Solutions To The Ethereum Scalability Problem


The world of cryptocurrency has exploded over the past year. The concept of a decentralized currency and payment system has grown in popularity as more people have begun to see the value in altcoins and smart contract platforms like Ethereum.

The advent of Ethereum, however, has brought with it another growing problem: scalability. While Ethereum is an innovative platform, many of its processes do not scale well to large-scale transactions, especially when those transactions are cross-network transactions. Layer 2 solutions are the answer to this problem.


What Does Layer 2 Solutions Mean?

Ethereum is the second-most popular blockchain network in the world, and it’s being used by people all over the globe. The Ethereum network has a unique feature that differentiates it from other blockchains: smart contracts.

This is far lower than the tens of thousands of transactions that banks and other large financial institutions can handle. The bottleneck is in the software and the infrastructure that Ethereum runs on. If the network could be scaled up, it would be possible to run a much larger number of decentralized applications. The EVM could be enhanced with features that make it easier to scale. Smart contracts could be coded to run on a number of different EVMs on the network, which would make scaling much easier.

This will allow for faster confirmation times, lower fees, and more flexibility when handling complex business logic. Layer 2 protocols are critical to the future of scalability because they enable the creation of more flexible, adaptable networks. They also allow for the implementation of more advanced protocols that are not possible with a single, centralized network such as Ethereum. Layer 2 is a key component of the Ethereum scaling roadmap because it will enable more advanced functionality to be implemented on the network.

Ethereum has several servers called chains. There are lots of chains and they’re all using the same currency (Ether). One of these chains is KCS USDT, which is an ERC-20 token pegged to USD. Which means that KCS price is dependent on the movement of USD. The value comes from an auditable smart contract which holds a dollar for every token issued (1:1).


How Does It Work?

Ethereum Layer 2 solutions are set to revolutionize the Ethereum network by providing an efficient, trustless method of transacting. With the combination of state channels, Truebit, and Plasma, Ethereum will be able to scale to an extremely high level without having to modify the base layer protocol.

The EEA was created to make it easier for ethreum focused projects to launch their own L2s. It is a smart contract platform that provides the technical framework needed to launch decentralized applications on the Ethereum blockchain. The EEA was launched in August of 2018. It is intended to help developers launch more efficient and decentralized blockchain-based applications by formalizing a common framework. Projects that want to launch their own EEA-compatible blockchain can do so by following the steps outlined in the EEA white paper.

The main benefit of using an L2 is that it allows dApps to be developed in languages other than Solidity. Since Solidity is a language that was specifically built for Ethereum and its use of smart contracts, it can be overwhelming for developers who aren’t well-versed in programming. By allowing developers to build dApps on top of an L2, the development process becomes easier and the pool of potential dApp developers increases drastically.

What Are The Layer 2 Solutions?


Plasma Blockchain

Plasma is a solution to the problem of validating a large amount of data on a blockchain network. Plasma was first proposed by Joseph Poon and Vitalik Buterin in August 2017, and the team has been working on the project since then. The goal of plasma is to reduce the amount of data that needs to be validated by every full node in the network, which will make the network faster and more scalable.

This is achieved by creating child blockchains which contain only certain parts of the main Ethereum blockchain. This makes it easier for nodes to sync with the blockchain but still allows them to verify the data in it. Nodes can verify transactions within these child blockchains without verifying all previous transactions in the main blockchain.


State Channels

State channels are a way for two parties to interact with each other without publishing every single transaction to the entire blockchain. For example, if two people want to bet on whether or not it will rain tomorrow, they can open up a state channel. In this channel, each person puts $1 into an account which is controlled by an Ethereum smart contract. If one person correctly predicts the weather, they take both dollars and the state channel is closed. If neither person correctly predicts the weather, then the state channel is also closed and both parties get their dollar back.

The contract then holds onto these funds until one of the two people decides that they want their money back; at that point, the contract sends them their money minus whatever penalties were agreed on for losing the bet. This means that neither person needs to pay gas every time they want to make a bet, which reduces overhead costs and makes it more convenient to use (since you don’t have to initiate a separate transaction for every bet).



A sidechain is an extension of the Ethereum blockchain that is fully compatible with its main chain, allowing users to transfer their existing ethers over. The main chain remains unaffected while using the sidechain, and there are some very interesting benefits to this system.

Sidechains offer a way for developers to create alternative blockchains without disrupting the main network. This innovation allows applications to be built on Ethereum with much more freedom than they have now, as they will no longer be at risk of causing bugs or crashes when interacting with the main chain.

This also has huge potential for scaling Ethereum up as new applications are developed and added to the network—if each has its own sidechain, this keeps them from bogging down or cluttering up the main Ethereum blockchain.