Polygon’s CEO, Sandeep Nailwal, assured that the future of Layer 1 technology lies with Ethereum alone: “There’ll be one single environment layer one, which is Ethereum in my mind”. So what does he mean by it exactly? First let’s break down concepts like Layer 1 & Layer 2.
Blockchain adoption continues to grow, as does the importance of scaling in the ecosystem. New applications and increased transaction volume can be accommodated with the help of system throughput rate improvements. That’s where Layer 1 & 2 come in: in order to improve network security and scalability these systems can better interoperability between blockchains.
Layer 1 blockchain network refers to the fundamental protocol of a network. Scalability solutions include direct modifications to protocol rules in favor of capacity and speed, which can also translate to additional users and data.
Sharding, for example, has become one of the most popular methods. It consists on dividing the state of the entire blockchain network into separate sets of data known as shards. We can also take a look at the promising impact of Rollups technology on scalability. What are they all about exactly? They take the transactions out of the mainnet and process them off-chain, convert them into one single piece of data, and submit them back to the Ethereum mainnet. Projects like Optimism.io and arbitrum.io, that are Layer 2 protocol based, have made huge steps forward.
Layer 2, as the name suggests, is a system that operates on top of a blockchain protocol (Layer 1). To improve scalability, L2 aims to shift the transaction load of a blockchain protocol to an off-chain architecture. Delegating data processing to the supporting architecture helps deal with possible congestion on the blockchain’s core protocol. Just like Polygon, there are plenty of promising Layer 2 Ethereum projects. Specifically on web3 gaming there is Immutable X, an L2 scaling solution for NFTs on Ethereum, allowing users to build and manage NFT projects in a secure platform at zero transaction cost with scalable features.
Based on the belief that Layer 1 protocols will remain the foundation of the blockchain ecosystem, Nailwal predicts that Ethereum’s longevity and scalability will make it possible. Even though L2 solutions will have their place, Polygon’s founder claims that the long-term success of blockchain platforms will come through Layer 1’s dominance. However, his statements have been challenged by the competition. Do you agree with Nailwal