The rapid growth of decentralized finance (DeFi), non-fungible tokens (NFT) and games has increased the popularity of the Ethereum blockchain and made it more crowded. Given that the current capacity of the Ethereum network is such that it only supports 15 transactions per second, this congestion will create bottlenecks and increase fees.
Also, some decentralized applications (dApp) built on the Ethereum blockchain is sometimes unusable because of this congestion.
Migrating Ethereum to a stock-based network that uses the “Sharding” technique could alleviate some of the pressure on the first layer. To do this, Ethereum divides the new network into several shards or sub-chains to distribute pressure across different shards and reduce transaction congestion and transaction capacity.
However, it will take several years to fully implement the new Ethereum network (called Ethereum Layer 2.0), and there is currently no sign of declining demand for Ethereum network in the near future.Hence, the urgent need for scalability solutions has led to the acceptance of layer 2.0 technologies instead of focusing on improving the performance of the Ethereum core layer.
The layer 2.0 and related technologies offer different solutions for atrium scalability, each with its own advantages and costs. Some of these solutions are:
Plasma, Sidechains, State Channels and Payment Channels, Optimistic Rollups, ZK-Rollups, Validium, Aggregator protocols.
Plasma blockchains are separate folds that attach to the Ethereum. Because these chains are like small copies of the Ethereum main network, they are also called “child chains”. Child chains use a combination of smart contracts and cryptographic authentication methods to reduce the burden of transactions on the parent chain.
Each plasma chain has its own mechanism for block validation and reports periodically to the main Ethereum chain. They use Ethereum Security to resolve the discrepancy if they encounter discrepancies over the approval of destructive transactions.