Ethereum is one of the most popular blockchain networks in use, and there are no doubts regarding this fact. The total number of decentralized applications on Ethereum as of May 2021 was more than 3855, with many more applications under development.

The increasing number of applications and users on Ethereum is responsible for increasing the load on the network. The capacity of the Ethereum network is limited. Therefore, the cost of using the network increases prominently with more and more users competing with each other for adding transactions to the Ethereum network.

Ethereum layer 2 scaling solutions are considered vital instruments for addressing the problems with network performance. Many solutions for Ethereum scaling are undergoing research, testing, and implementation with different approaches for achieving scalability.

So how would you know if you can achieve true scalability with Ethereum scaling solutions?

The primary objectives of scalability for the Ethereum network refer to improvement in transaction speed alongside transaction throughputs. At the same time, the scaling solutions should not compromise the security or decentralization of the Ethereum network. Ethereum also experiences the concerns of unreasonable gas prices and slower transactions on the layer 1 blockchain. As of now, Ethereum has two distinct options in the form of sharding and layer 2 solutions for addressing the problems of scalability, high transaction fees, and delays in transaction settlement.

Below are some projects that are based on Ethereum layer 2 solutions that have been successful in resolving many critical issues.

Polygon

Polygon is slowly becoming one of the most popular Ethereum layer 2 solutions with the delay in Ethereum’s transition to ETH 2.0. Polygon has also collaborated with many significantly popular partners such as Umbrella Network, Kambria Open Innovation, Graphlink, and Mogul Productions, alongside many other prominent names.

Arbitrum

Arbitrum is another notable entry among the popular Ethereum layer 2 scaling solutions for all the right reasons. Off-chain Labs have developed Arbitrum with features for close interoperability with Ethereum, thereby enabling Solidity developers for easier cross-compilation of their smart contracts. The three primary components of Arbitrum include validators, compiler, and the EthBridge.

xDAI Chain

xDAI Chain is basically a sidechain based on Ethereum, which supports users in processing transactions at faster speeds and reduced costs. xDAI Chain utilizes a Proof-of-Stake (PoS) consensus mechanism for helping users to place native xDAI tokens as stakes on the network for becoming validators. Most important of all, xDAI is a stablecoin.

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