RNDR Implements New Layer 2 Payment System

RNDR optimizes miner payments to handle high gas prices with Layer-2 Solution zkSync.

The cryptocurrency market has witnessed unprecedented growth in yield farming, on-chain lending, staking, pooling, DEXs and other DeFi applications over the past year. According to Cointelegraph, DeFi apps are responsible for an amazing 97% of all activity on the Ethereum blockchain, with Uniswap alone representing approximately 39% of Ethereum transactions.

Unfortunately, as Glassnode has noted:

“DeFi, with all its complex mechanics, is taking up a significant portion of gas on Ethereum [and] is responsible for a large portion of the unprecedented increase in gas prices that we are currently seeing.”

While we are excited about the promise of next generation Ethereum applications such as DeFi and NFTs, RNDR, built on the Ethereum blockchain, has not been immune to the effects of ultra-high gas fees and transactional volatility. For the last few months, RNDR miner payments have been halted as gas prices caused these processes to become prohibitively expensive.

The RNDR Response

RNDR has delivered a 25% payout bonus on miner payments that were paused during this period and we have developed a long-term technical solution to Ethereum scalability issues that has the potential to limit RNDR’s growth. RNDR is addressing this issue by immediately implementing a back-end optimization for payments vs. gas usage; miner payments have resumed and will be distributed twice weekly going forward (subject to change based on ETH gas prices).

However, with network congestion leading to technical issues such as unconfirmed transactions, and impeding the growth of the RNDR ecosystem, other options need to be considered. As Ethereum co-founder Vitalik Buterin recently tweeted:

“To those replying with ‘gas fees are too high’, my answer to that is ‘well then more people should be accepting payments directly through zkSync/loopring/OMG’. Seriously, scaling to 2500+ TPS for simple-payments applications is here, we just need to… use it.”

The RNDR team will be deploying zkSync, a trustless layer 2 protocol for scalable, low-cost payments on Ethereum.

zkSync, built using zkRollup technology by Matter Labs, launched in 2020 to allow users to send tokens without worrying about high transaction fees or network congestion. At its launch, zkSync could process more than 200 transactions per second, gradually scalable to up to 2,000 transactions per second. The scalability nature of this layer 2 implementation can potentially see zkSync match Visa’s processing speed. Beyond transactions that are finalized within minutes and confirmed instantly, of note is that transaction fees are payable using the ERC-20 token transferred (Ethereum’s transaction fees are only payable using ETH).

Growing Forward With RNDR

We expect optimized blockchain transactions and miner payments to improve on RNDR network adoption. The team will continue to explore other L2 payments that will help RNDR scale going forward and we will provide updates as we progress on this work.

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