Skip to content
memoDwarves Foundation

Research notes/Digital assets

Layer 2: scaling solutions for Ethereum

Explore Layer 2 solutions for Ethereum scaling, including rollups and their benefits. Learn how Layer 2 extends Ethereum's capabilities, reduces gas fees, and maintains security while improving transaction throughput and efficiency.

By baenv6 Dec 20222 min read

Written 3 years ago. Check versions before you rely on it.

What?

  • Ethereum scaling solutions
  • Separate blockchain
    • Extends Ethereum
    • Inherits the security guarantees of Ethereum
  • All user transactions on the Layer 2 can ultimately settle back to Layer 1
  • Ethereum also functions as a data availability layer for Layer 2s
    • Layer 2 will post their transactions data onto Ethereum
    • Rely on Ethereum for data availability
      • Used to get the state of Layer 2
      • Dispute transaction of Layer 2

Why?

Blockchain has 3 desirable properties

  • Decentralized
  • Secure
  • Scalable

"can only achieve 2 out of 3" - Blockchain trilemma

High demand -> Need to scale without sacrificing decentralization and security => Need Layer 2 to scale Blockchain that takes advantage of robust decentralized security of Layer 1

How?

  • Communicate with Layer 1 by submitting bundles of transactions
  • Layer 1 handles security, data availability, and decentralization
  • Layer 2 handles scaling by computing and sending finalized proofs to Layer 1 -> Remove transaction loading.

Rollup

  • Preferred layer 2 scaling solution in Ethereum
  • Reduce gas fees by up to 100x compared to Layer 1
  • Rollup bundle ("roll up") hundreds of transactions into a Layer 1 transaction => Fee will be dived/distributed to all users (owners of these hundreds of transactions) -> Cheaper
    • For example:
      • 1 Layer 1 transaction is paid for 1eth as fees
      • 100 Layer 2 transactions rolled up in 1 Layer 1 transaction are also paid for 1eth. So 1 Layer 2 transaction is just only needed 0.01 eth to execute.
  • Rollup is executed outside Layer 1 (in Layer 2), but finalized result (proof) is submitted to Layer 1 => and can be secured by Layer 1 security mechanisms.
  • Have 2 approaches (different on posting transaction data to L1):
    • Optimistic
    • ZK Rollups aka Zero-knowledge Rollups
  • Update (2026): since the Dencun upgrade in March 2024, rollups can post their data in blobs, "a cheaper way" to post data to Ethereum than the older calldata. ethereum.org now calls layer 2 rollups the primary scaling technique.

Example

  • Arbitrum One
  • Optimism (listed on ethereum.org as OP Mainnet)
  • Boba Network

References