Ethereum has been the focus of encryption for quite some time, and for good reason. As the popularity of the second largest blockchain network continues to grow, there is an urgent need to improve performance and scalability. The Ethereum network deals with some congestion issues, the last of which was transaction fees for transactions in June 2020.
Even web blocking increased the maximum allowable gas per block in the Ethereum blockchain, which allows more transactions to be processed, but also means that the blockchain size continues to grow – another scalability problem that the Ethereum 2.0 division seeks to solve.
As previously mentioned by the Cointelegraph, Tether (USDT) is the largest gas consumer on the network, and this trend may be exacerbated by transitions from other blockchains to Ethereum, such as the recent conversion of $ 300 million from TRC-20 USDT to ERC- $ 20. After Tether there is other popular DeFi applications are among the largest gas consumers on the network, with some symbols in these applications surpassing bitcoins in price lists.
Ethereum 2.0 coming out, not close enough
As the DeFi ecosystem continues to grow, there remains an urgent need to expand solutions to ensure network usability. Ethereum 2.0 is seen as a long-term solution that can stabilize the network, and the long-awaited update will be released this summer.
Although the first release of Ethereum 2.0 is a significant event, no immediate changes will occur. The first iteration will serve as a testing ground for what will eventually become the only Ethereum. It is estimated that this change will take one to two years. In fact, Ethereum founder Vitalik Buterin recently acknowledged that the team has reduced the time it takes to develop the sharing features and demonstrate the benefits that characterize Ethereum 2.0.
Thus, there is a need for an alternative alternative that can compete, coexist or move forward compared to Ethereum 2.0. So what are some of these solutions and do they actually work? Although some projects, such as plasma, have been abandoned, there are other independent projects that can help Ethereum now, and some rely on technologies that are now destroying the plasma again, said John Jordan, communications director at DappRadar, Cointelegraph:
Issues such as gas prices can be resolved without Eth 2.0. There are many running and affordable Level 2 solutions — Matic, Skale Labs, OMG Network, and others — that will solve these problems to some extent. Dapp developers are actively integrating these technologies or trying to create their own. ”
Layer 2 Network: The Basics
Tier 2 solutions are aimed at providing all or most of their basic functionality and security without using them or, more precisely, using them differently. This is beneficial in the short term, as it facilitates the overload of the Ethereum network and in the long term keeps the blockchain free from “unnecessary” transaction history.
The two-layer solution is complex and difficult to develop, as it passes the fine line between safety and comfort. Blockchain networks are safe because every transaction is registered in an immutable register, but these decisions are beyond the scope of this limitation. Although this may seem counterintuitive, “maximum” security is not always necessary. For example, repeat transactions between trusted parties can be performed through the network at other levels, and this is only the beginning.
The concept of Tier 2 networks is not new and is not limited to Ethereum. Bitcoin itself is not used to the problems of overload and scalability. Although the last “emergency” of 2018 was handled by SegWit, a reliable fork that changed Bitcoin's rules and allowed multiple transactions to be entered into each block, level 2 solutions have been around for many years and can be widely used in the future.
RSK and the Lightning Network are examples of these solutions. Today, there are several independent projects that use the same concept to provide immediate solutions to the scalability problems of Ethereum, as well as improve the ecosystem for the prosperity of the DeFi industry.
The Matic Network is based on the Plasma project and provides an alternative block chain to confirm interest based on a modified version of the technology. It uses a decentralized network of stakeholders that placed Matic as milestones between the two blocks. This method provides a cheaper, faster, and higher volume of transactions per second, or TPS, on another network, which can then be installed on the Ethereum network.