The Optimistic Layer 2 Wars

Metis
13 min readMay 7, 2021

By Alfonso de la Rocha

In the past few months, the price of ETH has surged, and the usage of the Ethereum network has significantly increased. The main culprits for this trend have been the renewed interest in NFTs and the consolidation of DeFi applications, along with the outstanding growth of the cryptocurrency market. This has resulted in a number of “not so pleasant” consequences for DApp developers in the Ethereum ecosystem: mainly, the network’s inability to accommodate the increase in usage leading to high gas costs (even more if you want your transaction to be validated in the next few blocks). At the time of writing, the average gas fee in the Ethereum mainnet is of approximately $15.

This new scenario we are facing in the Ethereum ecosystem has shifted layer 2 improvements overnight from a “nice to have” feature to an “utmost requirement” for Dapps to be able to operate sustainably in terms of performance and cost. Fortunately, we already have several consistent layer 2 platforms and protocols to help us in this quest. One of the most promising foundational constructions to build layer 2 solutions are optimistic rollups. Many projects are built upon them, but how can we choose the layer 2 solution based on optimistic rollups that best fulfills our needs? This publication is an attempt to answer that question, making a comparison of the three promising layer 2 solutions based on optimistic rollups. Let’s jump right into it!

What are rollups? And why are they optimistic?

In order to be able to compare different layer 2 solutions based on rollups, we first need to make a quick detour to understand what optimistic rollups are. Rollups are solutions that bundle (or “roll up”) sidechain or off-chain transactions into a single transaction that is then committed to L1. To secure all of these bundled transactions, and to make them individually verifiable, a cryptographic proof is generated from the bundle.

A requirement for rollups to work is to have some kind of Ethereum-compatible independent blockchain, with a reduced number of nodes or with additional features for high-performance, that is responsible for handling signature verification, contract execution, etc. This makes the independent blockchain able to verify the validity of the…

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