No, I am not talking about the money you pay in the gas station after getting a refill, in fact, you should never avoid paying that unless you want to go to jail for stealing! Gas fees, Gwei or Nanoeth, are the fees Ethereum users must pay in order to perform any transaction. Gas fees can get quite high when there are a lot of transactions to be processed.
Ethereum was processing approximately 1.19 million transactions per day as of January 2022. Unfortunately, Ethereum can only process 7 to 11 transactions per second. This means that transactions can be relatively slow, so apparently, you pay high gas fees for the same transaction speed, what a bummer.
We can however opt for other faster chains such as Solana, Bsc, or Fantom, which are all very good options. However, if you are like me, you just can’t do away with the leading smart contract platform you grew to love, Ethereum, what a toxic relationship.
Yet again, there is a solution to this modern-day menace, Layer 2 Rollups, and this solution has been in development since 2017. Wait, hold up, if this solution has been around all this time, why hasn’t everyone hopped into it? Well, according to Coinmarketcap, “there are some tradeoffs to Ethereum on-chain that currently prevent layer 2s from going mainstream”.
However, as you would expect with modern-day technology, there is always a way to go around the iceberg. In today’s article, I go through layer 2, explaining the types of layer 2, their differences, and finally, I will list out some layer 2 platforms that can enable you to use layer 2 and enjoy its spoils, if you were not paying attention, there are low fees and free transactions.
Layer 2 roll-ups, in the words of Werner Vermaak, are solutions used in the Ethereum ecosystem, that outsource the execution of transactions outside the main blockchain but retain some data per transaction on-chain. This prevents network congestion and also increases the speed of confirmation. There are 2 types of roll-ups; The Optimistic roll-ups and Zero-knowledge roll-ups.
The Optimistic roll-ups offer improvements in scalability since it does not do any computation by default. Since computation, which is the slow, expensive part of using Ethereum, is not done, Optimistic roll-ups can offer up to 10-100x improvements in scalability depending on the transaction. However, the use of fraud proofs puts Zero-knowledge roll-ups ahead of it, when it comes to confirmation speed.
Zero-knowledge roll-ups reduce gas cost and increase confirmation speed by using transfer batches in transactions from layer 1 to 2 and creating validity proof for every batch. There are practically no delays when using zero-knowledge or ZK roll-ups.
Here are some layer 2 platforms you can use to access layer 2 and have lower gas fees and faster transactions.
StarkEX: Developed by Stackware, is a ZK roll-up scaling protocol. It supports ERC-20 and ERC-271 tokens, which allows NFT marketplaces to run on Layer 2.
Optimism: This is one of the leading Optimistic roll-up technologies, it features a network layer designed to scale smart contracts while having the security of the Ethereum chain.
Polygon: This is another type of layer 2 platforms. It offers both a scaling solution and a framework for interoperability with other layers 2 protocols. What makes polygon stand out is that it has its own native token called, MATIC. This token is used as an alternative to Gwei(ETH) to pay for gas.
Other layer 2 roll-ups include; Arbitum and Loopring. I personally recommend you use polygon because it is easier to get started with.
If you are a crypto trader, you probably deal with ETH and you probably are tired of paying high gas fees.
Now, do you still need a reason to start using Layer 2’s?