Why we are so excited about Layer2s on Ethereum

Every time new trends take hold on Ethereum – think DeFi, NFTs or gaming – they are inevitably cut short of their full potential by the limitation of 15 transactions per second on the world’s largest decentralized network. We start talking about the scaling solutions, optimising gas costs and increasing the transaction throughput… but then the trend dies down, gas prices go down and the sense of urgency disappears.

Layer 2 solutions are supposed to solve this issue. But every time we needed them, they seemed just out of reach.

Not this time.

Layer 2s are here to stay and they are taking the (blockchain) world by storm. We’re now seeing everything from NFTs, DeFi and even games being built on layer 2 infrastructure. Here’s my own take on why this will be the catalyst for mass adoption.

(If you want to know more about what different Layer 2 solutions are, check this + this.)

It needs to get worse, before it gets better.

When you take a step back, it’s clear that network congestion on Ethereum is a positive thing. It means we’re growing, onboarding new users, creating new wallets and new use cases adding value to our everyday life. Those of us who have lived through these growing pains will understand my point – I wouldn’t be so aggravated by that, if I hadn't paid $25 in gas fees for a 50$ NFT purchase.

The fact that, right now we have more than 20 Layer 2 solutions, is a great sign that the network is constantly growing stronger (despite every Ethereum-killer blockchain that has launched so far). Some of the brightest minds in crypto are working on the scalability issues and their solutions will lead to a tipping point where Ethereum will see mass adoption.

The beauty of application-specific rollups.

If you think about it, it’s crazy that when you do make just one transaction on Layer 1,you’re putting a global lock on the entire chain. It’s an overkill for any network. Layer 2 solutions have given us a chance to build application/domain specific solutions that cater to just one use case – and very often this is all we need. We don’t need full composability just yet. We need usability first.

Bridges and cross-layer protocols will simplify the process in time. But the solutions we have right now are capable of onboarding millions of new users daily to the fast, free - and painless blockchain. StarkX + Sorare or even Axie Infinity + Ronin are both great examples of scalability done right. Choose the solution that works for you, build on top of that. Make sure your users have a way in and a way out – then watch those stats fly.

Instant payments

As great as all that is, without a fast and reliable onramp, all the speed gained from L2 is lost due to the need to bridge assets from mainnet to L2. Fiat onramps represent the last piece of the puzzle that is required to recreate a fast and seamless web experience that users have come to expect today. With Ramp Network you can go straight from fiat to Layer 2. No stops along the way.

If this gets you excited, the pipeline will be a dream come true to you. Over the next few months we will provide universal, global on-ramping coverage to other major L2 solutions. Stay tuned!