Technology
Five Layer 2 Developments to Watch Out For
Global Banking and Finance Review
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The crypto space is seeing innovations, changes, and new experiments happening all at once. In 2024, much of this is focused on Layer 2 solutions, which can offload part of a blockchain’s processing load onto a secondary network. This takes heat off the primary blockchain so that users can make thei...
The crypto space is seeing innovations, changes, and new experiments happening all at once. In 2024, much of this is focused on Layer 2 solutions, which can offload part of a blockchain’s processing load onto a secondary network. This takes heat off the primary blockchain so that users can make their most important and basic transactions—like turning their ETH to USD—more quickly and reliably.
Layer 2 solutions could become an integral part of how blockchains work in the future. Here are five important developments happening right now. Stay up to date, and see if you can spot the future trends that will become commonplace soon.
Polygon has long been a leader in Layer 2 solutions, and its latest iteration, Polygon 2.0, promises to solidify its position further. Dubbed “the value layer of the Internet,” Polygon 2.0 aims to enhance interoperability across various blockchain networks. This upgrade introduces advanced features such as modularity and improved scalability, making it easier for developers to build complex dApps that can interact seamlessly across different blockchains. This development is set to create a more interconnected and efficient blockchain ecosystem.
zkSync, one of the most prominent zk-Rollup implementations, has made significant strides in 2024. By leveraging zero-knowledge proofs, zkSync offers enhanced privacy and scalability. It enables thousands of transactions to be processed off-chain, with a single proof verifying the entire batch on-chain. This not only reduces transaction fees but also ensures data privacy and security. zkSync’s latest updates include support for EVM-compatible smart contracts, which means developers can now deploy their Ethereum dApps with minimal modifications.
Optimism and Arbitrum continue to push the use of Optimistic Rollups to scale Ethereum. These solutions assume transactions are valid by default, only running computations if a dispute arises. In 2024, both platforms have rolled out significant upgrades to enhance user experience and developer adoption. Optimism has introduced its “Bedrock” upgrade, which significantly reduces costs and latency. Arbitrum, on the other hand, has launched Arbitrum One, a more developer-friendly environment that supports a broader range of dApps.
StarkNet is trying something new with zk-STARKs (Zero-Knowledge Scalable Transparent Arguments of Knowledge). Unlike zk-SNARKs, STARKs are more scalable and do not require a trusted setup, making them more secure and efficient. In 2024, StarkNet has integrated advanced features like recursive STARKs, which further enhance scalability by allowing multiple proofs to be aggregated into a single proof. This makes StarkNet an ideal solution for applications requiring high throughput and robust security.
Chainlink’s Cross-Chain Interoperability Protocol (CCIP) enables seamless interaction between different blockchain networks. CCIP allows smart contracts on various chains to communicate and exchange value effortlessly. This capability is crucial for the development of multi-chain applications and the broader adoption of DeFi and NFT platforms.
A Layer 2 solution is a secondary framework built on top of a blockchain that enhances its scalability and efficiency by processing transactions off the main chain.
zk-Rollups are a Layer 2 scaling solution that uses zero-knowledge proofs to bundle multiple transactions into a single proof, reducing the load on the main blockchain.
Interoperability in blockchain refers to the ability of different blockchain networks to communicate and exchange data or value seamlessly.
A decentralized application (dApp) is an application that runs on a blockchain network, allowing for peer-to-peer interactions without a central authority.
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