What is the most promising way for the blockchain industry to scale smart contracts and move forward with the least amount of trade-offs, from a pure decentralization perspective?
To help you answer this for yourself, I’ll walk you through an elemental understanding of the different kinds of Layer 1 (L1) and Layer 2 (L2) architectures that are available, and give you some basic awareness of recent advancements in scalability tech which will become available very soon on Syscoin NEVM. In the end, I will share my own conclusions.
To begin, we’ll overview the three main types of blockchain architecture. Then we’ll explain the basics of two kinds of rollups, Optimistic & Zero-Knowledge, how they differ, and then get into some important details about ZK-Rollups in particular.
By the end, you should have the basic understanding needed to develop a proper a smart contract scaling solution.
Each of these primary design paths handle computation/execution and data-availability differently; see Table 1 (near the bottom of the article) for architecture comparisons of top smart contract platforms..
Monolithic chains rely on L1 (Layer 1) handling all execution and data storage. L1 alone is used to prove to network participants that the blockchain is valid at any point in time. In Monolithic chains, data is required in order to execute each transaction because the chain arrives at the correct conclusion based on consensus policies coded into the blockchain as well as the smart contracts. Examples include every current smart-chain alternative to Ethereum; (eg. Binance Smart Chain, Avalanche, Solana, etc.)
Modular chains rely on “rollups”, and are designed as systems of systems. Computation is moved off-chain. Flexible mechanisms handle the data required to prove the validity of the blockchain and/or rollups. Sequencers supply state updates to the main-chain and these updates are based on off-chain com...