Supercharging Web3: Multichains and L2 Solutions

Web3 is the vision for a new decentralized internet. While a better approach than Web2, Web3 faces challenges in scalability, interoperability, development, and accessibility.

But now, with the development of multichains and Layer 2 (L2) solutions, the decentralized web is poised to overcome these issues and open up new possibilities for innovation, user experiences, and mass adoption. In this feature article, I want to delve into the emerging trends and developments in the world of multichains and L2 solutions and examine their impact on the future of Web3.

Multichains: A Step Away from Monolithic & Towards Modular Blockchains

The early days of Web3 were all about blockchain maxis but monolithic blockchains restrict users to their ecosystems.

Today, it's clear that the future of Web3 is multichain. There's no 'winner takes all' attitude anymore, as new blockchains are being introduced with unique benefits for both developers and users.

This multichain future features two dominant trends. The proliferation of smart contract blockchains is the primary one. With its launch in 2015, Ethereum pioneered the introduction of smart contracts, an advanced functionality that wasn't available on Bitcoin, the first blockchain. Then Ethereum integrated a virtual machine (VM) to interpret smart contracts, which paved the way for dApps and ushered in a new era for web3.

However, Ethereum isn't infallible and suffers from frequent spikes in transaction fees, long processing times, and more issues. To solve these limitations, several blockchains have been launched which are explicitly designed to offer faster and cheaper networks.

Multichain solutions overcome the limitations of single-chain architectures and offer scalability, improved transaction throughput, and enhanced network security while fostering collaboration among disparate blockchain networks. A multichain future also means access to different blockchains that come with distinct architecture, creating opportunities for developers to customize DApps to suit the different needs of users.

While all these blockchains used to be siloed off from each other, cross-chain bridges have allowed users to move data and value between distinct blockchain networks. With improvements in bridging technology, this has become even more seamless, which increases the liquidity available to developers working on new blockchain applications.

However, these chains still suffer from scalability issues, leading to the introduction of modular blockchains, a type of blockchain that separates execution from consensus. Layer 2 (L2) scaling protocols are an example of modular blockchains that mitigate the problems associated with monolithic L1 chains.

Layer 2 (L2) Solutions: Scaling the Layer 1s

Layer 2 solutions are secondary protocols that scale throughput on Layer 1 chains through off-chain execution. They are built on top of L1s and are designed to offer high throughput and cost efficiency while providing better security guarantees than alternative L1s by relying on the base layer, such as Ethereum, to settle transactions and enforce validity rules.

It is by separating the execution of transactions from the consensus that L2 chains can achieve improved UX, faster finality, and lower fees than the base layer. This has resulted in several L2 chains growing over the last few years.

These solutions are typically compatible with the Ethereum Virtual Machine (EVM) to ensure that smart contracts can be executed in a cross-chain environment, enabling Web3 developers to build dApps that can interact seamlessly with each other. This has resulted in several DeFi, NFT, gaming, and social dApps being built and hosted on L2 solutions.

L2 solutions have emerged as the leading Infrastructure trend, which has its own native cryptocurrency. Arbitrum, Optimism, zkSync, and StarkNet are popular Layer 2 solutions.

There are many popular approaches taken by L2s to achieve scalability. Optimistic rollup is one which assumes transactions are valid by default and only runs computation via fraud-proof when there's a challenge.

In ZK rollups, computation is run off-chain, and a validity proof is submitted to the chain. Sidechains, meanwhile, are linked to a main chain, and Plasma uses secondary blockchains that assist the main chain in verification.

Layer2 landscape, however, is in its early stages, and L2 scaling solutions continue to iterate and improve on its underlying technology.

Upcoming Future: Convergence of Multichains & L2 Solutions

Over the years, the blockchain industry has come to realize the importance of joining forces rather than becoming "killers of each other." That's why these two building blocks of modern blockchain solutions are being converged to address some of the key challenges faced by existing blockchain platforms, such as scalability, efficiency, and interoperability.

Our analytics team at Listing.Help anticipates that by combining the benefits of both of these approaches, we can have a more robust crypto ecosystem expected to influence the future of the blockchain industry in a way that brings more attention and users to the space. Moreover, it is expected to provide us with better UX for mainstream adoption of Web 3 applications.

As the technology continues to evolve, we'll see advancements in the technology, which will lead to the development of user and developer-friendly solutions and their real-world implementation in the coming future.

But the thing is, it is still an ongoing development though many projects have already started exploring different ways to converge multichains and L2 solutions. Meanwhile, venture capitalists are investing in these protocols to be prepared for the future of Web3.

Unveiling Tomorrow

So, Web 3 is heading towards a multichain future that also involves Layer 2 solutions. And it is full of new opportunities.

For starters, we can expect enhanced scalability, which will lead to faster and cheaper transactions, something the largest smart contracts platform Ethereum continues to struggle with.

The convergence of these two trends can further provide the crypto space with better interoperability between different blockchains and L2 solutions. This can promote the development of innovative and exciting dApps. But this is not all. This integration also has the potential to give rise to specialization, customization, and, more importantly, a better user experience, which is critical to widespread crypto adoption.

However, it is just the beginning, and as we progress further, we will see the true impact of the integration of multichain and L2s become even more pronounced.