Gas
Following ETH’s meteoric rise there’s been a huge amount of activity on the Ethereum blockchain. Gas prices soared as users of the network bid each other up to get their transaction included.
Critics were quick to point out the high costs, and it’s true that high gas is a barrier for new users and small investors. What the critics don’t mention is that there’s a highly positive element to this reality: users are willing to pay to use the Ethereum network.
High gas costs show incredible demand for Ethereum.
And the good news? Scalability has never been closer.
Layer 2
I’ve spoken about L2s here before. Development is ramping up now more than ever. Layer twos work by taking transactions off-chain, exponentially scaling throughput without compromising on security. One crucial technology is rollups, with both optimistic and zero-knowledge designs.
You can learn more about Ethereum’s rollup-centric roadmap for Ethereum from Vitalik’s EthGlobal talk here.
There are some incredible L2 developments coming up very soon, including cross-chain and cross-L2 compatibility. Let’s dive in.
Optimism
January 15th Optimism will launch its first trial run with Synthetix. Optimism uses the OVM a near-fully compatible L2 Ethereum Virtual Machine allowing decentralised apps to massively scale. Uniswap will be next, so make sure to check out their update.
Connext
Connext is beginning its stage 0 mainnet launch this week allowing non-custodial cross-chain transfers. This is huge, removing a large barrier to entry and connecting the ecosystem. Stage 1 is expected before the end of Q1 and Connext will allow cross-L2 transfers. Audit results just came back from ChainSafe.
Fuel v1 Live on Mainet
I wrote a full piece on this just the other day, but it deserves another mention here. Fuel’s v1 unlocks 500 transactions per second, and the upcoming v1.5 will see this scale to 2000.
Loopring
Loopring has seen exponential growth this week, doing $5.5m of volume in the last 24 hours. The LRC token price has also exploded, up 74% at the time of writing.
Loopring is a decentralised order-book exchange on L2 using zero-knowledge rollups. I recently interviewed Loopring’s Matthew Finestone who dived deep into his thoughts on scaling Ethereum. Loopring recently unveiled a mobile app that allows you to trade at the tap of a button, all without having to trust a centralised exchange.
Conclusion
Layer 2 scalability is already here, and its about to get even better. Today’s gas prices hurt, but I’m taking solace in the fact that there is such clear demand for the Ethereum network.
Layer 2 is no longer a distant possibility, it’s a reality.
Decentralise is sponsored by PieDAO.
PieVaults maximise yield with multiple farming strategies, actively operating across DeFi protocols and bouncing as to maintain the best rates. PieVaults allow you to be take advantage DeFi opportunities without having to pay gas. You can also mint BCP, DeFi++ and YPIE gas-free with the community Oven.