BigONE Insights: Will Layer2 Survive The ETH Merge?
Since the long-awaited ETH merge, the big question has been what happens to Layer-2 networks after the merge. On September 14th, Ethereum switched from proof-of-work to proof-of-stake consensus. The Ethereum ecosystem was able to keep energy consumption to a bare minimum. The Ethereum network used 112 TWh of energy per year before the merge, which is said to have reduced the energy consumption to 0.01 TWh per year. Carbon emissions and energy footprints have always been the primary concerns of ETH’s proof-of-work. These concerns influenced the development of layer-2 networks like Arbitrium and Polygon. The question is, now that the energy risks on the Ethereum Layer-1 have been mitigated, what is the significance and future of Layer-2 networks in a post-merge world?
Let’s look at Layer-2 networks and how they have helped increase the adoption rate on the Ethereum blockchain.
Over the years, we’ve seen several blockchain innovations that provide major benefits such as transparency and security. The most prominent blockchain innovation, cryptocurrency, has evolved and changed the status quo in the global financial sector. However, the problem has always been scalability due to congestion caused by traffic, which is experienced by even the most popular blockchain in the world, Ethereum.
Blockchain systems should be able to handle an unlimited number of transactions per second, but the throughput of the most commonly used blockchains falls far short of this. It takes a long time for processing power to replace a centralized system due to the level of decentralization and privacy provided by blockchains. The node network must recognize and validate each transaction due to the processing power.
Several approaches have been examined in order to solve scalability issues and improve blockchain capability. The Ethereum merge has helped solve basic problems like energy consumption but still has a long way to go before the ETH network is “self-sufficient”. It is worth noting that Layer-2 Solutions is a very efficient method and they help to reduce transaction times and fees, making blockchain networks more convenient, effective, and efficient.
Layer-1 Blockchains like Ethereum represent the foundational layers and layers of blockchain innovation. This foundation layer makes it possible for crypto assets to have value in a decentralized ecosystem.
Layer-2 blockchains were created as a layer built on top of a layer-1 network to help with scalability and other efficiency issues on Layer-1 networks. Layer-2 networks are designed to help the blockchain ecosystem grow by making transactions more affordable and sustainable.
Because Ethereum is the most popular blockchain, congestion and scalability are severely limiting and inhibiting its growth. We’ll see how far the network progresses now that the Ethereum merge is complete. However, Layer 2 solutions continue to contribute to Ethereum’s long-term viability by providing scalability and increased throughput. Although we must admit that the merge improved many aspects of the network. For the time being, Layer 2 networks will continue to ensure transaction security, speed, and scalability on the blockchain.
Each Layer-2 solution has its own set of pros and cons to consider, such as gas costs, security, scalability, and, of course, functionality. No single layer 2 solution can currently meet all of these requirements. BigONE, on the other hand, believes that these solutions help to improve functionality and speed up development in the blockchain sector.