IOSG: Layer 2 is coming much faster than ETH2.0

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# Layer 2

, reprinted by Odaily with authorization.

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Interpretation of the second layer expansion plan of Ethereum

1. Plasma VS Rollup

Author: Jay Zhou, co-founder of the Loopring protocol

Under the DeFi boom, resources on the Ethereum chain are tight, and Gas fees have reached a new high. At present, Ethereum urgently needs to break the deadlock, but Ethereum 2.0 is still in the initial stage of exploration, and there is still a long way to go before it is actually launched. Before Ethereum 2.0 goes online, a more practical Layer 2 solution is expected to solve the scaling problem of Ethereum.

Layer 2 solutions are constantly updated and iterated. Currently, the main popular solutions for layer 2 expansion include: OMG, Plasma, Rollup (ZK Rollup and Optimistic rollup), and Validium. At present, it seems that Rollup is the most likely to be adopted, and the Ethereum Foundation and Vitalik himself have publicly supported it. Let's introduce the other three L2 solutions currently on the market in chronological order and compare their differences with Rollup.

The first is Plasma, which was jointly proposed by Vitalik Buterin and Joseph Poon in 2017. The community has placed high hopes on it, and it can be said to be the pioneer of the expansion research of Ethereum. And OMG Network V1 became the first Plasma solution to be implemented. The current Beta version can increase the TPS of Ethereum to 4000-transactions per second (theoretical 9000 transactions per second), while reducing transaction fees to about 1/3 of the current level.

In order to achieve better scalability, Plasma migrates both computing and data storage to the sub-chain, and only puts the processing results on the sub-chain on the Ethereum main chain for confirmation and notarization, which can greatly reduce the main chain. workload.

Because a large number of smart contracts have been moved from the main chain, if the main chain is only responsible for security issues such as node consensus and transaction dispute handling, then the transaction volume that a blockchain can accommodate will greatly increase. In this way, the capacity of the Ethereum network can be greatly expanded.

2. ZK Rollup VS Optimistic Rollup

Plasma is a side chain with non-custodial characteristics. Compared with general side chains, if any error occurs in the Plasma chain, the error can be detected, and the user can safely exit from the Plasma chain, preventing prevent attackers from causing any lasting damage.

A year after Plasma was born, a technology called Rollup surfaced. The biggest difference between the Rollup scheme and the Plasma scheme is that the former puts the transaction data on the chain, while Plasma just notarizes the data outside the chain on the Ethereum chain, which will lead to a data availability issue. , which makes the user experience of Plasma poor, and there is no way to truly be trustless.

So on the whole, compared with Plasma, Rollup's technology solves the problem of data availability most importantly. All transaction data is on the Ethereum chain, and the security can be at the same level as the Ethereum main chain.

Now the hottest Rollup expansion solution has been repeatedly recognized by Vitalik Buterin as his favorite Layer 2 expansion solution. Based on the concept of Rollup, multiple branches have been born, the most mainstream of which are ZK Rollup and Optimistic Rollup. The main difference between them is that the former uses zero-knowledge proofs, and the latter uses fraud proofs. In terms of performance, zkRollup (here mainly refers to zkSNARK, zkPlonk, etc.) has poor support for general-purpose smart contracts, so it is only suitable for token transfers in the short term, which is why it is very suitable for decentralized exchanges or support One of the reasons for payment transfer, while Optimistic Rollup supports the implementation of any smart contract logic, so it is very suitable for complex DeFi applications.

In terms of scalability, ZK Rollup performs better than Optimistic rollup. On Ethereum 1.0, ZK Rollup can handle up to 4000 TPS. Conservatively speaking, on Ethereum 2.0 (depending on ETH2.0 implementation details), the throughput can reach up to 100,000 TPS. This is already a huge achievement, comparable to Visa's TPS of 24,000.

Regarding safety, the Optimistic Rollup model is based on two assumptions:

1. At least 1 honest node out of n nodes executes all Optimistic Rollup transactions and submits fraud proofs when invalid state transitions are issued (also known as 99% fault-tolerant consensus).

2. Layer 1 network has strong resistance to censorship.

The ZK Rollup model is based on:

3. Validium VS Rollup

1. Layer 1 network has strong resistance to censorship.

In terms of delay, ZK Rollup is far superior to Optimistic Rollup. ZK Rollup only needs to prove that the transaction has been settled on the chain, but Optimistic Rollup needs to wait for a long challenge period (at least days) units), relying on fraud proofs to guarantee finality.

In general, the ZK Rollup and Optimistic Rollup schemes have their own trade-offs. From the perspective of simple ERC-20 token transactions, the ZK Rollup scheme is obviously superior.

Finally, let’s talk about the Validium used by StarkWare. Simply put, Validium is a zero-knowledge proof that combines Plasma and ZKP (Zero-Knowledge Proofs). It is a new scalability solution launched this year. The mechanism of Validium is very similar to ZK Rollup, the main difference is that the data availability in ZK Rollup is on the chain, while Validium relies on off-chain data availability solutions (need to trust the centralized service provider Do not be evil), the advantage is that better scalability can be achieved, such a choice can theoretically reach 20,000 TPS.

StarkWare not only puts transaction data off-chain (similar to Plasma), but also uses zero-knowledge proof to package off-chain transactions together. The zero-knowledge proof scheme they use is called zkSTARKs, which is a trustless A scheme for a trusted setup.

At present, the Layer 2 track is full of flowers, and the overall trend has begun. Vitalik also said that the initial deployment of Ethereum's Layer 2 expansion solution is basically successful, and the rest is improvement.

DeFi is hot this year, and all kinds of DeFi are actively looking for suitable Layer 2 solutions for cooperation. Compared to directly migrating projects to other high-performance public chains due to congestion on the Ethereum chain, it seems more reasonable and feasible to choose to cooperate with Layer 2 scalability solutions to reduce transaction costs and improve user experience OK. DeFi products supported by Layer 2 projects can solve the pain points of slow transaction confirmation and high transaction fees. The combination of Layer 2 + DeFi will increase the engulfment of the centralized platform market and lead everyone to further migrate to the decentralized financial world.

*Defi

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Zerion, a one-stop application for DeFi, supports trading and tracking of a variety of community tokens issued by individuals

* Prediction market

Zerion, a one-stop application for DeFi, has added support for trading and tracking of a variety of community tokens issued by individuals, including the personal token RAC issued by Grammy Award winner DJ RAC, the community token COIN issued by Coin Artist, musician Harrison First Issued personal tokens First etc.

Polymarket, a prediction market based on the AMM mechanism, launched the beta version, supporting credit card deposits

* Prediction market

Polymarket, a prediction market based on the AMM mechanism, announced the launch of the beta version, which allows instant execution of unlimited free transactions. In addition to encryption users, it also provides an easy-to-use experience for non-encryption users. It supports credit cards, debit cards, USDC deposits, and email logins. Keep transactions non-custodial and on-chain.

Andre Cronje wrote an article explaining the LBI plunge: It doesn't matter how much the token is trading in the external system

* Token plunge

Andre Cronje, founder of yearn.finance (YFI), wrote that the number of failures in the encryption field exceeds the number of successes. But he is providing developers with construction ideas, not serving speculators. It said that tokens are not stocks, and in the DeFi field, tokens are a coordination mechanism. Owning these tokens is about wanting to be a contributor, not a bystander. Andre Cronje previously issued the token LBI to eliminate arbitrage losses and generate transaction fees. According to Uniswap data, the price of LBI once rose to more than US$0.07, and its price has plummeted nearly 94% from the highest point to US$0.0044. .

DeFi Pulse partners with Gauntlet to launch private beta of DeFi project security scoring tool

*Security Risk

The DeFi real-time data analysis platform DeFi Pulse announced that it has cooperated with the DeFi simulation platform Gauntlet to launch the alpha version of the "DeFi Pulse Economic Safety Grade" (DeFi Pulse Economic Safety Grade) tool, which allows users to quantify and compare the risks of DeFi projects.

ParaSwap, a decentralized transaction aggregation platform, integrates multiple Curve exchange pools

*Aggregator

The decentralized transaction aggregation platform ParaSwap announced the integration of multiple Curve exchange pools, and all Curve exchange pools can be used by users at the same time.

Ethereum's ZK Rollup expansion solution Hermez has been launched on Uniswap

*L2 expansion

The expansion network Hermez token HEZ based on the ZK Rollup concept is currently listed on the Uniswap trading pool. The first pool will start with 3 million HEZ and 8,000 ETH. The target price of HEZ is about $1. Hermez also pointed out that any user who wants to participate in the auction and become a node operator must obtain HEZ on Uniswap.

Ethereum scaling program Arbitrum Rollup testnet completes major update to run on new Arbitrum software stack

*NFT

*L2 expansion

Blockchain startup Offchain Labs announced a major update to its Ethereum expansion program Arbitrum Rollup testnet on the Ethereum Kovan testnet, which can run on the newly upgraded Arbitrum software stack and open source it for anyone people use. Users can deploy contracts on a large scale in just a few minutes without downloading any software from Offchain Labs.

Gallery Finance, an NFT-based theme creation competition platform, is about to start liquidity mining

Gallery Finance, an NFT-based theme creation competition platform, is about to launch liquidity mining. The platform allows users to submit themes, and artists participate in the creation of works based on the themes. After voting for the best works, they can be converted into NFTs.

Blockchain Media The Block Launches Data Dashboard, an Encrypted Data Platform

*data

The blockchain media The Block announced the launch of the encrypted data platform Data Dashboard, which enables investors, traders, companies and decision makers to understand information in various dimensions of the blockchain industry at a glance, including on-chain indicators, markets, and open finance. and alternative indicators.

Decentralized storage project Sia development company Skynet Labs launches new framework SkyDB

*store

Skynet Labs, the developer behind decentralized storage project Sia, has announced a new framework that will allow Skynet users to create decentralized accounts and store updatable files in those accounts. Specifically, the user's SkyDB account can be used to store a json object listing the user's multiple files and the metadata associated with them. The frontend can then interpret this object and load the list of files for the user. If the user makes any changes to the fileset, the json object in the SkyDB account can be updated.

Swiss watch brand Breitling announces Ethereum-based digital passports for all its new watches

*Traditional industries

Swiss luxury watchmaker Breitling has announced that it will offer an Ethereum-based digital passport for all of its new watches. Antonio Carriero, Chief Digital and Technology Officer of Breitling, said that “Breitling hopes that the entire industry will work together to establish a global standard for digital certificates and APIs, so that customers will benefit from it.”

Ripple Donates $10M to Mercy Corps to Fight for Financial Inclusion

*Coinbase

*donate

At Ripple's annual Swell conference, Ripple announced a $10 million donation to Mercy Corps. Mercy Corps is a non-governmental humanitarian aid organization that creates economic opportunity in countries with dysfunctional financial systems.

Coinbase global marketing chief John Russ decides to leave

Coinbase Global Marketing Director John Russ tweeted on October 15 that he has decided to leave Coinbase. John Russ said the decision was in response to previous comments by Coinbase CEO Brian Armstrong that he was "staying out of politics".

PricewaterhouseCoopers report: In the first half of 2020, the value of mergers and acquisitions in the encryption market has exceeded that of the whole year of 2019, reaching more than 500 million US dollars

*M&A financing

PricewaterhouseCoopers (PwC) released a report on M&A and financing in the global encryption market in the first half of 2020. The main points of the report are as follows: 1. In the cryptocurrency market, the value of mergers and acquisitions in the first half of 2020 (a total of 60 deals, or about $507 million) has exceeded the value of mergers and acquisitions for the whole of 2019 (a total of 125 deals, or about $481 million) 2. From the perspective of the geographical environment of M&A, 57% of the transaction activities in the first half of 2020 occurred in the Asia-Pacific region, Europe, the Middle East and Africa, with a high 51% in 2019 and 43% in 2018; 3. In terms of financing activities, only 272 transactions were raised in the cryptocurrency market in the first half of 2020, raising a total of 1.106 billion US dollars, while a total of 807 transactions were raised in 2019. The amount of financing is 2.313 billion US dollars. While total funding was down in the first half, the average amount raised increased by 33%. Finally, PwC summarized three trends in mergers and acquisitions and financing in the encryption market, which are: 1. M&A activities continue to be driven by larger players; 3. Institutional interest in digital assets continues to increase.

Vitalik Buterin Calls on Users to Pay Attention to Layer 2 Capacity Expansion Solutions

*L2 expansion

According to Coindesk, in the face of the recent high transaction fees on the Ethereum network, Vitalik Buterin, the co-founder of Ethereum, called on users to pay attention to the two-layer expansion solution. It pointed out that the top priority is that users need to start supporting the Rollup expansion solution. Vitalik Buterin also praised Optimistic Rollup and ZK Rollup, two-layer scaling solutions that use zero-knowledge proof technology, adding that using these solutions on the current Ethereum blockchain can increase transaction throughput from 15 to 1000 to 4000 per second. The general-purpose virtual machine (EVM) application smart contract is relatively behind.

Encryption analysis company Chainalysis doubled its recurring revenue in the third quarter year-on-year

*ETH2.0

Ethereum 2.0 Beacon Chain Genesis Expected Within Six Weeks

According to Coindesk, ConsenSys researcher and Ethereum 2.0 developer Ben Edgington said that the Ethereum single-client testnet Sapphire, Topaz and Onyx networks have been tested for a long time, and the Medalla testnet launched in August currently has over 50,000 verifiers participate.

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Part.3 Investment and financing events

Ethereum-based online marketplace Zora raises $2M seed round with participation from Coinbase Ventures

*artwork

Ethereum-based online marketplace Zora completed a $2 million seed round led by Kindred Ventures, with participation from Trevor McFedries, Alice Lloyd George, Jeff Staple and Coinbase Ventures. Zora's main product is a platform for creators or artists to distribute their works, and can continue to participate in the secondary market transactions of works.

Horizon Finance completes USD 1.335 million seed round financing, Framework Ventures participates

*Rate transaction

Horizon Finance announced the completion of a $1.335 million seed round of financing, with investors including Framework Ventures, DeFiance Capital, Mechanical Capital, Spartan Group, Alameda Research, NGC, Ruby Capital, and Incuba Alpha Capital, among others. This financing will focus on creating a DeFi-based interest rate trading platform, the long-term goal is to allow all decentralized finance participants to manage their own APY/interest rate exposure, and advance the industry by building key components in the decentralized financial system develop.