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Getting started#

Objectives#

At the end of this guide, you should be able to:

  • Explain what a layer 2 blockchain is.
  • Learn more about ERC-20 tokens and use cases.
  • Explain the rationale behind the utilization of Solidity for crafting smart contracts.
  • Provide a summary of the historical development and the rate of evolution of Solidity, highlighting its strengths and weaknesses.
  • Deploy an ERC-20 token using Remix.

Introduction to layer 2 blockchains#

Scalability has been a persistent challenge within layer 1 blockchains, hindering their ability to handle a growing volume of transactions efficiently. As blockchain networks like Ethereum and Bitcoin face limitations in transaction throughput and confirmation times, the need for scaling solutions becomes paramount. Layer 2 blockchains emerge as scaling solutions to address these scalability issues.

Layer 2 solutions are designed to augment the capabilities of layer 1 blockchains by moving some of the transaction processing off-chain. This enables faster and more cost-effective transactions without compromising the security and decentralization inherent to Layer 1.

Three prominent layer 2 solutions are Optimistic Rollups and ZK-rollups, and Validiums, each offering unique approaches to enhance scalability.

  • Optimistic Rollups: This approach relies on an optimistic execution of smart contracts, allowing transactions to occur off-chain and later be reconciled on the main blockchain. By assuming most transactions are valid, Optimistic Rollups significantly reduce the computational load and improve overall transaction throughput.

  • ZK-Rollups (Zero-Knowledge Rollups): Employing advanced cryptographic techniques, ZK-rollups ensure the validity of transactions without revealing the specific details. This not only enhances privacy but also provides a scalable solution by compressing transaction data, reducing the burden on Layer 1.

  • Validiums are scaling solutions that use off-chain data availability and computation designed to improve throughput by processing transactions off the Ethereum mainnet. Like ZK-Rollups (Zero-Knowledge Rollups), validiums publish zero-knowledge proofs to verify off-chain transactions on Ethereum. This prevents invalid state transitions and enhances the security guarantees of a validium chain. Validium distinguishes itself by placing a strong emphasis on privacy and confidentiality, making it a compelling solution for various decentralized applications. An example of such a layer 2 blockchain is X Layer.

Learn more about X Layer here.

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