Cryptocurrencies News Today

The exponential growth of the cryptocurrency ecosystem, including areas like decentralized finance (DeFi), non-fungible tokens (NFTs), and play-to-earn (P2E) games, has led to increased scalability problems in legacy blockchains, primarily Ethereum. Owing to its lion’s share of the DeFi and NFT market, the Ethereum blockchain is battling extreme congestion on its network, leading to performance bottlenecks, low throughputs, and increased gas fees. While the recent London Fork upgrade has helped Ethereum alleviate some pressure and address fees and transaction speeds, deploying all the features suggested in the recent Ethereum Improvement Proposal will take a considerable amount of effort. This is where layer 2 scaling solutions come to the rescue, establishing themselves as the immediate solution to the pressing need for more practical scalability. Layer 2 scaling solutions encompass all secondary frameworks, solutions, and protocols built atop an existing blockchain network. The primary goal of layer 2 scaling solutions is to solve the scaling difficulties and slow transaction speed faced by legacy blockchain networks. In a broader sense, layer 2 solutions offer an infrastructure where all transactions and processes can occur independently of the main chain (layer 1) while inheriting the underlying features of the main chain. At present, the significant categories of layer 2 scaling solutions include side chains, plasma chains, state channels, payment channels, optimistic rollups, ZK-rollups, validium, and aggregators. Nevertheless, despite the numerous benefits, each solution also contains drawbacks. Promising Layer 2 Scaling Solutions Addressing Ethereum’s Dilemma Several promising blockchain projects use these solutions to ensure full scalability on Ethereum, Bitcoin, and other networks. Since DApps and NFTs are primarily run through Ethereum, most existing layer 2 solutions deliver interoperability while overcoming the current network hurdles. ImmutableX is one such project and the first layer 2 scaling solution for NFTs on Ethereum. As a layer 2 platform, ImmutableX addresses the critical issues of cost, scalability, and capacity the Ethereum network faces. By using StarkWare’s ZK-rollup technology, the platform ensures super fast transaction speeds (over 9000 per second) and zero gas fees while maintaining Ethereum’s security. Additionally, ImmutableX has launched its ImmutableX Marketplace, establishing itself as the first NFT marketplace to offer free minting and trading of NFTs. Ethereum's high gas fees have hampered the development and adoption of specific technologies within its ecosystem. The blockchain's growth is being affected, as users embrace other alternatives. To solve this critical problem of the Ethereum network, Harmony offers a promising layer 2 solution to enable decentralized apps (DApps) to harness the full power of the Ethereum ecosystem. Harmony’s Ethereum-compatible smart contract platform allows cross-chain asset transfers between Ethereum, Binance, and other chains. Through Optimistic rollups and ZK-rollups, Harmony mainnet transactions are resolved in two seconds and are 100 times less expensive than Ethereum. The platform is fully compatible with Ethereum Virtual Machine (EVM) and Ethereum-based tools like Metamask, Ether.js, and Remix, making it a formidable option for developers building apps on Ethereum while circumventing the common hurdles the network encounters. Layer 2 For Mobile And IoT Devices Blockchain technology is all about decentralization. However, as ecosystems grew, almost all existing blockchain governance became centralized to a large extent. Depending on the total number of staked tokens, only a handful of prominent players and business entities ended up controlling the majority of the underlying mechanisms. Participating in securing and building a chain requires high-end devices. Besides, each chain has its own specialized user classes like miners, block producers, block validators, nodes, and more. As a result, it gets complicated for an average user to become a full network participant, putting the concept of ‘decentralization’ in question. To address this and bring “true decentralization” to the blockchain universe, Minima, a Switzerland and UK-based blockchain startup, will soon launch its protocol that allows running blockchain nodes on Android smartphones and IoT devices. Minima is an ultra-lean layer 1 (base layer) protocol that is secure, resilient, scalable, and inclusive. By allowing anyone to become a full network participant, Minima offers a genuinely autonomous and decentralized ecosystem. On Layer 1 there is an upper bound limit on the number of possible transactions per second, but on Layer 2 there is no limit. To ensure scalability, the team behind Minima has developed a layer 2 scaling solution called Maxima, which serves as the network’s transactional layer. Layer 1 has an upper bound on the number of possible transactions per second, but layer 2 does not. As a result of these differentiated layers, the blockchain offers significantly lowered transaction fees while simultaneously increasing the processing speed. Through its layer 2 solution, Minima simplifies and democratizes the process of transferring value and information, all while fostering an ecosystem that supports valuable use cases for users, developers, and enterprises alike.