People expect Ethereum to become the primary infrastructure for global open applications. However, because of the unique design of Ethereum, this growing network is expensive and slow to use when demand is high-after all, there is only so much block space available per unit of time.
Although, the Ethereum blockchain may rely on “Eth2” to greatly increase the transaction throughput of the base layer. The better news is that we don’t have to wait for Eth2 to achieve throughput expansion.
The solution available immediately is the Layer-2 (L2) scalable solution.
The basic idea of the Layer-2 solution is to build on Ethereum and directly rely on the security and finality of Ethereum, but transfer the transaction processing requirements on the main chain to off-chain, so as to achieve near-instant transaction processing speed and Appropriate transaction costs-the scope of functions is the same as that of the bottom layer of Ethereum, transfer, transaction, and pledge tokens can all be realized.
L2 is not an illusion still on paper. Many L2 solutions have been launched, and new L2 solutions and integrated solutions seem to be exploding every day. At the time of writing this article, approximately $300 million worth of value is protected by L2 projects; the technical models used in these projects can be divided into two categories: ZK Rollup and Optimistic Rollup.
The era of L2 expansion schemes has arrived, and this is just the beginning. If you are interested in becoming a trendy player, now is the perfect time to try and evaluate various L2 solutions. So, which of the L2 services currently available is the best?
We have listed 7 great L2 services here, let’s take a look!
1. Use AAVE to lend funds/loans on Polygon
Earlier this year, Matic-a project revolving around the Matic Plasma chain and Matic PoS sidechain-was renamed Polygon and transformed into a commitment to “making Ethereum the Internet of blockchains.”
The implication of this rebranding is that the team will begin to embrace optiimistic rollup, zk rollup, and so on.
Soon after, the popular DeFi lending agreement, Aave, announced the New Frontiers plan to test a variety of scalability solutions and allow users to choose. The first integration activity that Aave disclosed was to access Polygon’s PoS sidechain.
It is worth reminding that the side chain does not directly inherit the security protection of Ethereum like most L2 solutions, but it provides the same throughput improvement as L2. And from the New Frontier event, it is very likely that Aave and Polygon will collaborate with each other in the direction of advancing rollup integration.
At the same time, you can process your Aave loan/lending funds at a cheaper cost on the Polygon sidechain. You must first add the Polygon network to your MetaMask plugin wallet, and then click on the “Polygon” tab on the Aave website, and then you can see the situation in this market.
2. Trading decentralized perpetual contracts
dYdX is a decentralized exchange known for providing decentralized margin trading, spot trading and perpetual contracts on Ethereum.
Traders certainly want the transaction speed as fast as possible and transaction costs as low as possible. And dYdX just announced the launch of the L2 perpetual contract trading system, with StarkWare’s StarkEx scalable engine as the core.
StarkEx is both powerful and flexible. It can not only support on-chain data availability (also known as zk rollup), but also adapt to off-chain data availability mode (also known as Validium), which is impressive). No matter which camp you want to divide it into, it will definitely bring dYdX’s perpetual contract trading to the next level. dYdX’s L2 already contains perpetual contract trading pairs:
If the derivatives are yours, you can go to the Perpetuals dashboard of dYdX. You can deposit funds directly into the L2 system there and start trading directly!
3. Earn SNX pledge rewards
Synthetix is also the leader of the DeFi world derivatives project. As long as an asset exists, whether it exists on a blockchain or in the real world, it can theoretically be traded on Synthetix in the form of a synthetic asset on the chain (price fluctuations).
The core of this powerful agreement is staking (staking). You deposit Synthetix’s native token SNX into a fund pool controlled by the agreement contract as collateral. Providing such a service can be rewarded: SNX pledgers can obtain additional SNX rewards and the user’s transaction fee dividends in the Synthetix exchange. This is the core incentive mechanism behind staking SNX.
The fun thing is that now you can pledge SNX on L2! From the beginning of 2021, the SNX pledge business began to run on Optimistic Ethereum L2 developed by the Optimism team. As the name suggests, this is an optimistic rollup scheme.
If you are interested in this novel staking method, you can use Synthetix’s staking dashboard to deposit SNX and transfer your pledge deposit from L1 to L2. However, both Synthetix and Optimistic Ethereum are still very immature-the function of trading synthetic assets and other core functions have not yet been integrated. In addition, it takes about 7 days to withdraw money from optimism. In other words, don’t deposit money that you might need in a hurry! Although it is still early, there are rewards for participating in the development of the western region.
4. Liquidity mining LRC rewards
Since the emergence of yield farming last summer, the craze has never been pushed forward. Simply put, you provide liquidity and therefore help fledgling projects to grow up, so you can get the token rewards of the project (the so-called “yield”).
However, if there is a lot of congestion on the blockchain, the cost for users to do liquidity mining on Ethereum is very high. All authorization, deposit, pledge and withdrawal transactions will cause the cost to rise steadily!
But liquid mining does not have to be so painful. A notable example is Loopring’s L2 liquidity mining. Loopring is an exchange and payment protocol supported by zk rollup technology. The developer of this project also created the Loopring exchange to provide users with automated market maker (AMM) exchange services on L2.
Because the prosperity of the AMM exchange relies on liquidity, Loopring is carrying out liquidity mining activities to attract liquidity. As long as users who provide liquidity for Loopring, they can get the project’s native token LRC as a reward.
If you are very optimistic about the prospects of the L2 scalable solution, and also optimistic that Loopring will make a big difference in it, this time LRC liquidity mining is worth considering. You can start from the Loopring website, first deposit the assets into their L2, and then deposit into your favorite pool!
5. Trade DeFi tokens on DeversiFi
The same is StarkWare’s StarkEx scalability bottom layer, DeversiFi is an efficient, one-stop decentralized exchange, their functions include limit orders, OTC transactions and free transfers.
These features naturally make them very suitable for trading popular DeFi tokens, such as UNI, MKR and AAVE.
Of course, the Loopring AMM mentioned above can also be used to trade DeFi tokens, this is not DeversiFi’s unique secret recipe.
Advanced traders may prefer DeversiFi because it provides more features (compared to standard AMM exchanges), so if you are looking for a transaction-centric L2 application, don’t miss DeversiFi.
6. Donate money to the projects listed on Gitcoin
We know that many projects around the world of Ethereum and DeFi are built on the model of open source software. This is why everyone has recently paid attention to Gitcoin, which is a platform that helps open source software developers around Ethereum, DeFi, and so on to get income.
Gitcoin is most famous for its Gitcoin Grant, which means that projects can be funded by crowdfunding, and there are two channels: directed donation and quadratic funding. Although projects can receive donations at any time on Gitcoin, what’s even better is that the Gitcion platform now has integrated support for zkSync. Users can donate through L2, anytime, anywhere, and save gas fees.
The whole process is very simple. Add the item to your shopping cart, go to the payment page, and select the “Use zkSync to pay” option. At this point you will be directed to a web page to help you deposit funds in L2. You not only save a lot of gas fees, but also support the ecology of Ethereum, the best of both worlds.
7. Use Chuanliu Payment on Superfluid
Superfluid is a set of stream money (stream money) protocols. Users can use this to create a payment stream and pay funds in real time without interruption. This protocol uses two different expansion schemes-xDAI and Polygon-so users can choose for themselves.
If you have ever imagined a DAO that can handle multiple revenue streams and use a portion of the revenue to reward contribution value, or an NFT that represents music copyright and pays the proceeds to its holders in real time, then Superfluid is built for this.
The coolest part is that in Superfluid, the stream will not be locked and can still be transferred freely between accounts. You can split and merge your income stream as you like-if you are receiving a token, you can forward it to any account you specify, and the same is true for that recipient. This is essentially an interconnected network composed of real-time interactive wallets!
The golden age of L2 has just begun. As the top L2 solution continues to innovate rapidly, iterate and deliver powerful and usable products, the entire ecosystem will develop further.
The zkSync team has just announced the launch of zkPorter, an unprecedented scalable system, and there is no small chance that it will become the primary extension architecture of the Ethereum ecosystem in the next few years.
Some well-known applications, such as Uniswap, are also about to launch their L2 integration solutions.
In addition, there are some solutions dedicated to ease of use, such as Connext’s Vector, which can be used as the center to connect Ethereum to all L2. The shadow of scalability will soon become a thing of the past.
Ethereum is expanding, it is already expanding.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.