Layer Choo Choo - The Daily Gwei #112
Forgive me for the awful title of today's piece, friends.
You missed a pretty big announcement about layer 2 yesterday, didn’t you? You were too busy staring at the price charts - don’t try to hide it! Admittedly, I spent most of the day staring at the charts too - how couldn’t I with the sentiment pendulum swinging back so fast?
Okay enough about the markets - today’s piece will focus on Arbiswap - a live port of Uniswap to the Arbitrum rollup testnet on layer 2.
This isn’t just an announcement - this is a fully fledged Uniswap protocol system running on top of layer 2 that leads to a 55x cost reduction (and that’s just the beginning). How does this look in practice? Well, it’s explained succinctly by the team:
Swapping tokens on Layer 1 Uniswap costs about 109,500 gas; at 10 million gas per block and roughly 1 block per 13 seconds. This means Ethereum layer 1 can handle, at absolute most, 7 Uniswap-swaps per second.
Enter Arbiswap: with the Arbiswap Rollup chain at full-capacity, the Layer 1 gas cost reduces to 1965 gas per swap; this means L1 can handle up to 390 swaps per second, a 55x gain in gas efficiency for the base layer!
In addition to this, the team released a ‘token bridge’ which allows users to transfer tokens from Ethereum into the rollup and back out again in a user-friendly way. This is obviously critical for onboarding and I’m glad that the team prioritized this feature - we’re not going to get anyone onto layer 2 if there’s friction to do so! Of course, other teams building layer 2 solutions also have this nice UI/UX experience and honestly I’m surprised that it’s this good already - kudos to the layer 2 builders!
This release from Offchain Labs just continues the strong and steady march of layer 2 on Ethereum that we’ve been over the last few months. I know I beat the drum a lot on this topic, but I’m just so excited to see this stuff come to mainnet so quickly. I remember when I first got into Ethereum in 2017 layer 2 solutions were being talked about but they were extremely primitive - seeing them live on mainnet is as exciting to me as seeing eth2 go live.
The next year in Ethereum development is going to be more exciting than the previous 6 years. Eth2 phase 0 and (hopefully) phase 1 going live, EIP-1559 going live on eth1, layer 2 solutions being delivered and seeing adoption, DeFi continuing to grow, the crypto bull market coming back - this is just a taste of what you have to look forward to!
Have a great weekend everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.