Ethereum is ranked the second largest in the cryptocurrency market after bitcoin. The year 2021 was the best performing year for Ethereum (ETH), the year Ethereum achieved great success, with its main driver being the diverse ecosystem for DeFi platforms built by the network. DeFi is a platform with which it is possible to earn interest, borrow, lend, and much more, which is attracting a lot of users towards it. The only consequence of this widespread adoption is that the number of transactions made with Ethereum today has skyrocketed, slowing down the network as well as driving up transaction fees. While they’re some straightforward solutions to this issue, the most straightforward ones might sacrifice security and decentralisation in favour of reducing transaction fees. The Layer 2 project may serve as a crucial bridge for ETH’s future. If you are looking to earn profits by trading Bitcoin, you must choose the right trading tools like this platform.
Layer 1 and Layer 2 on Ethereum
Layer 1 underlying is the term being used for blockchain as well as the changes taking place in it are also known as Layer 1 solutions. For example, ethereum can be scaled by increasing the block size, and this includes the number of transactions that can be verified per block. Furthermore, this would centralise the network to only the wealthiest miners with the finest equipment, making mining unaffordable. As a result, the network may be open to malicious attacks because only a select several may have the authority to verify the chain. The Ethereum (ETH) community doesn’t wish to implement this Layer 1 upgrade since doing so will compromise network security and decentralisation. Layer 2 solution is considered as a top network and the same if we talk about Layer 1 then there is no need to make any changes in it.
Layer 2 solutions can greatly speed up transactions while retaining the Layer 1 network’s security and consensus mechanism. Although some Layer 2 projects can improve this to 4,000 transactions per second, ETH Layer 1 can only manage about 10 to 15 transactions per second. The Layer 1 ETH network will continue to receive scalability updates for years to come, and Layer 2 will stop decentralised applications (dApps) from leaving ETH shortly.
How Does the working execute for Layer 2?
As layer 2 core functions are to ensure decentralization and enhance the security of Ethereum by providing transactional pockets. To ensure the security of layer 2 . Therefore the need to change the layer 1 protocol on Ethereum is unnecessary. In simple words, the core function of layer 1 is to provide security, data availability, and decentralization whereas layer 2 is here for decreasing the transaction load from layer 1 and declaring the proof of completion of layer 1. Hence everything on the network becomes more scalable.
Rollup
The conclusion comes at last in very simple words: execute the transactions at layer 2 and forward this data to layer 1. Similarly, roll-up merges 100 transactions into a single transaction with a speedy approach and at very low prices without considering its higher rates and without forgetting about the profit from Ethereum security.
zkRollups (ZKRs)
zkRollups has proven to be the most powerful solution for using zero-knowledge (ZK) proofs. One can know what it is by zero-knowledge proof. The introduction of a zkRollups relayer suggests that it integrates a ZK-SNARK with which to validate batches with transactions. zkRollups also have a downside that it would require intensive computation and transactions would need to have specific proof to do their job properly. Direct transfers and other transactions have so far only had a modest quantity of supporting evidence. Hence, until the appropriate PoS (proof-of-stake) is established, zkRollups won’t be interoperable with smart contracts and DeFi (Decentralized finance) platforms.
