Ethereum Layer 2 solutions are being deployed left, right and center. Since necessity is the mother of invention and gas fees on the base layer have gotten high, there is no surprise that the dev teams have sped up their schedules. However, they are still in the initial testing phase and still being tested / tweaked. It’s advisable to proceed with caution until they are mature enough to handle Layer 1 level loads. How to see the fees on them though? Meet L2 Fees.

Another brand child of Ethereum developer David Mihal - the creator of Crypto Fees (tracking protocol fees generation) and Money Movers (tracking the protocol value settlements), L2 Fees tracks the fees across the operational Ethereum Layer 2 solutions. It also classifies the cost of various basic transaction activities, namely the cost of sending Ethereum, cost of sending other tokens and the cost of completing a swap on the networks.

Each Ethereum Layer 2 solution has it's own strengths and drawbacks, including trust assumptions, degree of decentralization, emergency response, stage of maturity, tx speed, withdrawal time, so do your research before jumping on the bandwagon. Arbitrum and Optimism on the list have reduced speed / tx limit to test the system.

They are not operating at maximum capacity currently and the team will increase it gradually, once the protocols are tested further and more mature. Ethereum Layer 2 solution Aztec Protocol, on the other hand, ensures private transactions, so operations on the protocol are even higher than Ethereum.

The Ethereum Layer 2 scaling solutions are decentralized protocols that increase the processing capacity of the Ethereum blockchain (hence scaling) and as a result, relieve congestion on the network. They work by delegating the network processing “off-chain” to their own chain, processing it there, before settling the final balances on the base layer mainnet. It’s extremely necessary that big exchanges like Coinbase, Binance, etc. integrate them, so average users can benefit from increased throughput and more capacity on blockchains.

Polygon is moving past its Plasma solution. The leading Ethereum scaling solution announced on Aug 13 that it has acquired Hermez by allocating $250M in MATIC tokens. This acquisition will add to the Polygon full-stack Ethereum scaling strategy. This means that Polygon will employ multiple techniques to reduce tx confirmation times and tx fees. Hermez is an Ethereum Virtual Machine (EVM) compatible ZK-Rollup based decentralized solution and now the endeavor is called Polygon Hermez. 

Polygon Hermez offers a 90% reduction in fees, secure fast withdrawals, and 133x improvement in throughput, according to the official sources. This is the first-ever blockchain merge and acquisition in which two companies have completely dissolved into each other, combining their assets, team, and technology. As such, it speaks to the rapid maturity of blockchain technologies and the combined efforts to make crypto affordable for the masses.

The merger will see the Hermez token holders receive 3.5 MATIC for every single HEZ token that they hold. However, the token swap isn’t available yet. MATIC will be the primary token of the Polygon Hermez network. The Polygon team confirmed that they will be allocating $1B for the efforts to deploy zero-knowledge (ZKs) proof-based scaling technology research, acquisition, and further development.

Polygon’s highly successful yet controversial Plasma relying on Proof of Stake (POS) based on the fraud-proof solution is the most widely adopted and known scaling solution on the Ethereum blockchain. However, it has been criticized for its security model and certain centralized characteristics. The merger is likely to rectify the shortcomings of the stopgap Plasma solution.

MATIC is the native token of Polygon. It is an ERC-20 token operating on the Ethereum blockchain. Users will pay in MATIC tokens to settle the transaction fees on Polygon. MATIC tokens will set out every month. MATIC currently has a circulating supply of 5,188,388,130 MATIC coins and a max supply of 10,000,000,000 MATIC tokens. The outstanding MATIC tokens are as follows:

The Ethereum Layer 2 season is underway. Major scaling solutions will become live on the DeFi protocol. Currently, devs are trying to onboard them in a bid to scale the Ethereum blockchain and provide low-cost/fast processing tx. The latest to join the party is the liquidity aggregator 1inch. It is the leading decentralized exchange that integrates its services with the O? mainnet - the Optimism L2 solution.

Initially, the protocol limits to 0.6 tx per second, which will likely increase once the Optimism technology matures with further testing and optimization. How to start trading on 1inch Optimism? Well, visit the Optimism Gateway and start your L2 journey by connecting your wallet.

Then, start exchanging tokens on the Optimism L2. The full tutorial is already live and helps other users. The deposits are instant, but the withdrawals take a week to process, owing to the Optimism solution limitations. 1inch is the second major DEX to onboard the solution after Uniswap.

In the future versions of Optimism L2, scaling performance improvements will integrate alongside efforts to increase decentralization and wallets paying for gas in any token (not only ETH). 1inch is likely to benefit from that. Optimistic Ethereum is an EVM-compatible Optimistic Rollup solution. It's a developing solution and the team is treading carefully in uncharted waters to ensure maximum security and stability.

The Layer 2 scaling solutions are protocols that increase the processing capacity of a blockchain (hence scaling) and as a result, relieve congestion on the network. They work by delegating the network processing “off-chain” to their own chain, processing it there, before settling the final balances on the base layer mainnet.

The second-layer off-chain scalability solutions apply to subsidiary etiquette developed on top of the principal blockchain where transactions are ‘off-loaded’ from the principal blockchain to conserve area and decrease network bottleneck. Second-layer solutions are normally in the order of side-chains and state channels.