What is Layer 2

Ethereum Scaling Solutions

Ethereum is currently the platform with the most extensive ecosystem of smart contracts and decentralised applications (DApps), the largest amount of locked crypto assets, and the greatest transaction volume. As the cryptocurrency market has grown substantially, the scale of on-chain activities such as transfers and contract calls has increased correspondingly. However, even during periods of reduced market activity, users continue to face network congestion and elevated gas costs, which negatively impact user experience. The scalability challenges of Ethereum represent one of the most critical concerns for the community.

Ethereum scaling solutions can be categorised into two primary directions: Layer 1 (L1) and Layer 2 (L2).

Layer 1, also known as Ethereum 2.0, represents an on-chain upgrade that focuses on transitioning the underlying consensus mechanism from Proof of Work (PoW) to Proof of Stake (PoS), as well as implementing sharding mechanisms. Through these architectural changes, network nodes no longer need to store the entire contents of the blockchain and can utilise their computing power more efficiently, thereby expanding overall network capacity.

However, due to implementation complexity, the rollout of Ethereum 2.0 must proceed in stages over an extended period. With no definitive timeline for completion, Layer 2 scaling solutions have become the primary focus of market development.

Layer 2 represents an off-chain improvement solution that operates independently of the public Ethereum chain itself. All transactions are processed on the Layer 2 network, with Layer 1 utilised only when necessary. This approach enables the completion of large transaction volumes quickly and cost-effectively.

To illustrate this concept, if we compare Ethereum to a highway, Layer 2 functions as an elevated viaduct constructed above this highway, effectively diverting traffic from a congested blockchain.

Key Technologies of Layer 2

Technical solutions for Layer 2 networks have evolved considerably over time:

State Channel

The State Channel model operates similarly to Bitcoin's Lightning Network. In essence, both parties in a transaction establish an off-chain channel through which they can transfer value to one another. The final transaction result is only broadcast to the main chain after all relevant transactions are completed.

The Raiden Network represented the earliest State Channel implementation on Ethereum. However, as this solution had significant limitations and required both parties to maintain ongoing transactional relationships, its adoption has stalled.

Plasma

Plasma represents one of the earliest Layer 2 solutions proposed by Vitalik Buterin. It operates similarly to a sidechain, functioning independently of Ethereum whilst uploading all processed block hashes to the main blockchain contract for verification. This architecture enables hundreds or thousands of transactions to be processed simultaneously off-chain, with only a small amount of final transaction data (measured in dozens of bytes) being uploaded to the main chain.

However, a significant limitation of this approach is its dependency on the honesty of Plasma network nodes and the accuracy of data submitted to the main chain. To mitigate the risk of malicious actors, users must wait through a challenge period of 7-14 days before withdrawing their funds, which presents a considerable obstacle to practical implementation.

Rollups

Rollups represent the most prominent and favoured Layer 2 expansion method currently, with some industry participants arguing that Rollup success directly determines Ethereum's long-term sustainability.

Whilst Rollups process transactions on Layer 2, they record essential transaction data on Layer 1, including details such as sender, recipient, and amount. This approach provides greater security compared to Plasma.

The scalability advantage of recording transaction data on Layer 1 may seem counterintuitive. However, this is achieved through data compression techniques, utilising a tree structure within smart contracts to record account states whilst only storing transaction records. Signature verification occurs on the Layer 2 network, allowing the original data to be compressed before transmission to the main chain.

To address data consistency challenges, two distinct technical approaches have emerged: Optimistic Rollup and Zero-Knowledge (ZK) Rollup.

Optimistic Rollup operates similarly to Plasma. As the name suggests, it optimistically assumes all uploaded data is accurate and only challenges problematic submissions when disputes arise. Due to the time required to resolve potential disputes, users currently must wait approximately one week or longer to withdraw funds from Layer 2 Optimistic Rollup networks such as Optimism.

ZK Rollup employs zero-knowledge proof technology, with smart contracts verifying data accuracy by validating cryptographic proofs. This approach enables users to withdraw funds rapidly; however, its primary limitation is the requirement for substantial computational resources to generate zero-knowledge proofs. The zkSync project, which implements ZK Rollup technology, is currently deployed on the Ethereum main network.

Closing Thoughts

Rollups have emerged as the most mainstream Layer 2 scaling solution for Ethereum, with an increasing number of related Layer 2 network projects deployed across the ecosystem. Cross-chain bridges continue to emerge, facilitating interoperability between various blockchain networks. It is important to recognise that Layer 1 and Layer 2 solutions are not mutually exclusive; rather, they must complement each other in the future to enhance Ethereum's overall network processing capacity.

FAQ

What is layer 1, layer 2, and layer 3 crypto?

Layer 1是基础区块链（如比特币、以太坊），处理所有交易。Layer 2是扩展解决方案（如Lightning Network、Polygon），提高速度和降低费用。Layer 3是应用层，提供特定服务和用户界面。

What is layer 2 and layer 3?

Layer 2是构建在以太坊之上的扩展方案，通过减少主链交互来降低费用并提高速度。Layer 3则是Layer 2之上的应用层，进一步优化特定用例的性能和成本。两者共同形成多层区块链架构，提升整体网络效率。

What are layer 2 examples?

主要的Layer 2解决方案包括Arbitrum、Optimism、Polygon、StarkNet和zkSync。这些协议通过降低交易成本、提高交易速度来扩展以太坊网络容量，是当前主流的第二层扩展方案。

How does Layer 2 improve blockchain scalability?

Layer 2 通过在主链外处理交易来提高可扩展性。它批量处理大量交易，然后将汇总数据提交到主链，显著降低网络拥堵，提升交易速度，同时大幅降低交易费用。

What are the differences between Layer 2 solutions like Rollups and Sidechains?

Rollups 将交易数据发布到主链，继承其安全性；Sidechains 是独立区块链，有自己的验证者。Rollups 更安全但速度受限，Sidechains 更快但安全性依赖自身。

What are the risks and security considerations of using Layer 2 solutions?

Layer 2風險包括智能合約漏洞、跨鏈橋接安全、運營商集中化風險。使用者需驗證協議審計報告、選擇成熟方案、謹慎管理私鑰。大型平台層2解決方案已逐步完善安全標準。