The scaling technologies within blockchain-based systems are constantly evolving, showcasing the ingenuity of developers. Various solutions, such as Polygon’s Type 1 prover, Ethereum’s sharding proposals, and recent improvements in consensus protocols, are being introduced to tackle the scalability concerns that blockchain systems face. These Layer-1 (L1) and Layer-2 (L2) network architectures aim to address the growing concerns and further improve the performance of the public ledger technology.
Which Layers Are There in a Distributed Ledger?
The blockchain system’s framework is composed of several interconnected layers, each playing a unique role in enhancing the functionality and assuring the reliability of the distributed ledger system.
â—ŹÂ Layer 0
The basic structure of public ledger networks is represented by this layer, which includes crucial protocols and hardware components that work together to support the core.
â—ŹÂ Layer 1
The layer responsible for implementing the native blockchain-based protocols is also known as the implementation layer. It mainly deals with critical aspects such as dispute resolution and consensus frameworks that form the foundation of blockchain’s core operation. This layer is referred to as Layer 1.
â—ŹÂ Layer 2
Off-chain scaling procedures, known as Layer 2, ameliorate the ability to scale by performing operations of the central chain. These methods address the constraints of the Layer 1 network by offering increased bandwidth and quicker transaction processing times.
â—Ź Layer 3
Developers create dApps in the application layer, which serves as the interface and provides functionality for a vast blockchain-based ecosystem, with application-specific protocols being a crucial component.
What Does Blockchain Trilemma Stand For?
The Blockchain Trilemma poses a constant threat to developers in the blockchain-related space. This dilemma revolves around the delicate task of simultaneously ameliorating a system’s security, scalability, and decentralisation without neglecting any of these crucial aspects. Despite the ongoing efforts, achieving a perfect balance in all three areas still requires effort.
As the potential of distributed ledger technology to transform various industries continues to be explored, the aspiration to create networks that excel in decentralisation, security, and scalability persists. However, this pursuit is frequently met with obstacles, as finding the proper equilibrium among these fundamental attributes is complex.
Layer-1 Solutions
Layer-1 scaling mechanisms are crucial in improving the core protocol of distributed ledger systems. They address the inherent obstacles of boosting transactional capacity while upholding strong security measures and decentralised operations. These services are integrated directly into the primary blockchain-based protocol, serving as the foundation for all other components. By doing so, they reinforce the core without depending on external frameworks or systems.
There are several key approaches to Layer-1 scaling, including:
â—ŹÂ Block Size Increase
Increasing the block size is a simple solution, accommodating more transactions in each block.
â—ŹÂ Block Time Reduction
Diminishing the time gap between block creation can speed up system transaction execution. Nonetheless, maintaining network stability and security is crucial and requires a careful balance.
â—ŹÂ Sharding
A forward-thinking solution involves dividing the public ledger into smaller segments called “shards.” Each of these shards can manage transactions separately and contemporaneously. As a result, the distributed ledger network’s efficiency is increased exponentially, leading to a higher volume of transactions without overwhelming any individual node with excessive data.
â—ŹÂ Consensus Model Transition
A consensus protocol such as proof of stake (PoS) can reduce the energy consumption required for transaction validation compared to proof of work. Additionally, PoS can simplify the validation process, making it possible to validate a larger number of operations efficiently.
Layer-2 Solutions
Layer-2 scaling programs are developed to strengthen the network’s scalability by building on the foundational Layer-1 protocols.
Offloading a significant amount of data from the congested main chain is made possible with the help of these solutions. One notable benefit of devising an off-chain transaction channel is the ability to develop more complex applications that require frequent and cost-effective operations.
Among the many variations on L2 approaches are:
â—ŹÂ State Channels
Users can carry out a number of operations off-chain and settle the outcome on the public ledger. The Lightning Network for BTC and the Raiden Network for ETH are examples of such applications that offer instant operations at a lower cost.
â—Ź Zero-Knowledge Rollups (zk-Rollups)
zkSync and Hermes Network are capable of bundling a variety of requests into a single one in an efficient manner. They use Zero-Knowledge Proofs to validate that the operations remain valid and verifiable without revealing any details on the primary chain.
â—ŹÂ Optimistic Rollups
Off-chain transaction handling is possible using specific tools that provide only condensed information to the main chain. These tools, such as Optimism and Arbitrum Rollup, rely on the security of the underlying L1 framework to safeguard assets.
â—ŹÂ Sidechains
Specific frameworks like Liquid Network for Bitcoin and xDAI Chain for Ethereum work in parallel with the core framework. These frameworks offer asset exchange and portability opportunities without placing additional load on the main chain.
The Bottom Line
The scaling systems play a crucial role in tackling the challenges faced by blockchain’s rapidly expanding digital economy. They address the growing pains and serve as a testament to the industry’s innovative spirit that drives its progress.
As blockchain steadily advances to widespread application, the unimpeded interconnection between L1 protocols and L2 scaling technology becomes increasingly significant. This collaboration will be pivotal in shaping a robust, adaptable, and scalable blockchain-based architecture.
