A Layer 2 blockchain: what is it?
The enhancement of blockchain systems is typically at the center of the concept of layer 2 blockchains. Does the creation of fresh, autonomous blockchain systems entail layer 2 solutions?
It’s critical to look for straightforward explanations of blockchain layers instead of convoluted viewpoints. As the supplementary protocol, the layer 2 protocols operate across another blockchain system. The base layer and the layer 1 blockchain have no bearing on layer 2 protocols. The secondary protocols provide transaction verification while reducing the workload carried out by the base layer.
The straightforward answer to the question “What is a Layer 2 Blockchain?” provides a complete picture of their role in expediting blockchain operations. The reduced burden on the layer 1 blockchain allows for speedier transaction processing. As a consequence, layer 2 protocols enable the system to accommodate a large number of users. Why was it necessary to develop layer 2 protocols in the first place?
Layer 2 blockchains typically use information rollup to accelerate payment confirmation. Many transactions are validated here, then bundled up into bunches and delivered to layer 1 for storage. Furthermore, various layer 2 systems employ a variety of rollup approaches. In this sense, optimistic rollups and zero-knowledge (ZK) rollups are two of the most prevalent strategies.
Transactional information is analyzed by zero-knowledge solutions, which then bundle them up into batches and transfer them to the main layer for preservation. The term “zero-knowledge” refers to the fact that they also provide cryptographic certificates to verify the veracity of transaction records without disclosing any data from the participants in the operation.
Optimistic rollups act similarly but do not produce vouchers to demonstrate the integrity of the information. Rather, they use a waiting time that allows network members to verify transactions while assuming that all information is accurate. The transaction can be undone if any information is shown to be inaccurate. The information is then put into the ledger if it all appears to be accurate.
What Does a Blockchain Layer 2 Protocol Mean ?
Every system must change to meet the changing needs of users. Think about how the looks and functionalities of cellphones are always changing. The suitable basis for developing layer 2 protocols for blockchain systems was provided by the need for blockchain infrastructure to be improved. What comes to mind when you hear the term “blockchain”? The straightforward response would draw attention to the fact that layer 2 protocols coexist with layer 1 networks or the primary network.
Naturally, one might ask why layer 2 protocols even started to exist. You may discover the justifications for establishing layer 2 blockchain protocols and networks from the debate that follows. Along with the well-known layer 2 protocols, you may learn more about the fundamentals of layer 2 protocols. The article also explores the advantages of layer 2 protocols and provides a forecast for their future.
Why do we need Layer 2 Protocols?
You may discover the precise causes of well-known layer 2 blockchain projects’ success by reading reviews of those initiatives. The need for several procedures for validation and verification makes blockchain transactions sluggish. The amount of capacity on a network increases dramatically when the number of users on that network rises significantly.
These components of transaction validation are typically handled by the layer 1 blockchain. But on the other side, it impacts the blockchain network’s processing power and raises issues with scalability and consumer experience. By delegating some of the layer 1 blockchain’s responsibilities, the layer 2 blockchain might offer the necessary assistance.
The idea of layer 2 protocols would have appeared superfluous a few years ago. Blockchain systems have good user traffic management abilities and were mostly connected to cryptocurrency. On the other hand, during the past several years, the situation in the blockchain sector has evolved significantly.
Users are gravitating increasingly toward cryptocurrencies, while blockchain is slowly entering the conversation thanks to developments in Defi and NFTs. As a result of increasing users using a blockchain platform for various transactions, they are becoming crowded. Blockchain layer developers adjusted guarantee an accurate solution to the problems. For instance, the auxiliary blockchain could be able to aid with network congestion issues.
The features connected to lower transaction costs, no capacity constraints, and faster transaction times are the current significance of layer 2 blockchain initiatives. These benefits of layer 2 protocols enable the layer 1 blockchain platform to operate more effectively. Scalability, another for quick and economical processing transactions, is essential for developing blockchain technology
4 Common Blockchain Layer 2 Protocols
The layer 2 blockchain category’s discernible value benefits serve as important indicators for demonstrating their significance. With the growing usage of blockchain technology, layer 2 protocols must advance proportionately. An explanation of the popular layer 2 protocols might help clarify how they can be a significant turning point in the development of blockchain. Here is a list of the most common layer 2 protocols available today.
- Nested blockchain
- Sidechains
- Plasma chains
- State channels
- Rollups
Nested Blockchain
One of the earliest instances of layer 2 protocols in blockchain systems is nested blockchains. A primary chain and a few subordinate chains make up the framework of nested blockchains. A chain may easily work in conjunction with another chain because of the clever architecture of stacked blockchains. In this instance, the main chain manages the variables while working on task assignments. The subsidiary chains undertake various main chain operations and provide reports for authorization and criticism.
Sidechains
One of the most frequently mentioned terms in conversations about layer 2 blockchain systems and protocols is “sidechains.” As the name implies, it uses a two-way anchor to link a subsidiary blockchain to the main chain. Consider a forest, where the forest is the main chain and the trees are the subsidiary chains. Managing a sizable volume of activities is the main goal of sidechains. A sidechain may help the main chain in the blockchain systems’ validation of various operations. As a consequence, the main chain has enough time to address security-related problems.
Plasma chains
Plasma chains also produce transaction records and get their acceptance method. A condensed version of each block is published to an Ethereum smart contract at predetermined intervals.
State Channels
State channels, which enable entities to interact directly on the blockchain system, are the next item on the layer 2 blockchain list. State channels make it possible to complete a transaction without considering the main chains. Miners might waste considerable time on confirmation as a result, resulting in increased processing speeds.
State channels leverage smart contracts instead of relying on layer 1 blockchain-based confirmation. The state channels make sure that the resultant state is stored on the primary layer when an operation has been properly completed. Due to the ledger’s public accessibility, the documenting of the ultimate transaction records on it creates risks.
Rollups
Without including rollups, the table of layer 2 blockchain initiatives would be lacking. Layer 2 protocols called rollups have the ability to do calculations beyond the main chain. After a predetermined amount of time, the transmission of transaction records takes place, supporting record preservation.
Rollups can also assist in payment processing without causing any disruptions in the substrate surface. Rollups may therefore simply guarantee increased throughput for blockchain operations while also guaranteeing cost savings. Rollups come in two basic varieties: optimistic rollups and zero-knowledge rollups.
Benefits of layer 2 protocols
The advantages made possible by layer 2 protocols would also be included in the discussion of blockchain layers. Here is a list of the benefits layer 2 protocols offer in the current blockchain environment.
- Greater safety
- Enhance scalability
- Lessening of transactional fee
Greater Safety
The guarantee of enhanced security is the main benefit of layer 2 blockchain systems. To provide flexibility and scalability, layer 1 blockchain systems typically need to redesign their base layer protocol. By adding blocks to the chain network and accelerating the validation of new blocks, layer 1 networks can grow in size. Blockchain layer 2 protocols aid in preventing issues brought on by modifications to the design of the blockchain. Layer 2 solutions adhere to the fundamental blockchain level, preventing any modifications to the base layer or fundamental protocol.
Enhancing Scalability
The second significant benefit of layer 2 protocols is the potential for enhancing scalability. Expandable prospects are facilitated by the increased throughput that layer 2 protocols have been intended to provide. Higher maximum throughput can make it easier to scale blockchain technology and provide a good user experience.
Lessening of transaction fees
Another significant issue with the traditional blockchain networks is resolved by layer 2 protocols. In a blockchain system, miners are in charge of confirming contracts, and they do this by using the blockchain’s cryptographic techniques.
The standard procedure included demands for enormous computer resources as users joined the blockchain network. The use of layer 2 protocols has helped to lower the amount of computing power needed for transaction validation. Thus, layer 2 blockchain initiatives can reduce the management fees on blockchain systems.
Even while Bitcoin and Ethereum formerly controlled a sizable portion of the cryptocurrency and blockchain sector, other blockchain systems are emerging with important advantages and use cases. Several Defi ecosystems and decentralized apps are developing in the blockchain world. To meet the needs that would result from the development of the blockchain environment, layer 2 solutions might be helpful.
Scaling methods at Layer 2
Layer 2 blockchain operates on the native stack to make it more efficient. By shifting some of the operational load from Level 1 blockchain to some other system design, Layer 2 successfully offloads operations.
The Layer 2 blockchain takes up the computational burden after that, reporting to Layer 1 for result finalization. Network bandwidth is decreased since this nearby auxiliary design covers the majority of the computational load. As a result, the Layer 1 blockchain is less crowded and more flexible.
The capability of layer 1 systems is increased by layer 2 networks. This may be done to improve programmability, lower transaction costs, or boost the performance of the layer 1 network. For instance, it is becoming more typical for application developers to give their consumers the possibility to communicate with a layer 2 network, such as Polygon, to reduce their customers’ costs and session delays on Ethereum, where gas rates may be very volatile and transaction times sluggish.
Abilities of layer 2 blockchain
Every layer 2 system will have a scaling mechanism or method to translate events back to its layer 1, just as Layer 1 systems have diverse ways to an agreement. For example, implementing zero-knowledge rollups is an often-debated layer 2 scaling option. The concept is that a distributed parallel orders and processes transactions and then offers statistical evidence that they have handled the transactions equitably.
The Platform, Polygon, and Stark net are a few instances of layer two scaling methods. The bulk of layer two scaling options rely on cryptography algorithms. I suggest this site for information on the cryptography underlying zero-knowledge demonstrations. The washed explanation of what occurs is that a validator develops formal proof to support the accuracy of certain knowledge.
- Scaling the lighting system using two-party multi-signature pathways
- Scaling with Zero-Knowledge Changes are coming in Stark net
- Committed side chains to polygons and use optimistic rollups
Keep in mind that only layer 1 has scaling issues and requires scaling solutions. Layer 2 scaling is not necessary for networks such as Hedera that scale at the network level due to their high native speeds.
What distinguishes Layer 1 from Layer 2 Blockchain Solutions?
| Layer 1 | Layer 2 |
| The core blockchain technology’s underpinning is referred to as Layer-1. |
The overlaying Layer-2 system, on the other hand, goes on top of the underlying blockchain. |
| Modifications to the blockchain channel’s basic protocol that increase durability are known as layer 1 scaling options. |
Layer 2 scaling options leverage off-chain applications or connections to increase flexibility. |
| Scalability can be facilitated by changes to the fundamental protocol, such as larger block sizes or additional consensus processes. |
Off-chain remedies by splitting out the effort of ordering and money transfers, scalability is improved. |
| Protocol enhancements through agreement Block size significant changes to sharding |
State connections on nested blockchain |
| Consensus protocol improvementsShardingChanges in block sizes | Nested blockchain state channelsSidechain |
| On Layer 1 blockchain, mining and transactions fluctuate from day to day, although they are typically between $50 and $125. (USD). | Layer 2 blockchain, minting, and transactions cost about $0.05, which is 2,000 times less than their Layer 1 equivalents. |
