Beginner’s Guide: Reading the Ethereum Expansion Plan in One Article

Ethereum is a monolithic blockchain: it provides its own security, executes its own transactions, and maintains its own data availability. 

However, this traditional type of blockchain-a chain that provides its own layers of security, execution, and data availability-faces inherent limitations due to its “all-round” approach. 

These restrictions may result in high transaction costs for users.

This is because the scarce block space in the execution layer of Ethereum and the increasing demand for network usage have caused transaction congestion, thereby driving up transaction costs. 

In other words, a single blockchain can only support so many transactions at a time. 

In order to solve these limitations, developers and researchers have taken the lead in launching a series of different expansion solutions in recent years. These solutions come in different forms and capacities, but most of them serve as the execution layer centered on Ethereum, providing cheap and fast encrypted transactions. 

These expansion solutions in this article can already be tried, and more are on the way. In order to catch up with what is happening, let us understand and grasp the pulse of the contemporary Ethereum expansion scene! 

Off-chain and on-chain expansion

The Ethereum community adopts both off-chain and on-chain expansion strategies. 

Off-chain expansion refers to any innovation that provides external execution for the underlying blockchain such as Ethereum. People call these innovations Layer 2 (Layer 2), abbreviated as “L2”, that is, working on Layer 1 to optimize the ability of “L1” to revenge.

On-chain expansion refers to the direct modification of the blockchain to increase its throughput. Although off-chain expansion resources such as rollup and vslidium will expand Ethereum in the short term, the long-term expansion of the network will be sharding, that is, the split of Ethereum L1 into multiple chains with shared security. 

Deep understanding of L2

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Picture from redditor user emkoscp

Rollups

Rollup is a scaling solution that executes transactions on its own optimized execution layer, but publishes its transaction data to Ethereum (there may be other L1 later). In this way, rollup directly inherits the security guarantee of Ethereum. 

Specifically, there are two main types: zk rollups and optimistic rollups.  

Zk rollup uses zk-SNARK (a special encryption certificate) to “aggregate” many off-chain transactions into a verifiable batch of transactions. These small proofs of validity are then effectively published to the Ethereum blockchain. Off-chain execution + through zk-SNARKs face data = zk rollups. 

Optimistic rollups also “aggregate” many off-chain transactions into batch transactions, but does not use zero-knowledge proofs. These rollups “optimistically” assume that the transaction is valid unless the challenge is proven through so-called fraud. Off-chain execution + on-chain data + fraud proof = optimistic rollups. 

The current Rollup includes:

  • Oneoptimistic arbiter of rollups)
  • Loop ring (zk rollup)
  • Optimism(optimistic rollups)
  • Polygon Hermez(zk rollup)
  • zkSync(zk rollup)

Validiums

Another expansion solution similar to rollup is validiums. 

The function of Validiums is similar to zk rollup because they rely on zero-knowledge proofs to batch and execute transactions. However, compared to zk rollups, validiums maintains the availability of its off-chain data. This scheme makes these expansion solutions have high performance, but to a certain extent, they are also managed. 

Sorare is!

In other words, off- chain execution + zero-knowledge proof + off-chain data = validiums.

The Validium project includes:

  • DeversiFi, currently the largest Validium-based decentralized exchange.
  • Immutable X, L2 centered on NFT
  • Sorare, a fantasy football game powered by validium

Volitions

xF55rxPSvW14MIgPyaj6jNTcFyF5wU9iKFpZ7pax.pngVolitions is a hybrid expansion solution that allows users to choose between “zk rollup mode” and “validium mode” . 

In practice, this means that users of Volitions can execute transactions off-chain, while choosing data availability on or off-chain, that is, through Ethereum or through validiums. 

Side chain

In the context of Ethereum, the side chain is a blockchain compatible with Ethereum. 

They can be independent blockchains, such as Binance Smart Chain (BSC), or more generally, they can be customized blockchains that explicitly cater to Ethereum users, such as Polygon’s sidechains. The compatibility of these chains with Ethereum stems from their support for the Ethereum Virtual Machine (EVM). 

Therefore, side chains can be used as the external execution layer of Ethereum L1, even if they do not directly inherit the security guarantees of Ethereum (such as human llups). Some projects, such as Polygon’s sidechain, blur this distinction by submitting checkpoints to Ethereum. 

The side chain projects are:

  • Polygon
  • xDai
  • Ronin, a custom sidechain for NFT game Axie Infinity

State channel

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Connext: One of the most famous state channel projects in Ethereum.

State channel is an off-chain expansion solution based on multi-signature smart contracts. ETH, etc. can be locked in these contracts and used to create two-way payment channels between users. 

In other words, these channels are like an “open tab.” Users can make 100 off-chain transactions between each other, then close their tags and pay the bill, just like by sending the last closed transaction to Ethereum. Many transactions can be simplified through state channels. 

State Channel Project: Connext

Plasma

The Plasma chain is a scaling solution that relies on fraud proofs like optimistic rollups, but maintains the availability of off-chain data. As one of the earliest areas of L2 research, the Plasma implementation failed to gain as much appeal as subsequent expansion solutions. 

When is sharding?

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Picture from trent.eth

The Ethereum development community expects to launch sharding in the next few years. 

This update will propagate Ethereum’s previously isolated protocol among 64 new “shards” or chains. By distributing the network load of the blockchain in this way, the horizontally expanded L1 of Ethereum will greatly improve transaction latency and throughput capabilities. 

It is worth noting that, as Ethereum creator Vitalik Buterin emphasized before, “sharding and Rollup expansion gains have multiplied.” In short, these innovations will enable Ethereum to easily support billions of users. 

The future of Ethereum expansion is modular

Until recently, Ethereum has been a monolithic blockchain whose security, execution, and data availability are all dependent on itself. 

What we are starting to see now, and we will see more of the future, Ethereum is becoming a modular blockchain. In other words, we will see that Ethereum increasingly relies on the external execution layer and external data availability layer to improve its basic capabilities.

We have discussed above what these early external execution layers look like, from rollup to sidechain. It is also worth noting that customized data availability chains like Polygon Avail will also play an important role in expanding the future possibilities of modular blockchains. 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/beginners-guide-reading-the-ethereum-expansion-plan-in-one-article/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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