Staking Weekly #4 — Ethereum Scaling Ecosystem

Published in

ClayStack

2 min readApr 3, 2021

The fight for smart contracts network throne is heating up with serious contenders like BSC, but it’s not done yet for Ethereum.

“We will either solve the scalability and consensus problems or die trying” — Vitalik Buterin (2014)

With slow speed, Ethereum has been solving scalability issues. Today, the network supports immense activity and settles billions of dollars in transactions through hundreds of dApps built on the platform. This growing popularity has made the network congested and is a reason for high gas fees.

To counter this, some of the platforms are expanding to other chains (Sushi to Avalanche, 1Inch to BSC), others look at Ethereum scalability solutions to solve network congestion and high gas fees. (AAVE with Polygon and Uniswap with Optimism).

Theoretically, there are multiple solutions to scale the Ethereum network, but these can be categorized into:

Layer 2 — Scaling that is off-chain. All transactions take place outside of the Ethereum base chain). There are four main types of approaches with various projects implementing solutions.

State channels — Raiden Network, Connext, Celer
Sidechains — xDAI, Skale Network
Plasma — Polygon, OMG Network
Validium — Starkware
Rollups — Loopring, Optimism

2. Layer 1 — Scaling that is on-chain, or scaling solutions that keep all transactions on Ethereum

ETH 1.X sharding — ETH2.0

While we wait for ETH 2.0, it will be interesting to see how the ecosystem will evolve in the coming months as new users in large volumes get introduced to crypto.