• Layer-two scaling solutions appear to be increasing Ethereum’s scalability before the launch of ETH 2.0.
  • Starkware’s ZK Rollup solution can theoretically scale Ethereum for over 50 million users while charging a low fee.
  • Despite claims of over 10,000 TPS, ETH co-founder estimates that real throughput will be about 2,500 TPS.

Layer-two infrastructure is expected to enormously boost Ethereum’s scalability, making the network more efficient. However, added complexities can make it difficult for users to migrate immediately. Experts had earlier criticized Ethereum for its limited throughput and recognized this as the biggest obstacle for adoption. Layer-two scaling solutions are dismantling this critique by enabling the network to process over 2500 transactions per second.

Upcoming ETH 2.0 has been long perceived as the scaling solution that will increase Ethereum’s usage. The second-layer solutions are already achieving this temporarily. OmiseGo, a project working on scaling Ethereum, was launched on mainnet and soon announced that Tether stablecoin would now operate on its layer-two infrastructure.

Starkware, a layer-two solution using ZK rollups, experimented to see what onboarding a subreddit with 1.3 million would do to Ethereum if rollups were used to scale the network. The result revealed that it would only use 2.5% of the network’s bandwidth at an average of $0.003 per transaction. Theoretically, this means that 52 million users could use Ethereum before transaction fees rose significantly.

Vitalik Buterin, the co-founder of Ethereum, believes these solutions are “by and large limited to payments and DEXes.” But token transfer and trading constitute a large portion of Ethereum’s on-chain activity. Despite over 10,000 TPS claims, Buterin estimates that real throughput will be about 2,500 TPS with all the solutions running on top of Ethereum. The network currently has a 15 TPS ceiling. 

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