Investment ideas of layer2

Investment ideas of layer2

layer2 Fat brother didn’t talk much, today I’m talking to you guys~

Although I don’t understand the technology, from a macro point of view (see the figure above), from the Layer 2 state synchronization method, Layer 2 is divided into two categories: one is side chain implementation (Side Chain), and the other is Rollup.

The side chain is to synchronize the state of Layer 2 to Layer 1 through a consensus different from Layer 1. The advantage of the side chain is that it reduces transaction costs, and it is cheaper than everyone imagined.

For example, Polygon (horseshoes) developed by the Indian brother, as a side chain with a TPS of 7k (Ethereum only has 14 TPS), in terms of transaction speed, compared with the average transaction time of Ethereum from about five minutes to several hours. People who use the PoS chain will enjoy almost instantaneous transactions (<2 seconds).

However, the overall security of the side chain has a big problem, and the high TPS reduces the security of the Layer 2 consensus. Even so, its cheap advantage attracts many projects to build applications on Horseshoe.

Investment ideas of layer2

Rollup is divided into two types: one is zkRollup and the other is Optimistic Rollup. The so-called Optimistic Rollup, optimistic Rollup, expect Rollup to correctly synchronize to Layer1 in most cases.

At the same time, in order to prevent the state of synchronization errors, a challenge mechanism is provided. Optimistically, the chance of challenge is relatively small. In the case of a challenge, Layer1 can determine the correct state. zkRollup is the most direct way of state synchronization. Through zero-knowledge proof technology, it provides proof of state changes while submitting the state to Layer1.

I won’t go into more details for more details. In short, sidechains and Rollup are currently the mainstream expansion solutions. Brother Fatty believes that Rollup may gradually become mainstream in application scenarios with very high security requirements, such as DEFI. After all, no one wants the money in his pocket to be insecure. This is a matter of life. Moreover, currently some chains layer1 have also been made very cheap, and it is no longer difficult to complete a swap for less than 1 cent. With the iteration of the consensus algorithm, the layer1gas fee will be gradually reduced.

In mass consumer-level blockchain scenarios where security requirements are not so high and transactions are relatively high, side chains also have their flexible and cheap value.

From an investment perspective, the investment of ordinary investors in layer2 is directly omitted, and investment in layer1 is just fine. Because the knowledge concepts involved are more complicated, to be honest, the fat man doesn’t understand technically. The rich friends around, basically layer1 layout is done relatively well.

If you really want to participate, you still need to look at the mainstream institutional layout, and do something for every project. After all, there are not many technical teams in the world that are really capable of engaging in layer2, and they have long been laid out by some discerning ones. Finally, if the Ethereum layer2 has no chance, then layout layer2 projects on other chains. The east is not bright and the west is bright.


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