Do you know the three cryptocurrency pillars that seem to constantly strive to co-exist but struggle to live in harmony? Well, they are no other but the blockchain trilemma — Security, Decentralization and Scalability.
According to this post on Coindesk, it quoted that “Layer 2 Blockchain Technology is even a Bigger deal than you think.” Layer 2 can be simply referred to as a set of off-chain solutions built on top of the main network (Layer 1) that lessens bottlenecks with scaling and data.
Do you know the three cryptocurrency pillars that seem to constantly strive to co-exist but struggle to live in harmony? Well, they are no other but the blockchain trilemma — Security, Decentralization and Scalability.
Any project that doesn’t satisfy these three pillars is lacking, however that has been the case since the birth of blockchain main network popularly known as Layer 1. From inception of blockchain, It has always been like this on the Bitcoin, solana and Ethereum blockchain — it’s either a project satisfies security and scalability or it satisfies Scalability and decentralization and vice versa, it was impossible to get a project that satisfies the three according to developers.
Let’s not forget that blockchain technology has changed the way we think about trust, transparency and decentralization. While this has led to the increasing numbers of developed blockchain-based applications, it has consequently resulted in high network congestion and slower transactions processing time.
Well, thanks to the Ethereum Layer 2 that utilizes a secondary blockchain built on top of them to help with scalability and speed.
According to this post on Coindesk , it quoted that “Layer 2 Blockchain Technology is even a Bigger deal than you think.” Layer 2 can be simply referred to as a set of off-chain solutions built on top of the main network (Layer 1) that lessens bottlenecks with scaling and data.
Let’s take this instance shared on Coindesk as an example, let’s consider a restaurant kitchen as a case study: If every order of the day that amount to about 100 is made by a single person — from beginning to the end before the order was verified and delivered to the owner; from all indications it’ll be a slow process that could only fulfill a few order within an hour. But Layer 2s are like a Prep station — there's a department for cleaning, for cutting food, for cooking, for assembling dishes that will be able to do their task respectively and more efficiently at a friendlier time frame. And the final person can simply match the order and get it delivered to their respective destinations (the customer).
Thus, we can say that Layer 2 blockchain makes use of the combination of off-chain and on-chain technologies to evaluate and process transactions. As aforementioned, always note that Layer 2 blockchains are particularly important for Ethereum because it has experienced notable network congestion due to DApps built on top of the platform.
Increased Scalability: It’s pretty much interesting to know that layer 2 scaling solution can obviously boost the transactions throughput of a blockchain. Although this is feasible by processing transactions off-chain and settling them on the parent chain.
Stronger security: L2 scaling solution is enhancing security by reducing the loads on the main blockchain — which in turn minimizes the risk of attacks such as double-spending attacks.
Lower transaction fees and speedy transaction time: One of the outstanding qualities L2 scaling solution provides is that — transaction fees are pretty lower on off-chain compared to on-chain. And the time to execute transactions are much faster on off-chain compared to on-chain as well.
The Use Cases of Layer 2 Blokchain:
1: It can be used for Non fungible tokens(NFTs).
2: It can be used for Micropayments.
3: It can be used for Supply Chain management.
4: It can be used for gaming.
5: It can be used For DeFi applications.
It’s evident that Best Layer 2 offers more advantages over On-chain (main blockchain) but note that there are some possible risk that could manifest along the journey, which are as follows:
Centralization: Anything that works against decentralization which is one of the three pillars of blockchain has affected the true meaning of blockchain. And here, there could be some L2 scaling solution that may require a central authority or operator to function effectively; However, this could attract centralization risks.
Security Risks: Layer 2 scaling solution could introduce security risks such as malicious actors exploiting the existing weaknesses in the off-chain network.
Complexity: Simplicity is not always the case. Some Best Layer 2 scaling solutions could be extremely difficult to implement which could require some resource development and expertise.
Interoperability might seem impossible at some points: Do you know that the interoperability between two layer 2 scaling solutions could be challenged? This could be as a result of different solutions using different protocols and technologies.
Immutable X(IMX):
Immutable X is a promising layer 2 crypto with strong potential. Several researchers have proven that Immutable X is one of the first zk-rollups for Non fungible tokens on the Ethereum blockchain. Do you know that its scaling solution is specifically designed to improve the scalability of NFTs and web3 games built on the Ethereum network? Well, keep it in mind that the layer 2 scaling solution lessens congestion on the Ethereum network by batching together hundreds of separate transactions into a single zero-knowledge proof known as ZK-STARK and processing the transactions on the child chain( off-chain).
IMX is the native token and it provides a speedy transaction validation process of up to 9,000 NFT transactions per second, thereby attracting NFT projects looking to benefit from the network’s unmatched speed, scale and flexibility. Some of the top exchanges to buy the $IMX token are as follows : Poloniex, Binance, Coinbase, Upbit, and OKX.
Inspect( INSP):
Inspect is another unique and Best Layer 2 scaling solution cryptocurrencies that is loaded with so many benefits. Do you know that Inspect is a relatively new Layer 2 solution that instantly turns Twitter (X) into a Web3 platform?
Just within a period of launch, Inspect has experienced significant growth and success with an energetic community of about 150,000 members, and a market cap of over $1.16 million at launch.
INSP is its native token and it has a unique cross-chain compatibility that ensures a seamless user experience across various blockchain networks, while its robust verification process guarantees asset authenticity and security. Moreover, you can trade INSP on Pancakeswap, Uniswap and more.