Ethereum Unleashed By Layer 2
During a time when Ethereum transaction costs are going through the roof, the need for scaling solutions is as apparent as ever. While the long-term plan is to scale via ETH 2 and sharding, we’re likely years away from the full mainnet implementation.
Therefore, Ethereum may have to look for interim solutions to relieve the congestion. Fortunately, layer 2 solutions like Optimistic Rollups, ZK-Rollups, and Plasma side chains have all been making significant progress in recent weeks.
The following updates are all from the last 30 days.
Hello, OMG Network
The long awaited launch of OMG Network (formerly known as OmiseGo) has finally come. If you’ve been in the space for a while, you may remember the OMG ICO and Airdrop back in 2017 which raised $25M and ironically, congested the Ethereum Network at the time.
Now almost three years later, OMG’s Network’s “More Viable Plasma” (MoreVP) scaling solution is live in Beta on Ethereum mainnet. The launch features a demo wallet, a new website and a block explorer to track transactions. The most interesting piece with the announcement was the integration of Tether (USDT) in a partnership with Bitfinex. For those unfamiliar, USDT is currently the largest consumer of gas on the market today, spending nearly $2M in fees in the past month alone.
It’s possible that Omise Network’s announcement on June 1st was in-part responsible for Ethereum’s subsequent price rally to its 3 month high of $253.55.
StarkWare’s ZK-Rollups demonstrate how to scale Reddit’s Community Points
Starkware’s StarkEx, an implementation of ZK-rollups, demonstrated the potential for their trustless scaling solution by testing how the network would behave if all 1.3 million accounts in the /r/Fortnite subreddit (where BRICKS ERC-20 tokens are issued) were onboarded
600 gas spent over a 12 hour period while only using 2.5% of Ethereum’s bandwidth. If you wanted to do the exact same test on Ethereum today (without any scaling solutions) it would consume 100% of the network for 4.5 days.
Loopring Reaches 1M Transactions
Loopring – a scalable ZK rollup exchange protocol – released version 3.5 earlier this month while also reaching an important milestone with 1 million transactions processed.
Since inception, the protocol has only paid 50 ETH in total for all transactions. At a conservative ETH price of $200 (which was the price at the time of the release), the average trade only cost $0.01.
Matic Network Mainnet
The Binance IEO project – Matic – is live on mainnet with the first version of their Ethereum scaling solution leveraging Plasma side chains and a PoS network. The mainnet launch will be spread over multiple phases in order to ensure a seamless deployment and validator onboarding.
The first step of the launch will allow dApp developers to deploy their applications on the network while allowing ETH, MATIC, and other ERC20 tokens to migrate over to Matic. It’s important to recognize that validator onboarding is not yet open to the public and the Matic Foundation is currently maintaining a set of validators to run the network.
Almost two months after announcing their intentions to build a layer 2 scaling solution for peer-to-peer payments, Dharma officially open-sourced Tiramisu last week – an implementation of ORUs in collaboration with Interstate.
The solution was built from the ground-up to be useful for any project with a need for simple, scalable ERC20 payments and transfers. Given Dharma’s focus on becoming DeFi’s version of “Cash app”, the introduction of ORUs to scale P2P DAI payments between users is a massive step towards fulfilling their vision.
For those interested in digging deeper into Tiramisu, you can view the Github repo here and the original spec here.
Synthetix OVM Demo
The last major L2 implementation we’ve seen in recent weeks has been from DeFi synthetic asset protocol, Synthetix. The team announced a demo (and trading competition) for Synthetix Exchange using the Optimistic Virtual Machine (OVM).
The integration demonstrated the power of optimistic rollups in delivering high-speed, cheap Ethereum transactions. The OVM-based Synthetix.Exchange was an excellent taste of what’s to come with the future of scalable, decentralized applications.
Tying it all together
While many in the Ethereum community are looking forward to ETH 2 (I know we are), the proliferation of layer 2 technologies offers a viable alternative for the short and medium term on the existing Ethereum infrastructure.
Developers have choices too. There’s a range of robust L2 protocols continuing to emerge on Ethereum, providing developers with a wide variety of options today to help scale their applications to millions of users.
In the long run, it’ll be exciting to watch the intertwining of different scaling technologies and how they’ll all fit into the bigger picture – especially with Ethereum 2.0 on the horizon.