Scaling Ethereum Communities on Layer 2
The state of affairs on Ethereum, the financial computational platform of the future.
The Ethereum Network.
A lot of activity is going on and the network becomes heavily congested. The need for speed is underserved.
The rise of DeFi hosts a battle for liquidity within the decentralised finance project ecosystem. Compound started the quest for liquidity in June, and now: Day by day new incentive strategies are rolled out and users rush to fill the limited seats towards the eternal lands of liquidity.
That comes with a major trade-off: the network is highly expensive to use.
❌ Trustless interaction is too slow for many applications.
❌ Gas prices are wei too high! - $10 for a single cup of ☕️? Anyone?
❌ Chain congestion stops practical innovation of new applications.
...not so far Future:
Rollups - a necessary thing, everything else is dead on delivery.
A distributed collection of global Rollup chains. Can we now consider the problem solved? - Barely, we just shifted the seats.
🗞️ Welcome to the World of Rollups…
…the base technological paradigm to our rescue!
We just unlocked:
✅ Much cheaper transactions
✅ Faster, trustless interactions
✅ scaling for generalised and domain specific applications
🔥 Development Paradigms ✅
🔥 Economic feasibility for small-scale applications ✅
🔥 Serves general and domain specific requirements ✅
🔥 Adoption ⏳
+ Cost savings scales with utilisation. The more transaction on the rollup the
cheaper each one of them becomes. That means: small operators & user groups are
at a disadvantage.
Block submission can be delegated to a third party while preserving trust-less properties. We call it: Aggregator.
⚖️Cost savings propagate to the operators and users. This creates a gas economy
around L-2 and the opportunity for a new utility token (gas-token ⛽).
Re: Decentralization / Composability?
✅Permissionless and trustless properties are preserved.
✅Users can directly interact with the rollup without operators, if needed.
ℹ️A full-node can be implemented inside a dApp and is capable to run fully inside a
You may come up now with:
But doesn’t create this design silos or islands of rollups?
Yes it creates islands. However, developers are already working on tools to connect all kinds of different rollups and sidechain’s. While direct rollup-to-rollup interactions would be a nice feature, the nature of distributed systems makes that infeasible - by definition and technically.
If you heard about ETH 2.0, scaling is achieved via shards (the silos and islands), with the possibility of cross-shard communication. The goal is to support domain specific applications with unique requirements, a general unisex rollup doesn’t fit the bill.
One takeaway, this is the path to the Eth 2.0 vision.
⚠️ It's important to not see rollups as a stopgap before the final ETH 2.0 phase,
the design choices and inner workings of domain specific rollups matches the
nature of ETH 2.0 shards.
Scaling technology like rollups are required for anything practical.
Not only does it enable more throughput, it also cuts the cost down - tremendously by a good 98% and enables a broader set of applications to become feasible on the Ethereum Network.
Lastly, the economic design is external and must be implemented by developers.
That provides great freedom and the possibility for a much nicer 🎂.
🌰 You want to play with our Rollup?
Check out the playground: Nutberry Playground
We will share more Details very soooooon, until then… 👇