Investment firms have plenty of funding to boost the growth and scalability of blockchain technology. The report compares and discusses the ups and downs in Polygon layer-2 and sidechain comparison.
The Block Research was commissioned by Polygon to create “Layer-2 Scaling Solutions: A Framework for Comparison”.
Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.
All-time high levels of engagement are pushing Ethereum to its scaling limit. High transaction fees clearly showcase its scalability challenges. Individual transactions that used to cost in the cents now routinely cost tens or hundreds of dollars. Users paid ~$10 billion in aggregate transaction fees on the Ethereum network in 2021.
General-purpose scaling technologies are needed – badly. Alternative layer-1 platforms, sidechains, and layer-2 networks are all taking different approaches to increase blockchain scalability with different tradeoffs. This report focuses on layer-2 rollups which aim to bring scaling gains while inheriting Ethereum’s base layer security to the maximum extent.