Ethereum 2.0 vs. Layer 2s protocols
The launch of Ethereum 2.0 has undoubtedly sent chills down the spine of most crypto enthusiasts. However, some are still curious to know what effect this big Merge would have on the L2 space, given that the purpose of the Merge is pretty similar to that of L2s — to improve Ethereum’s overall infrastructure.
Interestingly, most crypto experts have suggested that the Merge will not only improve the Ethereum ecosystem but also magnify the impact of L2, making it more efficient. Let’s explore more details about Ethereum Merge and what it means for Ethereum Layer2 protocols.
What is the Merge?
Simply put, the ‘merge’ is an Ethereum upgrade representing the transition of the Ethereum network from the expensive proof-of-work (PoW) system to a more user-friendly proof-of-stake (PoS) blockchain system.
It’s aimed at improving the overall functionality of the Network, driving a host of innovations to the Network.
On a lighter note, The Merge means the existing Ethereum Mainnet integrates with a different proof-of-stake blockchain known as the Beacon Chain, now existing as a single chain.
Proof of stake essentially replaces miners with Validators. Instead of the usual way of securing the Network via mining, validators secure the platform by staking their token. This concept significantly reduces Ethereum’s energy consumption. But what does this have to do with Layer 2s?
What is Layer 2?
Layer 2 protocols are scaling solutions aimed at improving the overall performance of layer 1 networks. Think of it like a Marketing team — if every PR and publication had to be done by the marketing head every single time, it would eventually wary the person involved making every process slow and inefficient.
In the same manner, Layer 2 protocols implement this concept by dividing each transaction and removing the burden of processing transactions from the main chain, thereby improving scalability and transaction speed.
Layer 2 solutions such as Polygon, zkSync, and more are built on the Ethereum network to reduce gas fees and boost the overall functionality of the Network.
Now, since the Merge is aimed at improving Ethereum’s throughput, which is pretty similar to Layer2 scaling solution, does this mean it’s the end for the Layer2 ecosystem? Let’s explore.
How does this Merge affect Layer2 Protocols?
Several crypto experts believe the Merge won’t have much effect on the Layer 2 network since the Merge is still unfolding and won’t solve the scalability issue yet.
Additionally, the Merge promises an improved speed of up to 10,000 TPS, which is still not enough for blockchain to gain massive adoption. So even with the promising speed of Ethereum 2.0, Layer 2 will further foster this speed, making it a hundred times faster than the usual speed. Hence, the coexistence of Ethereum 2.0 and Layer protocols will further birth new use cases the way users have never seen before, especially in the DeFi space.
Wrapping up
On the brighter side, the Merge and L2s will complement each other. Furthermore, as more upgrades are introduced within several L2 blockchain platforms, users will enjoy improved interoperability and diverse innovations with Ethereum 2.0
Disclaimer: The opinions expressed in this blog are solely those of the writer and not of this platform.
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