Speed vs decentralization: could L2 solutions undermine cryptocurrency core ethos?
The layer-2 (L2) scaling solutions ecosystem is booming. Can crypto achieve scalability without sacrificing decentralization? The congestion and high transaction fees in established blockchains like Ethereum (ETH) and Bitcoin (BTC) have sparked a need for additional solutions to handle the increased demand. The L2 sidechains such as Arbitrum (ARB), Optimism (OP), and Polygon (MATIC) emerged as an attempt to enhance transaction capabilities while ensuring smooth and orderly operations. In short, layer-2 solutions are additional protocols or frameworks constructed on existing blockchains to improve scalability and transaction throughput. They come in various forms, such as rollups, state channels, and sidechains. They alleviate the computational load on the main chain by offloading it to a secondary layer while ideally ensuring security and decentralization. Optimistic rollups, like Arbitrum and Optimism, take a trust-but-verify stance, treating transactions as valid unless a chal...