L2 is one of the most discussed tracks right now.

L2 aims to solve Ethereum’s long-standing urgent need to increase throughput. This year, its head ecology has ushered in phased technology implementation, and it is also the main beneficiary of the Ethereum mainnet upgrade this year.

In the Ethereum roadmap, "The Surge" is an important node to promote the expansion of Rollup, aiming to achieve the key goal of 100,000+ TPS per second in Rollup:

In the figure, EIP-4844 (Proto-Danksharding Proposal) is a very critical proposal, which belongs to the pre-proposal of Danksharding for the full version of sharding expansion, and the whole set of schemes revolves around Rollup for on-chain expansion.

EIP-4844 proposes a transaction type Blob Transcation tailored for Rollup, which provides an additional temporary plug-in database for Ethereum, adding 128 KB (1 Blog) to 256 KB (2 Blogs) for each transaction ); Each block can carry 1 MB (8 Blogs) - 2 MB (16 Blogs), bringing additional storage space to Ethereum (currently, the average size of each block in Ethereum is about 85 KB), additional The data space can enable Rollup to achieve higher TPS and lower cost, and at the same time release the block space originally occupied by Rollup to more users. In the full version of the Danksharding solution, the amount of data that a blob can carry will continue to be expanded.

The deployment and upgrade of the proposal is expected to reduce the cost of L1 transactions by 10-20 times, and further reduce the cost of L2 Rollup by 10-100 times.

The scope of EIP-4844 covers consensus and execution, and its complexity is between EIP-1559 and The Merge. It is scheduled to be deployed in the Cancun upgrade after the Shanghai upgrade, and is the focus of the Cancun upgrade after the Shanghai upgrade. Therefore, while the popularity of the LSD track is high, the market's expectations for the follow-up hot spots have already revolved around the L2 track.

The proposal was originally scheduled to land in May-June this year, but it now appears that with the progress delayed, it is expected to start in the middle or second half of this year. This provides an excellent heat extension range for the entire L2 ecology, constantly driving fluctuations in the L2 sector. This sector is highly deterministic and will become a hotspot before the EIP-4844 upgrade at the latest.

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(Data source: l2b eat)

The existing Rollup technology solutions are mainly Optimistic Rollup and ZK Rollup. The two leading ecosystems of Arbitrum and Optimism based on Optimistic Rollup technology have steadily occupied the market share, and the pattern of the two strong players is obvious.

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(Data source: l2b eat)

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(Data source: https://dune.com/blockworks_research/l2-comparison-dashboard)

The impact of the EIP-4844 proposal on the two ecosystems is also slightly different: GMX on Arb provides the largest TVL ratio, but SNX V3 in OP is about to go online, because the atomic swap it uses is a zero-slip transaction, It will benefit more from the fee reduction of EIP-4844.

In addition, L2 applications naturally have migration needs, and the two ecosystems still share many DEXs, DApps, lending agreements, etc.

Such stalemate competition, the L2 Rollup fee reduction benefits brought about by superimposed upgrades, and the spiral effect brought about will be very intense. In the space before the upgrade is delayed and before the upgrade is implemented, there will be more intense "involution" of DeFi projects in the Arb series and OP series.

Under this kind of involution, the ideal opportunity lies in the emergence of innovative DeFi projects, the technical progress or positive drive of the leading protocol, official strategic trends and ecological support (for such projects, official support from Arb and OP will be very important ).

In L2, most DeFi are still "translating" the DeFi economic models and ideas in Ethereum, Polygon, Solana, Fantom and other ecology, but in any case, in the short term, you can continue to pay attention to the Arb ecology and OP ecology hot DeFi, for example:

ARB ecology: Magic (MAGIC), Radiant (RDNT), Gains Network (GNS), etc.;

OP ecology: Velodrome (VELO), Sonne Finance (SONNE), etc.;