Rollups arrive on Ethereum for faster and cheaper transactions
Network congestion on Ethereum (ETH) is commonplace by now. A lot of investors, developers, and Dapps users meet there every day. But, technically, this blockchain isn’t yet in its final form; “fully” ready to accept thousands of worldwide users. However, now it’s closer than ever. The developer team Matter Labs has launched their alpha version of the so-called “rollups” on an Ethereum testnet, to make it faster and cheaper.
To be more precise, according to a previous report, the rollups zkSync 2.0 can boost the network to 20,000+ transactions per second (TPS). That’s almost the Visa speed, which is calculated in 24,000+ TPS. All this, against the current speed: barely 15 TPS, and that’s not all. As they indicated in the recent announcement, once the rollups are combined with the improvements planned for Ethereum 2.0 by 2022, the speed will reach over 100,000 TPS.
“The current consensus is Eth2 data sharding will arrive by the end of 2022 to provide an exponentially larger data availability layer without sacrificing decentralization. zkSync’s zkRollup technology combined with Eth2 data sharding is the endgame, hitting 100,000+ TPS without sacrifices.”
Mostly as it sounds, the rollups in blockchain are a system in which numerous transactions join to create only one. This one is executed outside layer 1 (the mainnet) to avoid congestion, delays, and high fees. The post-transaction data is managed on the mainnet, securing the network.
Like Ethereum Foundation describes: “Inheriting the security properties of layer 1 while performing execution outside of layer 1, is a defining characteristic of rollups”. For now, Matter Labs is testing this feature on Rinkeby (a testnet). It’ll arrive at the mainnet around August 2021.
Rollups and “Ethereum beats BTC as a store of value”
This is, at the least, one of the sections in the last research report by the investment bank JP Morgan. They pointed out that most Dapps, stablecoins, DeFi projects, and NFTs are Ethereum-based. That’s why the ETH price can be very high in the foreseeable future, and even surpass Bitcoin (BTC) as a store of value.
“The greater number of transactions in ether versus bitcoin reflects this dominance. As cryptocurrency use in DeFi and NFTs becomes more widespread, ether will build its own first-mover advantage in applied crypto technology. Ethereum can also be used to store almost any information securely and privately on a decentralized ledger. And this information can be tokenized and traded. This means that the Ethereum platform has the potential to become a large market for trusted information.”
Of course, this only will be possible when Ethereum is ready to accept a really massive amount of users (including rollups and all). For now, we’re waiting for the rollups, the London update (to reduce the gas fees) around July, and the improvements planned for Ethereum 2.0. That’s including the change from the system Proof-of-Work (PoW), very criticized by environmentalists, to the Proof-of-Stake (PoS).
Featured Image by Gerd Altmann / Pixabay
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Originally published at https://blog.alfa.cash on June 3, 2021.