What are the next generation L2s? A detailed explanation of Scroll, Aztec, Immutable X, Polygon zkEVM

Ethereum’s Layer 2 (L2) ecosystem continues to grow rapidly. The total value locked (TVL) in the 22 second tiers is now over $4.36 billion, an increase of 1194% from a year ago. Where there is growth, there is competition. As staking increases, so does competition within the L2 ecosystem.

What are the next generation L2s? A detailed explanation of Scroll, Aztec, Immutable X, Polygon zkEVM

To date, much of the discussion around L2 has focused on the “Big Four Rollups,” which include Optimistic Rollups (ORU) and Arbitrum, which are live and have rapidly growing user and developer bases. The Big Four Rollups also include zk-rollups (ZKRs) and StarkNet. While excellent, neither received the same attention as ORU (more on that later).

However, there are some L2s waiting to be disrupted, albeit little known at the moment. These networks bring unique design choices and capabilities, while some are highly specialized, and for some specific use cases, let’s take a look at what the next generation of L2 has to offer.


What are the next generation L2s? A detailed explanation of Scroll, Aztec, Immutable X, Polygon zkEVM

Fuel is unique in that it uses its own custom virtual machine, Fuel VM, with smart contracts written in Sway. This means that unlike most L2s, Fuel is not compatible with EVM, which may hinder its adoption.

Fuel also differentiates itself by using the same UTXO model as Bitcoin, rather than the traditional account-based model used by Ethereum and L2. These unique design choices give Fuel high performance because the network is able to validate multiple transactions in parallel, rather than serially (one at a time).

Compared to other L2s, Fuel also has a better user experience. Unlike traditional Optimistic Rollups, which require a 7-day withdrawal time, users on Fuel can use Atomic Swaps to get back to the Ethereum mainnet in minutes. Additionally, traders can pay gas fees in any token, not just ETH. As with any L2, the network must still purchase Ethereum block space to validate.

Fuel V1 launched in December 2020, and the developers have recently shifted their focus to Fuel V2. The Fuel Labs team recently launched SwaySwap, a decentralized exchange on Devnet. Uniquely, the assets on SwaySwap are completely native to Fuel, which means they inherit the same functionality as native assets like ETH on Ethereum.

While their lack of EVM compatibility may make it slower to grow, Fuel’s capabilities and throughput relative to other ORUs should help it attract developers and expand usage in the long run.


What are the next generation L2s? A detailed explanation of Scroll, Aztec, Immutable X, Polygon zkEVM

Scroll is a zk-rollup (ZKR) that develops zkEVM. zkEVM has the potential to fundamentally change L2 and the entire blockchain scaling landscape.

Aside from the difficulty of implementing ZKR in production, a major barrier to adoption of the technology is its lack of EVM compatibility. While ZKRs perform better in terms of throughput and gas fees, the inability to easily integrate EVMs into zk-tech results in each ZKR having to build unique developer tools and infrastructure from scratch.

This is why zkEVM is considered by many to be the “end game” for L2 scaling, as it allows ZKR to inherit the network effects of EVM while maintaining the same high level of performance.

While other competitors such as zkSync and Polygon are developing zkEVM, one factor that may make Scroll competitive with these projects is that it aims to be EVM equivalent. This means that contracts deployed on the Ethereum mainnet can be ported to Scroll without any major changes to the codebase. This should help promote Scroll adoption as it greatly increases the ease with which projects migrate to the web.

Scroll is currently taking its first steps towards realizing this potential, as it recently announced plans to launch a pre-alpha testnet where users will be able to transact and try out individual applications.


What are the next generation L2s? A detailed explanation of Scroll, Aztec, Immutable X, Polygon zkEVM

Aztec is a privacy-focused zkRollup.

Aztec provides users with privacy protection through its unique transaction structure. While complex, at a high level, the architecture functions like a UTXO model and uses ZK proofs to transfer asset ownership while protecting the identities of any involved parties.

A major use case for Aztec to date has been private DeFi enabled through Aztec Connect.

Aztec Connect enables users to interact directly with smart contracts deployed on L1 from within L2. This means that users can inherit the privacy of Aztec, while also gaining the liquidity and composability of dapps on Ethereum. Additionally, Aztec users pay minimal gas fees despite interacting directly with L1, as gas fees are still batched and amortized across all traders, as with any Rollup. According to L2 Beat data, Aztec Connect currently has a total locked value of $3.12 million.

The most popular personal application built using Aztec technology is zkMoney, a transaction blocking service. zkMoney enables users to trade privately with various well-known L1 protocols such as Uniswap, Aave, Compound, Lido.

As more applications are built on the web and the value proposition of cheap private transactions becomes clearer, Aztec should continue to grow in this niche. However, it is worth mentioning that regulatory issues related to privacy projects may affect L2 in the short term.

Immutable X

What are the next generation L2s? A detailed explanation of Scroll, Aztec, Immutable X, Polygon zkEVM

Immutable X is Validium built with StarkEx.

Immutable X is considered a kind of Validium because transaction data is stored through an off-chain solution called the Data Availability Council, rather than being stored entirely on-chain. While this means that Immutable X increases the trust assumption relative to other Rollups that settle to Ethereum, it allows the network to significantly reduce transaction costs, with the network fully subsidizing transaction costs for end users.

Immutable X is governed by IMX tokens. In addition to these rights, IMX holders can stake their tokens to earn 20% transaction fees, as well as a 2% protocol fee that includes all secondary NFT transactions made on L2.

Immutable X is focused on gaming, building a number of high-profile projects on the web, such as NFT-based trading card game Gods Unchained and Illuvium, an auto-battler with 3A-quality graphics currently in private beta.

Illuvium recently landed a $3.3 million land sale on Immutable X, while L2 also has partnerships with the likes of Disney, Gamestop and Turner Sports.

These partnerships, along with the public releases of other highly anticipated games like Illuvium and Ember Sword and Guild of Guardians, seem poised to foster continued growth and adoption of Immutable X.

Polygon zkEVM

What are the next generation L2s? A detailed explanation of Scroll, Aztec, Immutable X, Polygon zkEVM

Polygon is developing a set of ZKRs, the most prominent of which is the Polygon zkEVM.

Similar to Scroll, Polygon’s zkEVM was revealed a day before launch, potentially changing the L2 landscape in a fundamental way.

Like its competitors, Polygon Rollup will be an EVM equivalent, enabling developers to deploy their L1 contracts onto L2 almost seamlessly. The zkEVM will also leverage the Plonky2 verification system developed by Polygon Zero, another ZKR that was introduced into the Polygon ecosystem following its $400 million acquisition of Mir. Plonky2 is able to verify extremely fast, reducing the time it takes for L2 transactions to reach the final stage.

zkEVM plans to launch its testnet sometime in the summer of 2022, with a mainnet deployment planned for early 2023.

Polygon has a significant developer and user base on its PoS chain, a large pool of in-house talent after acquiring other teams working on zk-tech (like Hermez), and a steady stream of partnerships. Polygon seems poised to be a force in the ZK ecosystem for the foreseeable future.

Multiple L2 worlds

In addition to Fuel, Scroll, Aztec, Immutable X, and Polygon’s zkEVM, there are many L2s that seem poised for growth in the coming months.

Fuel, Scroll, and Polygon’s zkEVMs are all general-purpose platforms that may lead to higher performance and a better developer experience relative to existing platforms, while Aztec and Immutable X continue to compete in their respective privacy and gaming niches execute in the market.

It’s unclear how they will play out and who will emerge as the winner. But it is more certain that we will live in a multi-L2 world for the foreseeable future.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/what-are-the-next-generation-l2s-a-detailed-explanation-of-scroll-aztec-immutable-x-polygon-zkevm/
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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