Layer2: The Development History and Competitive Landscape of Rollup Technology

Layer 2 is one of the key solutions to address the scalability issues of Ethereum. By building an additional network layer on top of the main chain, it can handle more transactions while maintaining the security and decentralization characteristics of the main chain.

Rollup, as a mainstream Layer 2 scaling solution, achieves this by processing transactions off-chain and "packing" the data into the main chain. Compared to other off-chain transaction solutions, Rollup has the following characteristics:

1. Layer2 is a relatively independent platform where users conduct transactions, and interactions with Layer1 accounts must be achieved through smart contracts.

2. All transaction information is fully recorded on the main chain, solving the data availability issue.

3. Transaction execution and status changes occur on Layer2, but the status summary is published to Layer1 and verified.

Rollups can be further divided into Optimistic Rollups and ZK Rollups, with the difference lying in the method of data validity verification.

The Development History of Rollup

Early Layer 2 solutions include sidechains and Plasma. Sidechains are independent blockchains that are linked to the main chain, allowing assets to be transferred between the two chains. Plasma, on the other hand, is a scalability solution proposed by Joseph Poon and Vitalik Buterin in 2017, which processes complex computations by building a network of child chains.

However, Plasma has issues such as data availability attacks, long exit times, and high monitoring costs. To address these shortcomings, John Adler proposed the Optimistic Rollup solution in 2019.

At the same time, Vitalik Buterin introduced zero-knowledge proof technology in 2018 to verify the validity of state changes, laying the foundation for ZK Rollup. The introduction of the Plonk algorithm in 2019 further propelled the development of ZK Rollup.

Rollup Competitive Landscape

Currently, Optimistic Rollups still hold the majority market share, but ZK Rollups are rapidly emerging.

Optimistic Rollups

The representative solutions include Arbitrum and Optimism.

Arbitrum launched its mainnet in September 2021 and is currently the Layer 2 protocol with the highest TVL. Its ecosystem includes three networks: Arbitrum One, Arbitrum Nova, and Arbitrum Orbit, each targeting different application scenarios.

Optimism launched its mainnet in August 2021, boasting the second largest TVL in Layer 2. It achieves EVM equivalence and has released the open-source modular toolkit OP Stack, enabling developers to build customized Layer 2 networks.

ZK Rollups

The main representatives are zkSync, StarkNet, Polygon zkEVM, and Scroll.

zkSync is the first zkEVM project to launch on the mainnet, leveraging zero-knowledge proofs and "optimistic" transfers to improve transaction efficiency.

StarkNet adopts the zkSTARK scaling solution, combined with sharding technology to improve throughput and transaction speed.

Polygon zkEVM achieves compatibility with EVM at the bytecode level, aiming to provide a faster and cheaper transaction experience.

Scroll is an EVM-compatible ZK Rollup that supports Ethereum's existing programming languages and smart contracts.

Future Outlook

In the short term, Optimistic Rollups may dominate the general EVM computation space, while ZK Rollups may excel in specific scenarios such as payments and transactions.

In the long run, with the advancement of ZK-SNARK technology, ZK Rollups are expected to become the ultimate solution for Ethereum scaling, dominating in various scenarios.