Launching Layer 2 services for enterprises to scale their application at a lower and optimal fee

Launching Layer 2 services for enterprises to scale their application at a lower and optimal fee

10 May, 2021

We are all aware that right after the DeFi summer of 2020, public blockchains like Ethereum have seen a sudden spike in the number of transactions and users. Although the usage of a public blockchain is ever increasing, the mainstream adoption of such platforms by enterprises is hindered by some unsolved challenges such as scalability and privacy. Meanwhile, advanced solutions are being implemented to address these issues for companies looking at public blockchain networks.

According to CoinTelegraph, one of the most critical developments to enable public blockchain is known as the Layer 2 scaling solution. Layer 2 networks are not a new concept, but many Layer 2 scaling solutions are currently being developed to meet the requirements of the enterprise.

"Instead of running all transactions directly on the blockchain, you can run them on a Layer 2 instance that can significantly reduce the number of transactions per second and considerably reduce the number of transactions per second, but it is essential. The good news is that Layer 2 is protected by Layer 1, so you can continue to get many of the same security guarantees provided by the underlying blockchain."

Blockchain scaling in a nutshell:

There are currently two approaches to scale blockchains.

  • Scaling the base layer/consensus layer (L1 Scaling)
  • Scaling using solutions on top of Layer 1 that do not require any modification to the base layer (L2 scaling)

Both the approaches follow specific techniques to achieve better results.

L1 scaling:

  • Parallelization via sharding (Eg: ETH2.0)
  • Increasing the block size for more capacity.
  • Efficient signatures reduce transaction size (Eg: Schnorr)

L2 scaling:

  • Payment and State channels
  • Plasma (Smart Contracts in the form of Merkle Trees)
  • Sidechains (EVM compatible)
  • Optimistic and ZK Rollups

Implementing one of these scaling techniques offers numerous advantages when combined with the other, meaning a 10x improvement in the base layer. A 100x improvement in the second layer could quickly compound to an overall 1000x enhancement in the throughput.

At Nodeberry, we try to remove the challenges that the current enterprise infrastructure faces. We are now all set for providing Layer 2 scaling services for the enterprises to achieve increased throughput, reduced transaction costs, strong public chain security, and interoperability with other applications built on it. We’ve achieved 100% success in our research on the implementation of Layer 2 smart contracts which can open up new ways for businesses to evolve.

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