Ethereum co-founder, Vitalik Buterin asserted the significance of Layer 2 scaling solutions on the Ethereum network to facilitate the safest and most sustainable way to scale Ethereum while preserving decentralization. Buterin spoke at the 2021 Shanghai International Blockchain Week, noting the urgent need for scalability and implementation of rollups. This came simultaneously with the upcoming launch of Ethereum 2.0 Proof-of-Strake (PoS).
Buterin recommends L2 to counter NFT over-crowding issues
Buterin emphasized the need for scalability referring to the non-fungible tokens (NFTs) frenzy, along with the explosive growth of decentralized finance (Defi) on the Ethereum network. He had already discussed the rise in non-fungible tokens (NFTs) on the Ethereum blockchain last month in his written piece. Vitalik suggested that moving all NFTs to layer-two solutions can beat the high gas fees issue, further advising blockchains and NFTs to transfer to L2 to counter scalability issues. According to Buterin, the mainstream blockchain has become overcrowded, causing problems like high transaction fees.
Upcoming L2 scaling solutions
He mentioned Eth2’s first upgrade, the Beacon Chain upgrade, that was implemented in December which brought staking to the Ethereum ecosystem. Furthermore, Buterin revealed that “The Merge”, i.e., Ethereum mainnet’s merge with the Beacon Chain’s proof-of-stake system, that aims to end proof-of-work Ethereum, which will be launched by next year. Additionally, Vitalik spoke of ‘Sharding’, a multi-phase upgrade for Ethereum’s scalability using shard chains. This will further distribute the network’s load across 64 new chains, which will be launched in 2022 itself, following “The Merge”.
Rollups are the next best thing
While Buterin asserted the importance of upcoming scaling solutions, he reinstated that these will take a longer timeframe to begin functioning properly, therefore Rollups are the second-best option for users. Rollups are a Layer 2 solution that handles transactions outside the Ethereum mainnet, i.e., Layer 1. However, it posts transaction data on Layer 1. This has already been launched and may facilitate a significant hike in scalability, up to a factor of 100.
“The Ethereum ecosystem is all-in on rollups as a scaling strategy for the near and mid-term future…optimistic rollups, which are simpler and easier to build were likely to be preferred in the short-term.”
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