Expansion Development from Layer 0, 1 and 2 of Blockchain

The blockchain system has six layers, the data layer, the network layer, the consensus layer, the incentive layer, the contract layer and the application layer, which are inseparable in structure and jointly realize the functions of the blockchain. 

The data layer and the network layer are the basic architecture of the blockchain and the bottom layer of the entire blockchain system. Above the basic structure, the consensus layer, incentive layer, contract layer and application layer together constitute the protocol part of the blockchain.

The industry generally refers to the open system interconnection communication reference model OSI of the communication industry. The six levels of the blockchain system are re-divided into three layers, which are Layer 0 (L0), Layer 1 (L1) and Layer 2 (from bottom to top). L2).

The public chain exists in the blockchain world like an operating system platform. Ethereum stands out among many public chains with its smart contracts, innovation and security, and has built a variety of applications (DApps) on it. However, during the development of Ethereum, there have also been problems of network congestion and high gas fees. In the final analysis, the reason why the gas fee is so high is that Ethereum has the problem of weak data processing ability and cannot compete with mainstream payment systems, that is, the demand for transactions is still more than the Ethereum blockchain can actually handle each time. many. With the development of blockchain so far, how to expand the capacity needs to be solved urgently.

Layer 0, also known as the data transmission layer, corresponds to the bottom layer of the OSI model, and mainly involves the combination of blockchain and traditional networks. Layer 0 blockchains lay the foundation for layer 1 blockchains. It provides the underlying infrastructure for creating chains and also allows for cross-chain interoperability, meaning that chains created on top of layer 0 can communicate with each other. Cosmos and Polkadot are some great examples of layer 0 blockchains.

Polkadot is often referred to as a Layer 0 blockchain. This is because the Polkadot mainnet, as a relay chain, only plays the role of providing security and interoperability for the major parallel chains. On the basis of Polkadot, Layer 1 blockchains like Ethereum can be linked through slots.

The Layer 1 capacity expansion solution, also known as on-chain capacity expansion, refers to the capacity expansion solution implemented on the blockchain base layer protocol. At present, L1 networks such as Ethereum 2.0, Polkadot and Solana mainly change the underlying consensus and block production rules structurally. By processing the underlying protocol of the blockchain, that is, the code of the main network blockchain itself, it increases the number of blocks. The transaction throughput of the blockchain. They can be further divided into: Protocol Improvements and Sharding.

Protocol improvements are changes made to the underlying protocol to expand transaction throughput, primarily by increasing the number of transactions that can be included in a single block (sustainable only in the short term), reducing the time lag between block creations, or The PoW consensus model is realized by the structural transformation of PoS.

Sharding refers to dividing the computing tasks and data space of a blockchain into multiple chains. For example, there will be many sharding chains in Eth2.0. Since in sharding, transactions are assigned to specific nodes for verification, rather than the entire blockchain network, there is no competition that leads to high transaction fees, and transactions are faster, which in turn increases per second The number of transactions that can be processed.

The Layer 2 expansion solution, also known as off-chain expansion, refers to improving transaction processing speed through solutions such as state channels and side chains without changing the underlying protocols and basic rules of the blockchain. The L2 solution is an extension of L1 by smart contracts built on the chain. This is done by outsourcing transaction execution to the L2 network, which in turn reports the transaction processing results to the L1 network, creating additional space for pending transactions.

At present, Layer2 solutions mainly include state channels, side chains, Plasma, Optimistic Rollup, Validium, zkRollup, etc. Arguably, a layer 2 solution essentially processes transactions faster than a typical blockchain architecture by running an architecture on top of the blockchain base layer.

The state channel is to open up an off-chain channel. Users can transfer on-chain assets to the channel by locking the assets in the smart contract, and interact with the assets in the channel. Users settle when they leave the channel, and the assets will be transferred back to the main chain. Channels allow participants to make x transactions off-chain, while on-chain can only submit two transactions to the network, enabling extremely high throughput. State channels employ multi-signature contracts, enabling participants to quickly and freely transact off-chain before settling with the mainnet. This will minimize network congestion, charges and delays. There are now two kinds of channels: state channels and payment channels.

Sidechains are independent blockchains that run in parallel with the mainnet and are compatible with the Ethereum Virtual Machine. They are compatible with Ethereum via a two-way bridge and operate according to self-selected consensus rules and block parameters. Simply put, sidechains are like pathways that connect different blockchains to each other to achieve blockchain expansion. The sidechain is completely independent of the Bitcoin blockchain, but the two ledgers can “interoperate” and interact.

Plasma is an independent blockchain anchored to the Ethereum main chain and uses fraud proofs to arbitrate disputes. Plasma is also known as “blockchains in blockchains”. Anyone can create different Plasma on top of the underlying blockchain to support different business needs, such as distributed exchanges, social networks, games, etc.

The expansion principle of Rollup is to aggregate hundreds of processed transactions into one batch and execute the transactions in batches on the L2 chain parallel to the Ethereum main network. The finalized transactions are then released to the bottom layer in batches (L1 , Layer 1) blockchain to improve transaction speed. Among different Rollup schemes, Optimistic Rollup and Zero-Knowledge Proof Rollup have achieved different degrees of results. Their execution principles are similar, and the main difference is the transaction verification process.

The Optimistic expansion plan is based on the “optimistic” mechanism and uses Fraud proofs, that is, the system optimistically believes in the correctness of the transaction data. The data has not been effectively verified, but will directly enter a waiting period. If any node raises an objection and corroborates a malicious transaction, the transaction will be cancelled; if there is no objection, the waiting period will end, and the transaction will be automatically completed and written into the block. This “fraud proof” scheme does not need to deploy verification in each transaction, which greatly saves network computing resources and costs, while also ensuring timely finality. The two most prominent schemes of OptimisticRollup are Arbitrum and Optimism.

ZK Rollup is a scaling solution that passes zero-knowledge validity proof. ZK Rollup batches off-chain transactions and generates cryptographic validity proofs to verify the authenticity of each batch. Proof of validity adds bulk transactions to the L1 blockchain. When a transaction batch is submitted, the proof can be quickly verified by the L1 contract, and invalid batches can be rejected directly.

Both Validium and zkRollup are scalable solutions for Ethereum Layer 2, and their transaction validity is achieved through the use of zero-knowledge proofs, but zkRollup’s data availability remains on-chain, and Validium is off-chain. Because transaction data is not published on the blockchain, additional trust assumptions are necessary, and users must trust the operator so that the data can be accessed when needed. Validium’s off-chain data storage has many benefits, faster transactions, and increased user privacy because transactions are not accessible to the public. However, since the data is kept off-chain, users will not be able to see their available amounts in the smart contract at any time. Therefore, users have to get data from the repeater to get hold of their funds, and they have to trust the repeater.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/expansion-development-from-layer-0-1-and-2-of-blockchain/
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