The State of Layer-2 Protocol Development #3

The third in a series of progress reports on all things scaling and Layer-2 on Ethereum. Read Progress Report #2 here.

John Adler

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ConsenSys Media

5 min readJul 24, 2019

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by John Adler.

Welcome to the third post in a series about Layer-2 scaling solutions being designed and built on top of Ethereum! The first post in the series features an introduction and overview of Plasma and State, while the second post addresses updates to the mostly implementation-focused work that the many teams involved are executing. This post will bring you up to speed yet again on the latest developments for both Plasma and State channels, with a few more interesting research updates this time around.

Scaling Ethereum Conference

June 5th–7th marked the days of the first Scaling Ethereum workshop, hosted in Toronto, Canada. It was focused entirely on Ethereum scaling efforts, at both layer-1 and layer-2, along with decentralized oracles and security analyses. It featured a number of talks over the three days and covered many associated research papers, each of independent interest. If you were looking for the best in bleeding-edge crypto research, look no further!

The State of Plasma

Plasma Group has come out with a new design for optimistic exits that borrows inspiration from rollups (for both validity proofs and fraud proofs). The essence of this technique is to perform exits and checkpoints for the Plasma Chain optimistically, with minimal data posted on-chain, and only post necessary data in a stateless manner as calldata as needed, similarly to rollups. This can support several hundreds of exits per second with the current Ethereum chain’s capabilities, and is still under active research to formalize the limits and applicability of this technique.

To coordinate Plasma research, plasma.build, has been launched as a Plasma-exclusive center of research, complementary to the well-know ethresear.ch research forum. In addition to a bunch of interesting topics and improvements surrounding Plasma predicates, there has been a strong push for standardizing Plasma variants and APIs, along with documenting progress and changes with a new “PLIP” format. In tandem with the launch of this forum, the Plasma implementers calls have resumed in earnest.

LeapDAO’s Plasma Leap testnet suffered a complete shutdown in June due to two physical validator machines with the same key signing two conflicting block thanks to network issues. Lesson learned: if you’re a validator, don’t use hot backups (yes, this applies to Eth 2.0 as well)!

Cryptoeconmoics Lab’s Plasma Chamber and predicate research was presented at Scaling Ethereum as an alternative implementation of Plasma Group’s Plasma Cashflow with interesting experimental features, including batched cryptoeconomics checkpointing and predicate support. Additionally, their blog has many Plasma explainers translated for a Japanese audience.

Georgios Konstantopoulos, an independent researcher, let out a spicy tweetstorm earlier this month on the distinction between side chains and Plasma chains. TL;DR: unqualified side chains are not Layer-2 because they do not have the same security and trustlessness guarantees as the main chain. They can be considered separate blockchains, and as such are not a scaling solution. Plasma and channels, through their exit games, have these guarantees and thus are proper Layer-2 solutions.

OmiseGO’s Plasma MoreVP implementation has been chugging along, with several development updates to make it ready for public use, but otherwise has mostly stalled on the research side. This is mostly due to the use of the fundamentally broken Plasma M[ore]VP design, which suffers from the unsolved mass exit problem, rather than a coin-based Plasma Cash variant.

The State of Channels

Counterfactual has published several development updates featuring the team’s immense effort at bringing its generalized state channel architecture to production-ready levels. This includes a number of API endpoints, wallet integrations, and token integration, along with standardization, interoperability, and documentation improvements across the board.

Connext is moving towards launching its v2.0 network, building upon the Counterfactual framework. This will feature improved distribution of nodes and cleaner wallet support. By leveraging the power of counterfactual state channels, on-chain multisig wallets will be able to act as channels almost seamlessly.

Raiden Network has mostly flown under the radar while making significant progress since the days of micro-Raiden being used to control a toy car at Devcon3. Check out their site for network stats!

Patrick McCorry published last week a scheme for a DataRegistry contract that will allow PISA watchtowers to be fully accountable for the channels they watch, with hard evidence on-chain. Unlike previous watchtower designs, if a PISA watchtower misbehaves and doesn’t fulfill its duties, it can be punished by proving this misbehavior.

SpankChain’s spank.live cam site now accepts fiat payments, and SpankPay has begun being used. For further updates and a good time, check out their blog and services!

Concluding Remarks

Over the past two months, lots of interesting research has popped up on the Plasma front, while channel implementers have been hard at working getting their solutions ready for production deployment. Stay tuned for the next installment of this (approximately) bi-monthly series for the latest updates on layer-2!

Disclaimer: The views expressed by the author above do not necessarily represent the views of Consensys AG. ConsenSys is a decentralized community with ConsenSys Media being a platform for members to freely express their diverse ideas and perspectives. To learn more about ConsenSys and Ethereum, please visit our website.