How To Identify A Good Layer 2 Blockchain Development Company?
There is no denying that Ethereum is one of the most widely used blockchain networks today. As of May 2020, there were 2855 decentralized applications available on Ethereum, with many more under development. Furthermore, Ethereum’s potential for increasing the Decentralized Finance (Defi) field suggests that the Ethereum network might see a tremendous increase in the number of apps and users in the coming days.
The ever-increasing number of users on the Ethereum network has resulted in some network constraints. The finest Ethereum layer 2 solutions enter the scene at this point. In this blog by ChainTechSource, a leading layer 2 blockchain development company, we will explore what layer solutions on Ethereum are, how to find the best layer 2 blockchain development company and the specifics of the best layer blockchain development.
What is the Need for Layer 2 Blockchain Development Process?
The increased load on the Ethereum network is due to the growing number of apps and users. Since the Ethereum network’s capacity is restricted, the cost of accessing the network rises dramatically as more users compete for the right to add transactions to the Ethereum network.
As a result, Ethereum layer 2 scaling solutions are important tools for tackling network performance issues. Many scalability options for Ethereum are being researched, tested, and implemented, with various methodologies for achieving scalability.
The Ethereum network’s major scalability goals are to increase transaction speed while also increasing transaction throughputs. At the same time, scaling solutions should not jeopardize the Ethereum network’s security or decentralization.
On the layer 1 blockchain, Ethereum also faces issues about excessive gas fees and slower transactions. For now, Ethereum has two unique alternatives for solving scalability, excessive transaction fees, and transaction settlement delays in the form of sharding and layer 2 blockchain development solutions.
What is Layer 2 Blockchain Development Solution?
Layer 2 blockchain development solutions give away a lot about themselves just by their name. Layer 2 is a separate network that runs on top of Ethereum’s main network, or layer 1. In the form of smart contracts, Ethereum layer 2 protocol development solutions remain on the Ethereum network.
Layer 2 protocol development solutions do not require any changes to the base level protocol in order to communicate with the main network. Layer 2 scaling solutions for Ethereum could be used for a variety of purposes, including off-chain computing and payment scalability.
Difference Between Layer 1 and Layer 2 Blockchain Development Services
The underlying primary blockchain architecture is described as Layer-1. On the other hand, Layer-2 is an overlaying network that sits on top of the blockchain. Take, for example, Bitcoin and the Lightning Network. The bitcoin network is a layer-1 network, whereas the lightning network is a layer-2 network.
Also, layer 1 Ethereum solutions are limited in their functions and scalability since they do not handle the load very well. Whereas, layer 2 blockchain development solutions are designed and built to perform the tasks that layer 1 solutions fail to do. Now that we’ve established the fundamental distinction, let’s look at how to choose the best layer-2 blockchain development company.
How to Choose a Good Layer 2 Blockchain Development Company?
- State Channels:
First and foremost a good layer 2 blockchain development company must have in-depth knowledge about State Channels. A state channel is a two-way communication channel between participants that allows them to undertake off-chain interactions that would normally occur on the blockchain. This reduces the amount of time you have to wait because you are no longer reliant on a third party, such as a miner.
- Nested Blockchains:
OmiseGO, an Ethereum-based dApp, is currently working on a nested blockchains solution called Plasma and it is important for a good layer 2 blockchain development company to know about it.
On top of the main chain, there will be numerous tiers of blockchains. A parent-child chain link will be formed by connecting these levels. Work is delegated by the parent chain to its subsidiary chains. The child chains then carry out these actions and report back to the parent chain with the results.
- Consensus Protocol Changes:
Many projects, such as Ethereum, are switching from slower and less wasteful Proof-of-Work (PoW) consensus methods to quicker and less wasteful Proof-of-Stake protocols (PoS). Both Bitcoin and Ethereum use PoW, in which miners use their computing power to solve cryptographically difficult equations.
While PoW is fairly secure, it is a bit slow. On a good day, Bitcoin can only handle 7 transactions per second, whereas Ethereum can only handle 15–20. This is why Ethereum is considering switching from PoW to PoS.
Sharding is a common layer-1 scalability solution that is currently being worked on by a number of projects, and every layer 2 blockchain development company must know it. Instead of forcing a network to work on each and every transaction in a sequential manner, sharding divides large transaction sets into smaller data sets known as “shards.” The network can then handle these shards in parallel.
- Polygon Integration:
Polygon is a multi-chained system, a framework, and a protocol all in one. It connects Ethereum-compatible blockchain networks and was created to address the present Ethereum network’s scalability difficulties. It’s a layer 2 solution, which means it’s built on top of Ethereum’s main blockchain. For this reason, every good layer 2 blockchain development company must know and be ready to integrate Polygon into the system
The finest Ethereum layer 2 solutions have emerged as the Ethereum network’s answers to scalability and excessive transaction costs. In reality, scalability is a promising prerequisite for securing a blockchain network’s widespread adoption. Furthermore, decreased transaction fees may encourage more people to use the Ethereum network. ChainTechSource is one such proficient layer 2 blockchain development company that has already integrated Polygon. If you are looking for layer 2 chain development company, then visit, https://chaintechsource.com/