Ready Layer Two - The Daily Gwei #11

Before we dive into today’s issue, I just wanted to quickly mention that I’ve launched a Gitcoin Grant for this newsletter! If you’d like to support my on-going work to bring you a fresh Ethereum-packed newsletter every week day, feel free to make a donation here (and don’t forget to check out all the other projects on Gitcoin too)!

It’s a well known fact that Ethereum (and blockchains in general) currently don’t scale very well. So, how do we fix this? Well, Ethereum is going to be implementing sharding as part of the eth2 roadmap but that’s still a while away. In the meantime, researchers and developers are creating/refining so called “layer 2” or “L2” scaling technology on eth1. Let’s dive in.

First, some history. Layer 2 research and development has been happening on Ethereum for a few years now with many attempts and failures to launch as it is an evolving technology. You’ve probably heard a lot about Plasma over the years as well as State Channels and are wondering what happened with them. Well, Plasma has been iterated on a lot since the first version was put forward by Vitalik on and we now have working versions of this on mainnet (the most notable being from OMG Network - formerly known as OmiseGo).

The concept of State Channels has been for a while (it’s the technology that the Lightning Network on Bitcoin uses) and is currently on Ethereum in the form of the Raiden Network, Celer Network and more.

Lately though, the concept of zkRollups and Optimistic Rollups has been making waves in the Ethereum community and we’ve seen many projects begin deploying this technology to mainnet over the last few months. The “rollup” technology is similar to Plasma in many ways.

Here is a list of scaling tech that has been released/demo’d/announced over the last few months:

This excellent table from The Matter Labs gives a great breakdown of each of the different scaling solutions currently being worked on and deployed to Ethereum. Do keep in mind though that this table may contain inaccurate and/or incomplete information and is always evolving!


So, what can you use right now that is built on this tech? A lot, actually! You can use Loopring’s scalable DEX here, DeversiFi’s DEX here, use Matter Labs’ zkSync here to send ETH and ERC20 tokens instantly. For developers, you can start tinkering with Fuel Lab’s tech here or Aztec Protocol’s tech here.

To those who don’t follow these developments closely, this might feel like an “overnight success” to you since a lot of these releases have come at once. The reality is that it’s all the result of years of research and development from some of the smartest minds working in the Ethereum space. There’s still a long way to go but it feels like we’re seeing real scalability that uses can get actual value out of finally come to Ethereum.

Don’t forget that you can donate to all of the scalability-related projects on Gitcoin - a little bit goes a long way during the current matching round!

Have a weekend everyone!

All information presented above is for educational purposes only and should not be taken as investment advice.

Disclaimer: I currently hold positions of LRC and NEC.

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