GameFi Public Chain Research ( Two ): Layer 2 and Optimistic Tracks

Introduction

The previous article introduced the development history and upgrade roadmap of Ethereum, leading to the two main branches of Layer2: Optimistic Rollup and ZK Rollup. If we compare Ethereum to a company, the Ethereum 2.0 upgrade is equivalent to reconstructing the internal management structure, transforming from a chain structure to a beacon chain-fragmented hierarchical structure. Layer2, on the other hand, is built on this foundation to outsource tasks, further lighten the company's burden, and improve efficiency and processing capacity.

This article will delve into Layer 2 solutions, focusing on the analysis of the Optimistic Rollup track.

Overview of Layer2 Solutions

Layer 2 refers to off-chain networks, systems, or technologies based on the underlying blockchain (Layer 1), used to expand the underlying blockchain network. Layer 2 can be classified in two ways: narrow and broad.

Narrow-sense Layer 2 needs to inherit Ethereum's security and bundle transactions on Ethereum. Layer 2 is only responsible for computation, with ZK and Optimistic rollup falling under this category.

The broad definition of Layer 2 includes all Ethereum scaling solutions, mainly consisting of 5 types:

1. Sidechain: An independent blockchain that operates in parallel with Ethereum, achieving "atomic swaps" by locking main chain assets to mint equivalent assets on the sidechain. It has weaker security but better independence and flexibility, with Polygon as a representative project.

2. State channels: Establish exclusive payment channels and multi-signature addresses between traders to complete off-chain transactions, only recording the results on-chain at settlement. Fast speed, low fees, represented by the Lightning Network and Raiden Network.

3. Rollups: Offload data execution work to Layer 2 and batch submit to the main chain. Divided into Optimistic Rollup and Zero-Knowledge Proof ZK Rollup.

4. Validium: Uses zero-knowledge proofs, but only uploads the state root and proof to the mainnet, while transaction data is stored on Layer 2. High throughput but sacrifices some security. Representative projects include ImmutableX.

5. Plasma: Lock main chain assets and trade on the side chain, with the side chain regularly updating the status to the main chain. Settlement is fast and fees are low.

This article will focus on analyzing the sidechain Polygon PoS, the Optimistic Rollups Arbitrum and Optimism, as well as opBNB and COMBO from the BNB ecosystem.

Polygon PoS Analysis

Introduction to Polygon

Polygon, originally named Matic, was initially a blockchain scaling platform, referred to as "the blockchain internet of Ethereum." It later evolved into "the network of networks," aiming to address the transaction speed and scalability issues of the Ethereum mainnet, with a primary focus on the blockchain gaming and NFT sectors. Polygon PoS is its foundational layer, while the ZK Rollup matrix represents a potential growth point.

technology

Polygon PoS is an EVM-compatible sidechain that was launched in June 2020. The architecture is divided into three layers:

1. Ethereum Layer: Composed of smart contracts, handling processes on Ethereum, leveraging Ethereum's security.

2. PoS Checkpoint Node Layer: Core Layer, producing and verifying Matic sidechain blocks, listening to Ethereum events and synchronizing information.

3. Matic sidechain layer: responsible for transactions, shuffling, and block production, regularly publishing checkpoints to the node layer.

The hybrid structure allows Polygon POS to support the Plasma framework, inheriting the security of Ethereum. The PoS Bridge further ensures chain security.

ecology

There are over 53,000 projects in the Polygon ecosystem, with rapid development in DeFi but insufficient innovation, ranking fifth in TVL. In terms of NFTs, it shares the high-end and low-end markets with Ethereum, attracting multiple international brands. In the gaming sector, the number of active projects is only second to BNB and Ethereum.

Summary of Advantages and Disadvantages

Advantages:

• Fast speed, low cost
• Inheriting Ethereum's security
• Fully EVM compatible
• Rich ecosystem

The overall timing for entering the market is good, the development strategy is appropriate, and it is expected to continue to consolidate its position in the top tier of public chains in the future.

Arbitrum Project Analysis

Introduction to Arbitrum

Arbitrum is the leader in Layer 2, with a TVL of $5.93 billion and a circulating market value of $1.45 billion. There are 150,000 daily active addresses and 620,000 transactions, closely following Polygon.

technology

Arbitrum uses Optimistic Rollup technology and introduces two roles: validators and aggregators. There is a 7-day challenge period before transactions are returned to Ethereum. Main products include:

1. Arbitrum One: The flagship platform based on Optimistic Rollup
2. Arbitrum Nova: Uses zk-Rollup technology for high throughput applications.
3. Arbitrum Orbit: Ecosystem Development Plan

ecology

There are 600 ecological projects, including GMX, Radiant, TreasureDAO, etc. Game projects such as Treasure DAO and Pirate Nation are growing rapidly.

Summary of Advantages and Disadvantages

Advantages:

• High performance, low cost
• Compatible with Ethereum
• Good security
• Rich ecosystem

Disadvantages:

• Withdrawal time is long
• There are issues with the incentives for network participants.
• Layer 1 may censor transactions

Optimism Project Analysis

Introduction to Optimism

Optimism is an Ethereum Layer 2 solution that moves transaction processing to the Optimism chain, recording only the results on Ethereum. It went live on the mainnet at the end of 2021 and has gained widespread adoption.

technology

Optimism adopts the OP Stack, a set of open-source software components that allow the construction of L2 blockchains on Ethereum. The OP Stack consists of four components:

1. Mainnet
2. Contract
3. Service
4. Tools

The architecture is divided into six layers: data availability layer, ordering layer, derivative layer, execution layer, settlement layer, and governance layer.

Eco

The DeFi ecosystem is well-developed, but there are relatively few GameFi projects. Op Craft is a highlight, innovating the concept of "on-chain self-governing world."

Summary of Advantages and Disadvantages

Advantages:

• Good EVM compatibility
• Data Security
• Fast speed, low cost

Disadvantages:

• Withdrawal times are long and costs are high
• There are issues with incentives for network participants.
• L1 may review transactions

Analysis of opBNB and COMBO Projects

opBNB

opBNB is a Layer 2 network based on the OP Stack on BSC, achieving high TPS, low gas fees, and security consistent with Layer 1. It can process over 4000 transfer transactions per second, with an average cost of less than $0.005.

COMBO

COMBO is a Layer 2 network focused on Web3 games, based on the BNB Chain. It uses Optimistic Rollup technology, achieving TPS of 5000, with gas fees as low as 0.001 Gwei. It provides a full-stack development toolkit, ComboUp, and other resources, with an ecosystem layout centered around games and the metaverse.

Summary

This article analyzes several major Layer 2 projects based on OP technology. Rollup is the mainstream solution for Layer 2, with significant improvements in performance and security, but there are still some issues to be resolved. Arbitrum and Optimism each have their own characteristics, and future competition will be more intense, promising to bring users better public chain products.