Popular Science | 7 Things You Can Do Right Now on Layer-2

But because of peculiarities in Ethereum’s design, the growing network can be expensive and slow to use when demand is high — after all, there’s only so much block space available per unit of time.

Although it is possible that the Ethereum blockchain will significantly increase the transaction throughput of the base layer through “Eth2”, the better news is that we don’t have to wait for Eth2 to achieve throughput expansion.

The solution that is immediately available is the Layer-2 (L2) scalable solution.

The basic idea of ​​the Layer-2 solution is to build on Ethereum and directly rely on the security and finality of Ethereum, but transfer the transaction processing needs on the main chain to the off-chain, so as to achieve near-instant transaction processing speed and appropriate transaction costs - the functional scope is the same as the underlying Ethereum, and transfers, transactions, and staking tokens can all be achieved.

L2 is not a fantasy that remains on paper. Many L2 solutions have been launched, and new L2 solutions and integration solutions seem to be popping up every day. At the time of writing this article, there is about $300 million in value protected by L2 projects; the technical models adopted by these projects can be divided into two categories: ZK Rollup and Optimistic Rollup.

The era of L2 extension solutions has arrived, and this is just the beginning. If you want to be a part of the trend, now is a great time to try and evaluate various L2 solutions. So, what are the best L2 services available today?

We have listed 7 great L2 services here, check them out!

1. Lending/Loans on Polygon using AAVE

Earlier this year, Matic — a project built around the Matic Plasma chain and Matic PoS sidechains — rebranded to Polygon, with a mission to “make Ethereum the Internet of Blockchains.”

The implication of this rebranding is that the team will begin to embrace optiimistic rollup, zk rollup, and so on.

Soon after, the popular DeFi lending protocol Aave announced the New Frontiers plan to test multiple scalability solutions and give users choices. Aave’s first public integration activity was to connect to Polygon’s PoS sidechain.

It is worth reminding that the sidechain does not directly inherit the security protection of Ethereum like most L2 solutions, but it provides the same throughput improvement as L2. And judging from the New Frontier activity, it is very likely that Aave and Polygon will collaborate with each other in promoting rollup integration.

In the meantime, you can process your Aave lending/borrowing funds more cheaply on the Polygon sidechain. You first need to add the Polygon network to your MetaMask plugin wallet, then click on the “Polygon” tab on the Aave website, and you can see what the market is like.

2. Trading decentralized perpetual contracts

dYdX is a decentralized exchange known for providing decentralized margin trading, spot trading, and perpetual contracts on Ethereum.

Traders certainly want transactions to be as fast as possible and as cheap as possible. dYdX has just announced the launch of the L2 perpetual contract trading system, with StarkWare's StarkEx scalable engine as the core.

StarkEx is both powerful and flexible, supporting both on-chain data availability (i.e. zk rollup) and off-chain data availability models (i.e. Validium), which is impressive. Regardless of which camp you want to classify it as, it will definitely take dYdX’s perpetual contract trading to the next level. dYdX’s L2 already includes perpetual contract trading pairs:

• ETH-USD

• BTC-USD

• LINK-USD

• UNI-USD

• AAVE-USD

If derivatives are more your thing, you can check out the dYdX Perpetuals dashboard where you can deposit funds directly into the L2 system and start trading right away!

3. Earn SNX staking rewards

Synthetix is ​​also the leader in derivatives projects in the DeFi world. As long as an asset exists, whether it exists on a blockchain or in the real world, it can theoretically be traded on Synthetix in the form of on-chain synthetic assets.

The core of this powerful protocol is staking, where you deposit Synthetix's native token SNX into a pool of funds controlled by the protocol contract as collateral. Providing such a service can be rewarded: SNX stakers can receive additional SNX rewards and dividends from users' transaction fees on the Synthetix exchange. This is the core incentive mechanism behind staking SNX.

The fun thing is that you can now stake SNX on L2! Starting in early 2021, SNX staking services began running on the Optimistic Ethereum L2 developed by the Optimism team. As the name suggests, this is an optimistic rollup solution.

If you are interested in this novel staking method, you can use Synthetix's staking dashboard to deposit SNX and migrate your stake from L1 to L2. However, both Synthetix and Optimistic Ethereum are still very immature - the function of trading synthetic assets and other core functions have not yet been integrated.

In addition, it takes about 7 days to withdraw money from Optimism. In other words, don't deposit money that you might need urgently!

Although it’s still early days, there are rewards for participating in the development of the western region.

4. Liquidity Mining LRC Rewards

Since the phenomenon of yield farming emerged last summer, the craze has never been over. Simply put, you provide liquidity, thereby helping fledgling projects grow, so you can get token rewards from the project (the so-called "yield").

However, if the blockchain is congested, the cost of liquidity mining on Ethereum will be very high. All authorization, deposit, pledge and withdrawal transactions will cause the cost to rise!

But liquidity mining doesn’t have to be so painful. A notable example is Loopring’s L2 liquidity mining. Loopring is an exchange and payment protocol powered by zk rollup technology. The developers of this project also created the Loopring exchange, which provides users with automated market maker (AMM) exchange services on L2.

Because the prosperity of AMM exchanges depends on liquidity, Loopring is conducting liquidity mining activities to attract liquidity. As long as users provide liquidity to Loopring, they can receive the project's native token LRC as a reward.

If you are very optimistic about the prospects of L2 scalability solutions and believe that Loopring will make great achievements in it, LRC liquidity mining is worth considering. You can start from the Loopring website, deposit your assets into their L2, and then deposit them into your favorite pool!

5. Trade DeFi tokens on DeversiFi

Also based on StarkWare’s StarkEx scalability layer, DeversiFi is an efficient, one-stop decentralized exchange whose features include limit orders, OTC trading, and free transfers.

These features naturally make them ideal for trading popular DeFi tokens such as UNI, MKR, and AAVE.

Of course, the Loopring AMM mentioned above can also be used to trade DeFi tokens. This is not DeversiFi’s secret recipe.

Advanced traders may prefer DeversiFi as it offers more features (compared to standard AMM exchanges), so if you are looking for a trading-centric L2 application, don’t miss DeversiFi.

6. Donate to projects listed on Gitcoin

We know that many projects around Ethereum and the DeFi world are built on the model of open source software. This is why everyone has recently paid attention to Gitcoin, a platform that helps open source software developers around Ethereum, DeFi, etc. to earn income.

Gitcoin is most famous for its Gitcoin Grant, which means that projects can raise funds through crowdfunding, and there are two channels: targeted donations and quadratic funding. Although projects can receive donations at any time on Gitcoin, what’s even better is that the Gitcion platform has now integrated support for zkSync, and users can donate through L2 anytime, anywhere, and save gas fees.

The whole process is very simple. Add the item to your shopping cart, go to the payment page, and select the "Pay with zkSync" option. You will then be directed to a web page that will help you deposit funds into L2. You save a lot of gas fees and support the Ethereum ecosystem at the same time, the best of both worlds.

7. Use Superfluid to pay

Superfluid is a stream money protocol. It allows users to create payment streams and pay funds in real time. The protocol uses two different scaling solutions - xDAI and Polygon - so users can choose.

If you’ve ever imagined a DAO that could handle multiple revenue streams and use a portion of it to reward contributions, or an NFT that represented music copyrights and paid out revenue to its holders in real time, Superfluid is built for that.

The cool thing is that in Superfluid, flows are not locked and can still be freely transferred between accounts. You can split and merge your income streams as you please - if you are receiving a token, you can forward it to any account you specify, and the same goes for the recipient. This is essentially an interconnected network of wallets that interact in real time!

in conclusion

The golden age of L2 has just begun. As the top L2 solutions continue to innovate, iterate, and deliver powerful, usable products at a rapid pace, the entire ecosystem will develop further.

The zkSync team has just announced the launch of zkPorter, an unprecedented scalable system that has a good chance of becoming the primary scaling architecture for the Ethereum ecosystem in the next few years.

Some well-known applications, such as Uniswap, are also about to launch their L2 integration solutions.

In addition, there are some solutions dedicated to ease of use, such as Connext's Vector, which can serve as a hub to connect Ethereum and all L2s, and the shadow of scalability will soon become a thing of the past.

Ethereum is scaling. It has already been scaling.