure that the transfer between any two people can be realized through a “payment” channel, completing the role of “intermediary”, similar to a robot, and the more representative project is the Lightning Network, which has made significant progress in the near future.
Distributed private key control
Distributed private key control is based on a multi-party calculation and a shared technology of threshold keys in cryptography, which is a relatively new cross-chain method.
Divide the private key into A shares and distribute them to A participants at the same time. Only when N (N is less than or equal to A) private key distributions are collected, a complete private key can be recovered and the assets in the private key can be recovered. Unlock it. It introduces the concept of locking and unlocking. Through such a locking and unlocking operation, the Token on the original chain can be managed with the right to operate.
Among the numerous cross-chain projects, Polkadot and Cosmos are technical hotspots with high attention at this stage. In particular, Polkadot has entered the much-anticipated parachain deployment and slot auction stage this year, which has attracted a lot of attention.
On December 8th last year, Polkadot founder Gavin Wood announced the relevant progress of Polkadot, as follows:
- Launch Rococo v1 (test network) and wait for its stable operation;
- Online Kusama’s system (public interest nature) parachain;
- Open the auction on Kusama;
- The parachain that was successfully auctioned on Kusama was launched;
- After the audit is completed, the public interest parachain of Polkadot will be launched;
- Open the auction on Polkadot;
- Launched the successful parachain on Polkadot.
At present, the KSM testnet has completed the auction, and the competition is very fierce. Polkadot will also open the official auction in mid-November. We will continue to pay attention to what changes will be made for the expansion at that time.
Public chain
Although the dream of expansion has always been based on the two ways of moving from the chain to the chain, or enabling the interconnection of many chains, it would be great if there is a public chain that can complete all operations to the maximum and easily.
However, looking at the development of this year’s public chain, many people say that 2021 may be the first year of the public chain’s outbreak. Then let’s take a look at the current public chain situation.
Bitcoin: As a “digital gold”, Bitcoin’s public chain function seems to be constantly weakening, and it tends to represent more of a store of value.
Ethereum : With the explosive growth of NFT and DeFi last year and this year, the performance of Ethereum has been difficult to carry a large amount of market demand. The entire ETH2.0 plan is divided into four stages: stage 0: beacon chain; stage 1: sharding; stage 2: smart contract; stage 3: off-chain state storage; stage 4: sharding contract.
However, according to the Ethereum roadmap, the progress of Ethereum 2.0 has been repeatedly postponed after the “London” upgrade. The initial plan is completed around the first quarter of 2022. According to the current team’s ongoing delays, it may be even later. Some.
Therefore, there is no obvious improvement for users. It seems that the transition phase is based on various Layer 2 solutions based on Ethereum. Due to the different implementation mechanisms, it is difficult to achieve compatibility. almost impossible.
BSC: September is one year from the BSC mainnet launch. In this year, BSC has won nearly 11% of the asset lock-up share in the DeFi market, which can be described as eye sickness. However, the several application security incidents that have occurred on the chain are also lingering fears.
Solona: In the past six months, public chains have blossomed . From Solana, known as the killer of Ethereum, to the avalanche Avalanche, whose lock-up volume has repeatedly hit record highs, they have performed well.
However, there are frequent problems. For example, Solona was unable to provide normal services on September 14th. The staff tweeted that it was due to exhaustion of network resources and a DOS attack. Many people said on Twitter that it had been sold. Take all the SOL and return to ETH.
The development of many “new public chains” is still at an early stage, and there does not seem to be a “perfect public chain”, and even more hopes are still pinned on Ethereum.
summary
Judging from the current development, the development of Layer 2 solutions has fallen into anxieties and is difficult to be compatible. The development of cross-chain has made little progress but seems to be tepid. Among the many public chains, Ethereum still seems to be a “livable” one. land.
With the emergence of more and more public chains, as well as the gradual growth of applications and ecological development, based on the current development situation, I think the cross-chain vision seems to be more in line with long-term development, and it is more likely to achieve greater limits in a short time. Extension. How is the next progress, let us wait and see!
