What will happen to layer 2 networks?

Abiky

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Quote from: icalical on September 01, 2022, 08:22:01 AM

can't really tell until we actually see how the PoS scale ETH network and how it affect the fee, will it actually reduce the gas fee significantly? If yes, then those layer 2 projects will be obsolete. It has no point to use layer two for ETH when the mainnet already has low fee.

PoS won't reduce gas fees, but subsequent network upgrades will. Sharding is one of the most anticipated scaling techniques that will reduce gas fees and increase transaction throughput on the main chain by a long shot. Even though ETH by itself will become cheaper and faster than ever, Layer-2 networks will still be useful for micropayments and other sorts of things. They won't go away, because such networks will always be cheaper and faster to use than the main chain itself. The same can be said about Bitcoin's Lightning Network. Besides, the Blockchain will always be prone to congestion no matter how scalable it becomes. Off-chain scaling solutions help bring the masses into the world of crypto, so they will be with us for a long, long time. Just my thoughts Grin

icalical

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can't really tell until we actually see how the PoS scale ETH network and how it affect the fee, will it actually reduce the gas fee significantly? If yes, then those layer 2 projects will be obsolete. It has no point to use layer two for ETH when the mainnet already has low fee.

samuraijin

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Ethereum took a decision that made everyone wonder, why they didn't fix the issue regarding gas costs which are still high, why is it too hasty to develop 2 concepts into one, while the whole community is already defeated for the gas problem, at least the development team can fix it This problem is not just discussing the merging of 2 concepts.

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Quote from: minairia3 on August 27, 2022, 10:28:30 PM

But unfortunately as @fuguebtc said, upgrading to POS will not make ethereum cheaper as we thought, gas fees will start low when ethereum gets other upgrades like sharding...and it will be in the coming years not this year.

Layer 2 projects will remain unaffected by this upgrade of ethereum, additionally it will provide ethereum with more scalability and reduce pressure on ethereum's main blockchain.

Yes. Only a major network upgrade targeting the Blockchain's transaction capacity will help reduce gas fees and decrease transaction wait times. Even though the main ETH blockchain network will scale at some point in the future, Layer-2 networks won't be going anywhere because they prove to be an "extra boost" at times when the network becomes heavily congested. No matter what upgrades developers add to help improve the main chain's scalability, the network will be prone to clogging if the same becomes extremely popular. That's where scaling solutions like Arbitrum (ETH), Optimism (ETH), zkSync (ETH), and the Lightning Network (BTC) come in.

It's often best to have a separate scaling solution for the Blockchain to help protect decentralization as much as possible. Scaling only the main chain would increase storage and bandwidth costs for nodes, effectively making the Blockchain centralized (as only a few will be able to run the nodes). BCH ultimately failed with its on-chain scalability, so Layer-2 will be here to stay for a long, long time. Just my thoughts Grin

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Quote from: Prince Malik on August 21, 2022, 09:20:37 AM

Eth merge is happening and soon we may see a super low transaction fees for eth transactions, the question is what will happen to layer 2 projects like arbitrum and optimism? They doing really great in scaling Ethereum with swap fees no more than 0.2$ but the question is if will keep existing in the future

That is also the big question that i have asked myself quite a lot in the last few days. I personally think that even if the merge will be successful and everything is running as expected we still have to wait and see how the consequences for the transaction fees on the ethereum network will be. It will be especially interesting to see how high the transaction fees will be when the network becomes congested during a dump or a pump.
If the transaction fees on native Ethereum can really stay low even at a high congestion then i think that layer 2 solutions don't really have a reason to exist anymore to be honest, but of course we will have to wait and see.

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Good question, it looks like many layer 2 projects will be abandoned after Ethereum merge and PoS is active but I don't see things that way, I believe whatever will happen depends on project builders ( developers ), we can't tell them to start building on Erc 20 if they believe that Matic is the right place to be, see? Layer 1 and 2 projects will survive because many developers will still prefer them than Ethereum.

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Quote from: minairia3 on August 27, 2022, 10:28:30 PM

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Quote from: Prince Malik on August 21, 2022, 09:20:37 AM

Eth merge is happening and soon we may see a super low transaction fees for eth transactions, the question is what will happen to layer 2 projects like arbitrum and optimism? They doing really great in scaling Ethereum with swap fees no more than 0.2$ but the question is if will keep existing in the future

With expensive transaction fees like now ETH can survive and become the choice of many projects, of course all investors know with the reputation of ETH which has become the strongest altcoins, if later the transaction costs become cheap, of course we think positively that the higher the transaction volume will occur.

But unfortunately as @fuguebtc said, upgrading to POS will not make ethereum cheaper as we thought, gas fees will start low when ethereum gets other upgrades like sharding...and it will be in the coming years not this year.
(...)

Exactly. This is the common misconception or wrong impression of the upcoming "The Merge" event for Ethereum, it will not make the transaction fee lower after the merge, very wrong. This event (The Merge) is the transition from Proof of Work - (POW) to Proof of stake (POS).

It is stated here: Misconception: "The Merge will reduce gas fees."

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Quote from: Prince Malik on August 21, 2022, 09:20:37 AM

Eth merge is happening and soon we may see a super low transaction fees for eth transactions, the question is what will happen to layer 2 projects like arbitrum and optimism? They doing really great in scaling Ethereum with swap fees no more than 0.2$ but the question is if will keep existing in the future

With expensive transaction fees like now ETH can survive and become the choice of many projects, of course all investors know with the reputation of ETH which has become the strongest altcoins, if later the transaction costs become cheap, of course we think positively that the higher the transaction volume will occur.

But unfortunately as @fuguebtc said, upgrading to POS will not make ethereum cheaper as we thought, gas fees will start low when ethereum gets other upgrades like sharding...and it will be in the coming years not this year.

Layer 2 projects will remain unaffected by this upgrade of ethereum, additionally it will provide ethereum with more scalability and reduce pressure on ethereum's main blockchain.

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Quote from: fuguebtc on August 24, 2022, 09:19:57 PM

The merge will not cause Ethereum gas fees to drop rapidly as the goal of the merger is to move Ethereum from POW to POS to reduce the energy consumption of the Ethereum blockchain. In order to reduce gas fees and speed up the transaction process, it is necessary to wait for the next update. As a result, this upgrade does not affect Layer2 projects in any way, they will continue to support scaling for the ETH network.

Exactly. The Merge will only make ETH more energy efficient. But the real deal will happen in subsequent network upgrades targeted to improve the underlying Blockchain network's transaction capacity. Sharding and Layer-2 scaling solutions will make ETH a force to reckon with. I simply don't get why there's a lot of hype surrounding the PoS upgrade when we've already had PoS coins even before Ethereum's Vitalik Buterin announced it. People think this is innovation, but they've got it all wrong. I wouldn't be surprised if ETH hits the ceiling right after "The Merge" is complete.

No matter how scalable the main blockchain network becomes, Layer-2 scaling solutions will always be necessary to help reduce future Blockchain bloat. The main objective is to include as much people as possible into decentralized cryptocurrencies in order to become a huge contender of existing Fiat currencies. With scaling solutions on the way, crypto will become truly unstoppable. Just my opinion

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Quote from: Prince Malik on August 21, 2022, 09:20:37 AM

Eth merge is happening and soon we may see a super low transaction fees for eth transactions, the question is what will happen to layer 2 projects like arbitrum and optimism? They doing really great in scaling Ethereum with swap fees no more than 0.2$ but the question is if will keep existing in the future

The Ethereum blockchain swap fee is not 100% determined by the blockchain, but also depends on the swap platform it uses. The swap process costs three times, namely the confirmation fee is twice, and the platform fee is taken based on the swapped coins. Although arbitrum and optimism have low costs, of course the Ethereum blockchain cannot be separated from the two projects. $0.2 is the equivalent of 0.16 OP, I don't think it's a small amount if the OP's price gets high.

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The main problem now lies in the amount of fees when transacting when using the eth network.So that users prefer to use the BSC and Polygon networks in every transaction they make.But it all depends on how much influence it has when merging eth in the future. If users feel that they benefit from this merger, then they will definitely use this network in every transaction they make.But on the contrary

The merge will not cause Ethereum gas fees to drop rapidly as the goal of the merger is to move Ethereum from POW to POS to reduce the energy consumption of the Ethereum blockchain. In order to reduce gas fees and speed up the transaction process, it is necessary to wait for the next update. As a result, this upgrade does not affect Layer2 projects in any way, they will continue to support scaling for the ETH network.

Abiky

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Quote from: Prince Malik on August 21, 2022, 09:20:37 AM

Eth merge is happening and soon we may see a super low transaction fees for eth transactions, the question is what will happen to layer 2 projects like arbitrum and optimism? They doing really great in scaling Ethereum with swap fees no more than 0.2$ but the question is if will keep existing in the future

Not exactly. The ETH blockchain will still remain under heavy load due to it being the most popular smart contracts platform in the world. PoS would only have a positive effect over ETH's energy consumption, but that's it. The real deal would be scaling ETH through Layer-2 scaling solutions like Arbitrum and Optimism. I don't think such solutions will disappear, since they can prove to be useful at times where ETH's congestion becomes uncontrollable. When you have a PoS-enabled ETH blockchain, Sharding, and Layer-two scaling solutions, then you'd get an unfathomable experience in "De-Fi" beyond compare.

I think the combination of different scaling techniques in ETH, BTC, and other chains would help them reach large masses of users without experiencing any drawbacks whatsoever. I'd prefer to use a Layer-2 scaling solution that is decentralized, than a scalable smart contract platform like Solana which is highly centralized. The future is all about off-chain scaling solutions and interoperability in order to make crypto/Blockchain land a better place. Who knows if major cryptocurrencies reach higher prices because of increased mainstream adoption? Just my thoughts Grin

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Quote from: Prince Malik on August 21, 2022, 09:20:37 AM

Eth merge is happening and soon we may see a super low transaction fees for eth transactions, the question is what will happen to layer 2 projects like arbitrum and optimism? They doing really great in scaling Ethereum with swap fees no more than 0.2$ but the question is if will keep existing in the future

We "may" only, it means it is not sure yet if the new eth will bring back the old eth that we know where the fees are more affordable. The two coins that you mentioned still have a chance to continue their good performance because they are still being preferred by most people especially those who are in budget because they can't just afford the high fees in ethereum right now but if ever eth returns to normal, I am afraid that many people are going back to it and those two coins that you mentioned will become weaker.

If you invest on them, you need to slowly sell them now and you can put the profit that you will be getting in ethereum.

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They're there to help ETH users make transactions cheaper but if eth already has lower price and is faster they may leave the layer 2 project So i'm waiting for this merger to work and to get a low fee so i can sell my tokens on the eth network Layer 2 extends ethereum as a distinct blockchain over layer 1 s network It communicates and offloads the mainnet's enormous transaction load through smart contracts that include ethereum's decentralised security concept Lyer 1 handles security data availability and decentralisation whereas Layer 2 scales transactions reduce costs Layer 2s consolidate off chain transactions into on layer 1 transaction reducing the data burden mainnet transactions maintain security and decenttralisation usefulness layer initiatives can improve the user experience and expand applaction scope with higher Tps and reduced prices.

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Quote from: CuriousGeorge on August 21, 2022, 07:41:39 PM

Nothing happen. There will be no a big change with it. Layer 2 blockchain will still remain exist. The fact that if there would not be a change in ethereum as well. I think that people are taking it in a wrong way. Let's see what's gonna happen with it whether you will be getting right result about ethereum scalability or not. I think that people will always prefer to use the second layer blockchain instead of first layer with huge fees like ethereum.

The eth team didn't say that once ethereum merged is completed, the layer 2 will now disappear. Layer 2 are already created, so they will remain but what people are afraid of is that the layer 2 coins will get weaker because many will return to eth once eth fees returns to normal but you said it will not happen? Ouch, I think people that hope for it are going to be hurt once again because this isn't the first time they hope for that but every eth upcoming updates they always say that eth fees will return to normal but anyway there are still layer 2 which can be a good alternative to eth because they have a cheaper fees and they are also fast.

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they are there to help ETH users make transactions cheaper but if ETH already has a much lower fee and faster they might leave the layer 2 project, so I am waiting for this merger to work and get a low fee to make it easier for me to sell my tokens on ETH network

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Could always pivot their system to something else. The biggest problem with Layer 2 projects is that they are usually not decentralized, they have creators and developers which mean that they are working overtime to make it better. So, if one day things go south, they could always try to do something else and go with the flow and change their features to apply for the brand new better tech.

I am not saying all will do that, some will stay and try to get more attention, but the option is there to change it to the better version if they ever want to. Hence why I believe it would not be really that much of a trouble for them in the long term.

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Quote from: ANSEL_2.0 on August 21, 2022, 02:13:02 PM

Developers have the right to choose, Ethereum is good but there are many options for developers, Ethereum has good utility but some.layer 1 projects have something better too so its left for developers to make a choice to their tastes.

I think that you are going a bit out of topic from the discussiong. It's about whether the ethereum merged will have an impact to the layer 2. In my opinion if merged has nothing to do with second layer solution. It's not about the dev choose based their taste. It's about the technical specs from the blockchain that can give a lot of benefits to the developers and its platforms. I think that people know this so well.

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Quote from: Prince Malik on August 21, 2022, 09:20:37 AM

Eth merge is happening and soon we may see a super low transaction fees for eth transactions, the question is what will happen to layer 2 projects like arbitrum and optimism? They doing really great in scaling Ethereum with swap fees no more than 0.2$ but the question is if will keep existing in the future

They can just adjust their platform to something that the people can use or overhaul it to some kind of innovative platform in order for them not to die just like that but with the Ethereum update, they tend to lose their business and be forced to do something different if they wanted to join the project as usual. Though they are helping to give people convenience these days, changes are fast to occur in crypto industry and I'm sure they already have a plan B.

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The Merge doesn't actually address Ethereum's transaction fee issues. One of the many myths surrounding the Merge is that it will solve gas fee problems. Actually it doesn't. The Merge is about Ethereum's shift from PoW to PoS. It is not about expanding network capacity. So it is wrong to expect that the Merge is an update regarding gas.

So don't be surprised when after the Merge the gas fees will remain high. It will still be dependent on the traffic. If there is congestion in the network, the gas will increase. If transactions are not highly competing against each other, the gas may decrease.

Please read further:

1. https://indianexpress.com/article/technology/crypto/bursting-five-common-myths-surrounding-the-merge-8099366/
2. https://blockworks.co/the-merge-will-not-lower-ethereum-transaction-fees/

Topic: What will happen to layer 2 networks? (Read 310 times)