Technical Science Series| Why Do We Need Layer2
Is slowness a shortcoming of Ethereum? Slowness is not a shortcoming of Ethereum, it can only be regarded as one of its characteristics, especially for the current DEFI.
Due to the free nature of DEFI, we can foresee more financial innovations on Ethereum. Is the core factor of financial innovation speed? I’m afraid not. Too fast running speed will increase the difficulty of risk control. Only financial crooks need to be faster, so that they can run away as quickly as possible.
Many times, financial innovation takes time to accumulate. In this way, you can have more time to test its characteristics and cultivate the physical scenes it needs. Therefore, the slow running speed is more conducive to financial innovation.
So what is the biggest problem with Ethereum right now? The expensive usage cost. As the price of ETH has soared, GAS fees have also risen, making it difficult for ordinary users to afford it.
In the era when Ethereum was born, the yardstick for people to measure the value of tokens was the application scenario, which caused the correlation between the price of ETH and the GAS fee. At that time, people did not realize that for an ecological token, only its governance authority has extremely high value.
Now Ethereum is more representative of the DEFI ecology, and ETH represents the governance power of Ethereum, so ETH can have such a high price. This caused the gas fee to reach a record high, which is unfairly borne by the users.
Therefore, what Ethereum urgently needs to solve is the problem of excessively high GAS fees. And layer2 of ZKROLLUP can solve this problem well. It processes certain types of transactions off-chain in a compressed form( on Ethereum, all transactions are in the same format, which inevitably consumes more GAS). And using zero-knowledge proof technology, the execution of the transaction is also compressed
On the premise of ensuring the safety of user funds, the GAS savings have been realized through space (on-chain data) compression and time (execution process) compression. In this way, the GAS cost distributed to each transaction will naturally be reduced.