Second-layer (layer 2 or L2) scalability solutions are considered the best tool for Ethereum to reach more users while being fully functional. However, a report highlights that they still face some challenges, such as certain complications in user experience, lack of interoperability with each other and competition with other sidechains.

According to the report Second-layer scalability solutions: a framework for comparison, published by The Block, these types of tools pose some difficulties for users compared to those operating on Ethereum’s main layer (layer 1 or L1).

There are several challenges to be addressed, but the first one is related to the user experience. The first that stand out are the delays for withdrawals in the case of optimistic and ZK (Zero-Knowledge) rollups. Rollups are, precisely, a scalability solution that “rolls up” transactions in a second layer and then brings them all together to the main Ethereum layer.

While they allow trading with lower commission costs, the main obstacle to rollups is delays in withdrawing funds from them, the report says. They also require users to make multiple transactions.

On the other hand, several second-layer solutions demand the use of bridges to deposit cryptoassets into them for trading. Currently, as reported by CryptoNews, some cryptocurrency exchanges started offering direct withdrawals without the use of bridges, which not only takes time, but can also mean extra expense.

Other challenges for Ethereum’s second-layer scalability solutions.

The second type of problem highlighted by the report is the inability to interact with each other. In Ethereum, this amounts to any user being able to develop new products and services based on existing ones.

This interoperability will allow users to “transact between applications that operate under the same security framework, on a blockchain, and several times in a single block”.. At the moment, switching between different L1 and L2 solutions is “difficult for users in the short-to-medium-term”.

The example cited in the text is Uniswap, which supports four networks: the Ethereum core layer, Polygon, and the Arbitrum and Optimism rollups. This has the advantage of reducing commissions when trading, but because they are not interlinked, it can fragment the user’s liquidity and thus complicate their operations.

Finally, the third obstacle for L2 scalability solutions on Ethereum is competition with other L1 networks and sidechains (sidechains). In this regard, it is argued that reduced fees from lower network activity during bear markets may lead to fewer users migrating to L2s.

For example, there are competing Ethereum networks such as Solana and Avalanche that develop products in their own ecosystems trying to solve some limitations of the main layer of this network. To do so, they appeal to faster or cheaper transactions, among other features.

Second-layer scalability solutions are emerging as the future of Ethereum.

Beyond all that has been commented, these L2 solutions of Ethereum seem to be the “candidates” to enable the scalability of the network in the future. 

In the aforementioned report, other factors that may contribute to its growth and adoption are detailed, including new incentive programs and token launches, as well as “continued investments and improvements” in second-layer technologies by the entities that develop them.

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *