LD Capital: Encryption exchanges lay out Layer2 frequently, carrying the ambition for the future market.
Original author: Alfred, LD Capital
Layer 2 has become one of the most important tracks this year, and its development will enable Web 3 networks to serve users with higher efficiency and lower costs while maintaining new production relationships, smart contracts, and other advantages, influencing the speed of future industry development as underlying infrastructure. Recently, in addition to projects specifically focusing on the L2 track, exchanges have also been active in the L2 track. Mantle, Base, and opBNB have successively launched or announced L2 mainnet timelines, attracting market attention. In this article, we will take stock of the latest situation of exchanges on L2 and what it signifies.
1. Base
Supported by Coinbase, Base is an Ethereum L2 network that provides a secure, low-cost, developer-friendly way for anyone to build decentralized applications or on-chain "dapps," with the aim of bringing the next billion users into Web 3 and the crypto economy.
1. Technical Overview
Base is the first collaboration with OP Stack and has become a primary option for a wide range of teams and projects followed by an impressive list of supporters including Coinbase, Sergey
The core developers of OP Stack, using Optimistic Rollup and OP Stack modular technology stack, also maintain synergy in the 2023 technical roadmap. It can be said that all the advantages of OP Stack will be inherited in Base, such as shared Ethereum security, EVM equivalence, lowest fees and excellent scalability in current L2, and the modular structure of OP Stack. For further technical details about OP Stack, you can refer to our previous report "Outlook for Cancun Upgrade: Is OP worth being "optimistic"". 2. Current progress (1) Timeline On 2023.2.23, the Base testnet will be launched, promoting collaboration with optimism and the super chain concept. On 2023.7.13, the mainnet will be open to builders, and on 2023.8.9, the mainnet will be open to the whole network, kicking off the one-month Onchain Summer event.mu mv mw fp bj" data-selectable-paragraph="">(2) End-of-July meme trendAfter the mainnet was opened on July 13th, there wasn't much funding on-chain. On July 28th, the official team promoted the link for NFT minting to early adopters. The minting condition was to deploy smart contracts on the Base mainnet. From July 30th, the TVL on Base started to grow rapidly and within two days, the TVL exceeded 8 million US dollars.
Source: Base Official
Due to the lack of applications launched on the chain, the deployed smart contracts are mainly meme without actual applications. With the manipulation of funds, meme coins represented by bald saw a thousandfold increase in price within a day, followed by a sharp drop to zero. Although most memes made a flashy appearance and quickly rug, the exaggerated data attracted more funds to flow into Base. Due to the absence of an official cross-chain bridge temporarily, a large amount of funds remained on the chain for speculation. This wave of activity brought high market enthusiasm to Base even before the official launch of the mainnet to the public.
Source: Dexscreener, July 31, 2023.
(3) On-chain data
Since the announcement of the mainnet launch time on August 3rd, the current on-chain TVL exceeds $120 million.
Source: L 2 BEAT
Total transactions: 5.75 million, total users: 340,000+, total contract creations: 53,000, average gas: $0.36.
Source: Dune
The current main application on the chain is Dex, with baseswap ranking first and TVL accounting for 50% of the top ten Dex.
Source: DefiLlama
3. Future Plans
(1) Vision for Building an Open Entrance to Web 3
Coinbase had a four-phase plan since its inception, aiming to create an open financial system to increase global economic freedom. The first three phases have been completed over the past decade, which are: protocols (*Bitcoin, Ethereum), establishment of exchanges (*Coinbase Exchange) as bridges for cryptocurrencies, and the creation of a mass-market interface for decentralized applications or "dapps" (*Coinbase and Coinbase Wallet). Currently, the company has entered into the fourth phase. In the past, Coinbase's main services were built on Web 2 technology. In this phase, an environment for various crypto-native dapps will be built using smart contract-written chains to bring one billion users into the crypto economy in the future.
Source: Base
(2) Technical Roadmap
The goal for 2023 is to collaborate with OP Labs and Optimism Collective to advance Base and Op Mainnet from Phase 0 Roll up (as defined by Vitalik) to Phase 1 Roll up, and achieve a high degree of decentralization and trustlessness.
A. Launch Fault Proofs: Start at least one fault proof for the OP stack, by leveraging a set of validators to identify and challenge faults, thus protecting the security of Base and Op Mainnet.
B. Advance Decentralization: Enhance the smart contracts of Base and Op Mainnet to ensure greater decentralization.
Upgradeability is decentralized by first handing it over to a Security Committee, the decentralized statutory number of which is not controlled by any single entity. C. Superchain begins to land: the initial version of Superchain is launched, which can sort transactions aggregated from Base, Op Mainnet, and any OP Stack, protecting anyone's right to participate in these ecosystems. The goal for 2024 is to strive to advance Base and Optimism Mainnet to the second phase, with decentralization and security levels comparable to Ethereum. 4. Project Features (1) No token plan currently. Base explicitly states through official channels that there are no plans to issue network tokens. (*This may mainly consider compliance regulations in the United States, and there may be new changes in the future based on the regulatory game between Coinbase and the SEC)(2) Building an open chain
Base aims to build a bridge, not an island. It will provide access to Ethereum L 1, other L 2 chains, and other ecosystems like Solana. In addition to enabling interoperability with other chains, Base will also support as many chains as possible in Coinbase products.
(3) Coinbase's Ecological Interconnection
With nearly 100 million users and $130 billion in assets, Coinbase aims to bring these users to the world of chains through Base and hopes to attract more new users to Coinbase through Base's on-chain entry.
II. Mantle
Developed by Bitdao, Bybit...
Support, Mantle Network is an Optimistic rollup-based Ethereum L2, backed by a large Mantle treasury, with product and roadmap governance by token holders.1. Technical Overview
(1) Modular Architecture and Data Availability
Similar to OP Stack, Mantle also utilizes modular architecture, where the core functionalities of modular blockchain operations (*execution, consensus, settlement, data availability) happen on dedicated layers. This has the benefits of mitigating the blockchain trilemma to some extent. In terms of scalability, resource separation improves network efficiency as each layer is responsible for specific tasks. In terms of security, all users operate at the same security level. In terms of decentralization, fraud proofs and zk proofs running on different layers reduce the overall execution and verification load on nodes, eliminating the need to execute all transactions for validation.
Based on the modular architecture, Mantle has a dedicated Data Availability layer (DA), meaning Mantle can increase throughput without compromising security or burdening validation nodes. Mantle DA is supported by EigenDA technology.
(2) Threshold Signature Scheme
Optimistic rollup has a limitation, which imposes a longer waiting time for withdrawals in the form of challenges. To address the uncertainty of transaction verification during the challenge period, Mantle implements a distributed signature scheme to verify block data. This type of distributed key generation combined with digital signatures is more commonly known as the threshold signature scheme (TSS), which enables every party in the client network to generate valid signatures and ensures the verifiability of distributed signature data (*as long as there are enough honest signatures). Since each TSS client only holds a portion of the private key, the private key is no longer a single point of failure.
By using the threshold signature scheme (TSS) technology, dedicated nodes contribute to multi-party signatures to improve the correctness of off-chain transactions. This shortens the challenge period for withdrawals. However, the current TSS nodes are authorized by the core contributors of Mantle, which is centralized.
Source: Mantle
(3) Improved Fraud Proof
In the currently popular fraud proof models, the contract that resolves disputes—on-chain validators—can only execute instructions in lower-level virtual machines such as MIPS or WASM. This forces Ethereum Virtual Machine (EVM) clients to recompile their fraud proofs into lower-level languages for on-chain validators to interpret, meaning that the content of the fraud proof is generated outside the EVM scope.
Mantle Network uses an interactive fraud proof mechanism to establish transaction validity and compiles and verifies fraud proofs using EVM-level instructions (i.e., without the need for low-level transcription to avoid ambiguity).
Source: Mantle Architecture
2. Current Progress
(1) Timeline
2023.1.10 BitDAO Modularized Ethereum Layer 2 Network, Mantle Network, announced the launch of its testnet — — 2023.5.19 BitDAO community approved the proposal on "Optimization of Brand, Tokens, and Token Economics" with a 100% approval rate. BitDAO, Mantle, and BIT ecosystem will be collectively named Mantle, and the BIT token will also be converted to Mantle — — 2023.7.17 Mantle Network announced the launch of its mainnet Alpha version at EthCC.
(2) Token Economics and Token Swap
Mantle officially launched token exchange at 6:00 am on July 17, 2023, Coordinated Universal Time (UTC), allowing for a 1:1 exchange of BIT to MNT.
The current total supply of MNT is 6,219,316,794 coins, with 52% in circulation, 47.4% held in the treasury, and 0.6% allocated to the core team budget. The MNT token plays a dual role as a governance and utility token within the Mantle ecosystem, providing holders with voting rights and practical functions (*The tokenomics of Mantle may change in the future due to factors such as exchanges and governance proposal approvals).
Source: Mantle
(3) On-chain Data
TVL 92 million, mainly due to a large number of tokens being listed on MNT. The current circulation of MNT tokens is around 320 million, with a current price of $0.505 and a market cap of 1.6 billion.
Source: L 2 BEAT
In recent days, the daily trading volume has exceeded 100,000 transactions, with a total number of wallet addresses exceeding 160,000 and a total of 1.1 million transactions.
Source: Mantle
The top-ranked application in terms of on-chain TVL is its native Dex, Agni Finance, which adopts the ve(3, 3) mechanism and accounts for over 63% of the top ten TVL.
Source: DefiLlama
3. Future Plans
(1) Technical Roadmap
The official has mainly disclosed further plans in terms of technology. At the L 1 level, they will primarily optimize fraud proof, including optimizing the current authorized node system by core contributors to a permissionless fraud proof. At the L 2-L 1 level, the focus will be on optimizing EIP-4844. At the L 2 level, the current version is EVM compatible, which will enhance the EVM environment. They also plan to upgrade the centralized sequencer to a decentralized sequencer.
Source: Mantle
4. Project Features
(1) Strong financial strength
BitDAO is one of the largest DAO organizations and has one of the largest treasuries, with a current reserve of $3.8 billion. These assets are not possible without the contribution of Bybit, which has donated over $600 million worth of USDC/USDT and 177,000 ETH to the BitDAO treasury.
Source: BITDAO
Through the merge of BitDao and Mantle, Mantle Network has inherited nearly $300 million in stablecoin reserves and nearly 270,000 ETH (*$489 million), which will be the core competence to promote the development of the entire on-chain ecosystem.
Source: Mantle
(2) Layout LSD
Mantle Community has proposed to introduce Mantle LSD and mntETH, including the Mantle Treasury, where users can deposit ETH and receive profit-bearing mntETH receipts. Verification services are outsourced to external node operators.
Currently, Mantle Treasury holds nearly 270,000 ETH. Frax, ranked fourth in the current LSD track, has pledged 245,000 ETH, and StakeWise, ranked fifth, has pledged 94,000 ETH. It is evident that if Mantle wants to develop LSD vigorously, it will quickly occupy a place.
Source: DefiLlama
Three, BNB Chain-L 2
Supported by BNB Chain, Binance, two L 2 solutions, opBNB and zkBNB, are implemented based on BSC to enhance the performance of the BSC chain. Currently, opBNB is experiencing faster development and also utilizes OP Stack technology.
1. Technical Overview
BNB Chain consists of two blockchains - BNB Beacon Chain (*BC) and BNB Smart Chain (*BSC). BNB Beacon Chain is responsible for governance and management of staking and voting on the BNB chain. BNB Smart Chain, on the other hand, is an EVM-compatible, consensus-layer blockchain component with a multi-chain hub.
Source: BNB Chain
zkBNB and opBNB are layer 2 scaling solutions for BSC. Unlike other L2 solutions mentioned in this article, zkBNB and opBNB are designed on top of BSC as layer 1, rather than Ethereum. Although BSC is much faster than Ethereum, it is still important to further improve scalability through L2 as a chain that hosts a large number of games.
zkBNB - zkBNB is an infrastructure built for developers based on the zk-Rollup architecture. In the future, it can help them build large-scale BSC-based applications with higher throughput and lower or even zero transaction fees. It is currently in the testnet phase. Arnaud Bauer, the Chief Solutions Architect of BNB Chain, stated in an interview with The Block earlier this year that zkBNB is not yet compatible with EVM, so opBNB was prioritized for release.
opBNB - The opBNB network isBNB Smart Chain's Layer 2 scaling solution, supported by OP Stack, achieves scalability while inheriting the security and EVM compatibility of BSC.(*The content of OP Stack is not expanded here)
2. Current Progress
(1) Timeline
On February 14, 2023, BNBChain announced its 2023 technical roadmap, with scalability set as a long-term goal. On June 19, 2023, the opBNB testnet was launched. On August 2, 2023, it was announced that the opBNB mainnet would be launched in mid-August, initially open to infrastructure providers, and open to the public by the end of August or early September. (*zkBNB, originally a focus of scalability this year, has no further progress at the moment)
(2) On-chain data
Current ETH's... TVL is 7 times that of BSC, BSC's transaction volume is 3 times that of ETH, the total fee is 7.7% of ETH, on L 1, BSC has lower fee consumption compared to ETH, while ETH has the largest amount of funds.
Source: DefiLlama
On L2, the average daily transaction volume of opBNB on the testnet is around 10,000-15,000, with an average block time of 1 second. There are about 6,000-20,000 daily active accounts, and the fee for each transaction is approximately 0.005 USD.
Source: opBNB-Scan
3. Future Plans
BNBChain in 2023 will advance in five areas:
(1) Enhance overall performance of the blockchain network: mainly through enhancing the block gas limit, implementing parallel EVM, upgrading BSC nodes and clients, and other solutions
(2) Improve scalability: achieve BSC scalability through a multi-chain strategy, with the rollup solutions primarily being zkBNB and opBNB, with opBNB progressing faster at present, and zkBNB originally planned to be launched this year.
(3) Building new infrastructure: Utilizing more infrastructure, one of the focuses is decentralized storage. BNB Greenfield was launched this year, where users and dApps can create, store, and exchange data with full ownership, forming a new data economy. Storage is also a key factor in further enhancing network performance.
(4) Increasing decentralization: By the end of 2023, the number of active validators will be increased from 29 to 100, and more consensus mechanisms and on-chain governance will be introduced.
(5) Enhancing BNB security: Introducing new security services, a security and risk management framework, and improving the security of cross-chain components.
Source: BNB Chain
4. Project Features
(1) Built on BSC L2: BSC has superior processing speed and cost efficiency compared to ETH. Through opBNB technology, performance will be further enhanced through L2.
(2) Comprehensive and mature BNB Chain ecosystem: Binance is currently the largest cryptocurrency exchange with the most users and funds. BNB Chain has built various infrastructure and applications within its own ecosystem, allowing flexible and efficient adaptation to opBNB and fully realizing the value of the ecosystem and tokens.
IV. Conclusion
In the second half of this year, the voice of L2 will continue to grow, perhaps referred to as "L2 Summer"...
bsp;The future development of Layer 2 technologies is promising. From a technical perspective, mainstream Layer 2 solutions are converging towards a more scalable and modular architecture. Optimistic rollup has gained more adoption due to its feasibility, leading to increased external collaborations for the OP Stack.Many exchanges are deploying their own Layer 2 solutions, primarily to leverage their existing funds and user base and attract more new users and dapps by building Web3-native blockchain networks. This will enable them to create a more diverse business structure and tap into incremental growth opportunities. It remains to be seen who will further solidify their position or alter the development landscape through Layer 2 solutions.
Related links:
Base website: https://base.org
Mantle website: https://www.mantle.xyz
BNBChain Official Website: https://www.bnbchain.org
