Layer 2 track cluster of ETH2.0 busy ahead, how to develop public chain in the future?

Before ETH 2.0 is mature, Polkadot, BSC and other public chains are also raging and ready to shake the status of Ether, Layer 2 solution will be the solution to the problems faced by the huge application system of Ether.

The congestion of Ether and the high Gas fee make the Dapp applications on its ecology headache. In order to break this situation, Ethernet started to promote the ETH2.0 project in 2019, introducing two parts that did not exist in Ethernet 1.0: Casper FFG PoS mechanism and Shard Chains.

I. Overall planning and progress of ETH2.0

ETH2.0 is planned to be launched in at least three phases: Phase 0, Phase 1, and Phase 2. Phase 0 goes live in 2020, and Phases 1 and 2 will be released in subsequent years. Of these, only Phase 0 has an enriched specification and is updated periodically.

Layer 2 track cluster of ETH2.0 busy ahead, how to develop public chain in the future?

l Stage 0: the first stage of Ether 2.0, which will implement the Beacon Chain. The designers of Ether 2.0 want to make the Beacon Chain the center of the Ether 2.0 ecosystem and the root of security and validation for all other shards.

l Phase 1: The second phase of Ether 2.0. The goal of Phase 1 is to reach consensus on the content of the fractional chain, rather than on its meaning. This phase will integrate Shard Chains (Shard Chains). Shard Chains are a scalable mechanism that enables parallel transactions, storage, and information processing. will greatly improve operational efficiency.

l Stage 2: The third stage of Ether 2.0, Shard Chains will transition from simple data containers to a structured chain state. This phase may come online in 2021 or 2022. This phase may include fresh concepts like State rent, or will reintroduce smart contracts, including accounts, contracts, and features like ETH transfers and withdrawals will be restored. Phase 2 will enable cross-slice transfers and contract calls, build execution environments to support building scalable applications on Ether 2.0. Beyond that, there are unknowns in Phase 2.

l In addition to the above three phases, ETH 2.0 may introduce off-chain storage of state in phase 3, transferring as much state as possible to off-chain processing. Instead of storing the entire state on the chain, some state information and aggregators will be stored, and users will be responsible for storing the complete state off-chain. When users want to interact with the state, they will include proof of the current state in the transaction. The resource requirements to run the verification node would then be much lower than originally, thus increasing the operational efficiency of the entire network. Each slice will be stored independently and cannot interact directly with another slice, and the interaction between the slices may be solved by synchronization or expansion.

At present, ETH 2.0 is not yet mature, but through the combing of the upgrade of Ether 2.0, we will find that this upgrade is a process of applying the active upgrade ideas and architecture overlay in the market, and the upgrade result and compatibility may be left to the market to verify. So Layer 2 was born in this special stage.

II. Mainstream Layer 2 solutions

  1. Layer 2 origin

As mentioned above, the low transaction speed and high Gas fee of Ether has brought great inconvenience to the whole ecological participants.

  1. Classification and characteristics of various Layer 2 technologies

As the name implies, Layer 2 refers to the second layer network solution built on top of the base layer network. Based on the Ethernet Layer 1 is responsible for handling the computing and transfer of all applications deployed on the Ethernet, which is currently in an overloaded state. So the scalability problem and high Gas fee problem are solved by Layer 2. The mainstream Layer 2 currently has Stateful Channel, Sidechain, Plasma, Optimistic Rollups, Zk Rollup and so on. Let’s briefly explain these solutions.

l State Channel (State Channel)

State channel refers to the direct establishment of a channel between users, and this type of solution cannot really solve the congestion problem of Ethernet.


Run a public chain based on Ether, and then transfer most of the operations to this public chain, and finally feed the result to Ether. However, the security of the side chain cannot be guaranteed, and it is difficult to promote the side chain.

l Plasma

Plasma refers to the scalable autonomous smart contract, and the operation idea of Plasma technology is to operate under the chain and feed the result to the main chain. Through the effective cooperation with the main chain to ensure sufficient security. However, users must monitor the Plasma chain, so the experience of ordinary users is not good.

Optimistic Rollup

Optimistic Rollup is a structure that uses OVM to enable smart contracts on a Layer 2 network. The structure borrows heavily from the plasma and zkRollup designs.OR solution security is guaranteed, but the validation period is too long. The waiting time of about two weeks is too long for users.

l ZK Rollup

ZK Rollup is based on the zero-knowledge proof layer 2 scaling scheme (layer2). ZK Rollup data availability allows anyone to restore the global state of an account based on the transaction data stored on the chain, thus eliminating the security risk due to data availability. However, its drawback is that it is computationally intensive, technically difficult and difficult to support virtual machines.

However, ZK Rollup is launching a Turing-complete virtual machine, so it is likely to replace Optimistic Rollup in the future.

Arbitrum Rollup

Arbitrum Rollup is an off-chain protocol managed by an Ethernet on-chain contract.

Arbitrum Rollup requires a verifier (to pay a deposit), and the speed of the verifying node’s VM directly determines the speed of the VM’s operation. When a disputed assertion occurs, the node will generate a fork and form a parallel tree of the future.

III. The impact of Ether’s Layer2 on the public chain landscape

The biggest problem of Ether’s Layer2 at present is the existence of the silo effect. If this silo effect can be broken, DeFi projects will migrate to Layer2 in droves, thus greatly alleviating the current congestion and expense dilemma of Ether, which can have hundreds of times of space improvement.

Based on the strong call of Ether, there will be some pressure on other public chains. When Ether’s congestion cannot be solved, other public chains can act as Ether’s side chains to help Ether ease the congestion pressure and thus gain a position in the whole DeFi development process. But if Layer2 can successfully solve the problem, then other public chains will be less valuable to Ether itself, and Ether will absorb more digital assets to make itself bigger in volume.

As more protocols based on Ether on ETH can capture greater value and the overall market cap increases, Ether becomes more secure. And a safer Ether can drive it to become a public chain that carries a larger volume of assets. If this situation can be formed, Ether has the potential to become a super public chain.

At present, it is the best time for other public chains to bend and overtake, whether it is the data king Coinan smart chain or Polkadot, which has a huge project growth rate, all are benchmarking Ether to expand their own ecology.

IV. Whether consensus splitting will happen in ETH 2.0

Before discussing this issue, let’s talk about Ether and Ether Classic. In the early years, when Ether suffered from hacking and huge losses, V-God proposed the idea of a hard fork. This split was a technical one, with two different competing ideas that determined two completely different directions of development. etH, with the support of V God and other core teams, embarked on a path where the ethereum foundation made and developed core blockchain decisions and the community participated together. ETC, on the other hand, continues to adhere to the idea that both blockchain records and contracts are unmodifiable and can only run irreversible smart contracts.

ETH is indeed better developed than ETC in its current form, but we can’t dismiss ETC in its entirety. this is the charm of blockchain, the value and prospect of the project are built on the basis of consensus. The possibility of consensus splitting in ETH2.0 stage 0 and stage 1 is unlikely, as these two stages are equivalent to laying the foundation, while after stage 2 and stage 3, different design concepts will collide and clash, and the possibility of forming two or more kinds of consensus will become larger. So ETH 2.0 has the highest possibility of consensus splitting at this stage.

The shift from PoW workload consensus mechanism to CPos consensus mechanism can improve the efficiency of the whole Ethernet network and also attract more participants. This transformation process will definitely generate new concepts, new ideas. As for whether the split will be successful, it is impossible to say at the moment. After all, the source of value of blockchain is the consensus of most people, and this consensus will translate into participation and hold up a greater value.

V. Conclusion

Before ETH 2.0 is mature, Polkadot, BSC and other public chains are also raging and ready to shake the status of Ether, and Layer 2 solution will be the solution to the problems faced by the huge application system of Ether. Rollup series, which advocates security and sustainability, will be relatively more widely used. Rollup series solutions also have the opportunity to enhance its throughput on ETH 2.0, while the demand for state channels, side chains, Plasma and Validum still exists for scenarios with not so high security requirements. All in all, Layer 2 track has the potential to give birth to very large scale projects, stay tuned and seize the opportunity.

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