Layer 2 Scaling Solutions | January 2022 | Week 2
So by now, I guess, the attentive reader has seen Vitalik’s argument why the future will be multi-chain not cross-chain. Basically, having two chains with separate consensus might lead to a 51%-attack on one chain attacking the bridge whereas the other cannot deal with this. Luckily, this doesn’t apply to Layer 2s. Which, if we see this as a valid point, adds even more potential value on Layer 2s.
What happened in the Ecosystem?
- Do you want to know which projects are already on StarkNet? There is even a Wallet already – Argent X. Community expectations on StarkNet are high, so its nice to see the project growing even if they just started, see here.
- The Arbitrum Sequencer had a downtime four days ago. Different to blockchains, Layer2s have centralized sequencers that act as servers. When the sequencers are down, the “network” is down, see here. All projects want to decentralize that design in the future.
- CryptoShine explains zkSync in a nice way. It is technical enough to stay accurate and a good read. So in case you want to know more about this project, see here. It will be important for ConsenSys and MetaMask when zkSync 2.0 will be launched.
- Bartek – the mastermind behind L2beat.com explains how STARKs work … in a Twitter post. Might be a good way to check your own understanding of this amazing idea – using Polynomials as error codes.
- And in case you missed it … What is Web3? by our colleague James.
Look at the data
- Fantom kicked Polygon PoS out of the top5 biggest chains by TVL. That is why, Fantom now also has a scorecard in our framework, see below. The system uses Lechesis an asynchronous BFT protocol and they have a fancy homepage.
- Polygon PoS still has the most unique addresses after Ethereum.
- Most Layer 2 protocols have a steep downfall in daily transactions. Even dYdX which by far had the most daily transactions always sees a decline of ~30% compared to last week.
- Boba Network looses 26% of its TVL and will get replaced by Metis which is another Optimistic Ethereum fork.
Costs to bridge assets
Connext is getting even more expensive. For bridging 0.1 from Arbitrum to Connext, users must pay $261 which is more than 3x the cost of the others.
However, we are waiting for a major upgrade by the Connext team introducing virtual AMMs. Those are supposed to make Connext Routers more cost-effective.
- We will take a look at Metis – the data, the security and ease of use.
- We are about to interview thought leaders in the Layer 2 ecosystem about their 2022 predictions
- We will update our scorecards to the next level.
Cryptofunds, market makers, and trading desks can engage in DeFi and Web3 with MetaMask Institutional
MetaMask Institutional offers unrivaled access to the DeFi ecosystem without compromising on institution-required security, operational efficiency, or compliance requirements. We enable funds to trade, stake, borrow, lend, invest, and interact with over 17,000 DeFi protocols and applications.
Found this research useful? Connect with the ConsenSys Cryptoeconomic Research team at [email protected]
Disclaimer: ConsenSys Software Inc. is not a registered or licensed advisor or broker. This report is for general informational purposes only. It does not constitute or contain any individual investment advice and is made without any regard to the recipient’s objectives, financial situation, or means. It is not an offer to buy or sell, or a solicitation of any offer to buy, any token or other investment, nor is it intended to be used for marketing purposes to anyone in any jurisdiction. ConsenSys does not intend for any person or entity to rely on any facts, opinions, or ideas, and any financial or economic commentary expressed in this report may not be relied upon. ConsenSys makes no representations as to the accuracy, completeness, or timeliness of the information or opinions in this report and, along with its employees, does not assume any responsibility for any loss to any person or entity that may result from any act or omission based upon this report. This report is subject to correction, completion, and amendment without notice; however, ConsenSys has no obligation to do so.