Layer 2 are solutions that allow you to increase the number of transactions on the Ethereum blockchain without sacrificing security or decentralization. There are different types of layer 2, such as sidechains, rollups, or state channels.
Ethereum's March 13, 2024 update, called EIP-1559, aims to improve the gas pricing mechanism on the blockchain. Gas is the cost necessary to make a transaction or execute a smart contract on Ethereum. Currently, users must bid for gas, which creates volatility and uncertainty. With EIP-1559, gas will have a fixed base price, which will be adjusted based on demand, and some of the gas will be burned, reducing the supply of Ether.
EIP-1559 could impact some Ethereum-based layer 2s, particularly those that use rollups. Rollups are solutions that consolidate multiple off-chain transactions and submit them to the main blockchain in a compressed form. There are two types of rollups: optimistic rollups and zero-knowledge rollups (or zk-rollups). Optimistic rollups trust validators to submit valid transactions, but allow users to dispute fraudulent transactions. zk-rollups use cryptographic proofs to guarantee the validity of transactions without needing to verify them on the main blockchain.
Optimistic rollups, like Arbitrum or Optimism, could be affected by EIP-1559 because they rely on gas to secure their transactions. This is because users must pay a gas bond to dispute fraudulent transactions, and validators must pay a gas penalty if they are caught in the act. If the price of gas rises or becomes unpredictable, it could discourage users from disputing transactions or encourage validators to cheat. Additionally, optimistic rollups need a withdrawal delay, which is the time it takes for transactions to be confirmed on the main blockchain. This period could be extended if the network is congested or if the price of gas is too high.
zk-rollups, like zkSync or Loopring, might be less affected by EIP-1559 because they do not need collateral or gas penalties to secure their transactions. They use cryptographic proofs that are verified off-chain, reducing the cost and time of confirming transactions. zk-rollups also do not need a withdrawal delay, as transactions are immediately finalized on the main blockchain.
Sidechains, like Polygon or Binance Smart Chain, might also be less affected by EIP-1559 because they are independent blockchains that use their own consensus and gas pricing mechanism. Sidechains are connected to the main blockchain through bridges, which enable the transfer of assets between the two networks. Sidechains offer scalability and lower fees than the main blockchain, but they sacrifice some security and decentralization because they have fewer nodes and validators.
In conclusion, Ethereum-based layer 2s that could be threatened by the March 13, 2024 update are mainly optimistic rollups, which rely on gas to ensure the security and finality of their transactions. Zero-knowledge rollups and sidechains might be less affected, as they have different mechanisms to ensure the validity and scalability of their transactions.
