Vitalik Buterin: Layer 2 is the Future of Ethereum Scaling
Ethereum (ETH), the second largest cryptocurrency by market cap, reached $500 billion market cap for the first time this month, according to CoinGecko data. With the high growth of decentralized finance ( DeFi ) applications and NFTs (non-fungible tokens), scalability has become a much more important issue for Ethereum.
Buterin: One Way Layer 2
In his speech at the 2021 Shanghai International Blockchain Week, Ethereum founder Vitalik Buterin said that Layer 2 (layer 2) solutions are very important for the blockchain and are the only way to scale the Ethereum network while maintaining decentralization.
Emphasizing the importance of making the Ethereum network more scalable, Vitalik Buterin gave some specific examples stating that the transaction fees in the network will decrease with the updates made during the process.
Off-Chain Scaling Solutions
Scalability is the ability of a blockchain network to meet increasing demand. According to Ethereum founder Vitalik Buterine, he came up with a concept to describe the challenges blockchains face. According to Buterin’s theory, blockchain networks must strike a balance between the triad of scalability, security, and decentralization. All three contradict each other. Focusing on the other two features weakens the other. Therefore, the prevailing view is that security and decentralization should be maximized and scalability should be achieved with off-chain solutions. The concept of layer 2 mentioned here also refers to solutions that are not on the original Ethereum blockchain, but work on a higher layer added to the network.