Original Title: "Layer2 Battle is About to Begin, Systematically Sorting Out the Latest Developments of 11 Major Layer2 Networks"

Original Source: Xiyu, ChainCatcher

As the KanKun upgrade approaches, Layer2 networks have become the hottest narrative track in the second half of 2023. Since July, the TVL of Layer2 has often remained above 10 billion US dollars.

Recently, multiple veteran public chains have announced their shift towards Layer2, with some even securing significant financing.

On July 17th, cLabs, the development organization of Celo, proposed to transform Celo from an independent EVM-compatible Layer1 blockchain to an Ethereum Layer2 based on OP Stack.

On July 12th, Manta Network, a Layer1 public chain based on ZK, announced the launch of Manta Pacific, a Layer2 network designed specifically for zero-knowledge proof (ZK) applications based on OP Stack. On July 19th, its developer, p0x labs, completed a Series A funding round with a valuation of $500 million and raised $25 million, led by Polychain Capital and Qiming Venture Partners.

除了老牌 Layer1 网络转向 Layer2 外，原生 Layer2 网络动作也频繁、消息不断。

In addition to the traditional Layer1 network shifting to Layer2, there are also frequent and continuous actions in the native Layer2 network.

Among them, Rollup-based networks such as Arbitrum, zkSync, and StarkNet have announced the release of open-source toolkits, such as Stack, to build corresponding Layer3 networks. The MetisDAO Foundation, a forked project of Optimistic Rollup, has released its incubated Hybrid Rollup-based network, ZKM. The Loopring Protocol has announced the construction of its own Layer3 network based on the zkEVM Layer2 network, Taiko, and so on.

Obviously, the Layer2 market has entered a fierce competition stage. According to the encrypted data platform Rootdata, there are already 77 recorded Layer2 related network infrastructures, including modular blockchains, zkRollup, Optimistic Rollup, application chains, and more.

Currently, the Layer2 market is mainly dominated by two mainstream expansion solutions: Optimistic Rollup and zkRollup. So, what are the representative networks of the Optimistic Rollup system and the zkRollup system? How are they progressing? What opportunities are there for user participation?

One, Optimistic Rollup has five networks: Arbitrum, Optimism, Metis, Boba, and Mantle

Arbitrum on-chain TVL has exceeded $6 billion, ranking first in the Layer2 track

As of July 20th, the value of encrypted assets locked on the Arbitrum chain is approximately $6.09 billion, ranking first in TVL among many Layer2 projects, with a market share of 59.78%. The native token ARB was officially launched for trading in March of this year, with a current price of $1.26 and a market capitalization of $1.6 billion, ranking 36th among encrypted assets.

In addition, the number, prosperity, and activity of ecological applications deployed on the Arbitrum chain are far ahead of other Layer2 networks.

According to the official ecosystem portal page, Arbitrum Portal, there are 559 included projects in the Arbitrum ecosystem, covering applications in various sectors such as wallets, cross-chain bridges, DEXs, lending, gaming, and NFTs. Among them, the major representatives include well-known mainstream applications such as Uniswap, Aave, Curve, and 1inch that have migrated from external sources, as well as native decentralized perpetual contract GMX, full-chain lending Radiant, native DEX Camelot, and metaverse gaming ecosystem Treasure.

Arbitrum is a Layer2 scaling solution built on the Arbitrum Rollup (an improved version of Optimistic Rollup) technology. It was launched on the mainnet in August 2021.

Currently, there are three main networks in the Arbitrum ecosystem, including Arbitrum One, Arbitrum Nova, and Arbitrum Orbit.

Arbitrum One: is the core Rollup chain of the current Arbitrum ecosystem, and all transaction data is stored on the Ethereum mainnet. The L2 and on-chain ecosystem applications we often refer to usually run on this mainnet. It should be noted that Arbitrum Nitro is an upgraded version of Arbitrum One, and the name of the mainnet Arbitrum One has not been changed after the upgrade.

Arbitrum Nova is a new network designed for gaming, social applications, and high-throughput DApp use cases, built on AnyTrust technology. The network's transaction data is stored off-chain and managed by a data committee called DAC. Compared to Arbitrum One, which is secured by Ethereum, Arbitrum Nova has lower security, but its gas fees are 90% lower than Arbitrum One. It is particularly suitable for applications such as gaming and social media that require high-frequency transactions and low transaction fees. The Reddit community points system (such as MOON) is built on this network and supports developers in building games, social media, and other applications that use Reddit tokens. Opensea and TreasureDAO have also launched their NFT markets on Arbitrum Nova.

Arbitrum Orbit: is an open-source toolkit for building L3 networks, supporting developers to deploy and create their own chains. Developers can build their own Rollup and AnyTrust chains (L3) based on the Orbit toolkit, choosing either Arbitrum One or Arbitrum Nova as the settlement layer to achieve scalability. Choosing between Rollup and AnyTrust represents a trade-off between decentralization and performance.

Currently, multiple applications have partnered with Arbitrum Orbit to create their own L3 networks. Among them, AltLayer, an Ethereum scaling service platform, has supported Arbitrum Orbit, allowing users to launch Arbitrum's L3 application chain in just a few minutes using a no-code tool. In June, Xai Network, designed specifically for gaming, announced that it will utilize Arbitrum Orbit technology to launch an L3 blockchain tailored for the gaming industry. Also in June, Syndr, a DeFi derivatives trading platform, announced the launch of Syndr Chain based on Arbitrum Orbit. The testnet is already online and is currently in the beta testing phase. To experience it, you need to apply. Recommended reading: "Is it necessary to upgrade to Layer3 with Arbitrum and zkSync pushing for Layer2 upgrades?"

Regarding the incentive aspect of the Arbitrum ecosystem, on July 20th, the Arbitrum Foundation announced that it will provide grants to eligible dApps and infrastructure for Arbitrum Nova and Arbitrum One to promote the development of the ecosystem.

Optimism Towards the Kingdom of Super Chains

Optimism is a Layer2 scaling solution built on Optimistic Rollup. Currently, the value of locked-up encrypted assets on the chain is 2.42 billion US dollars, accounting for 24.2% of the market share, making it the second largest Layer2 network. Its native token, OP, is currently priced at $1.48 with a market capitalization of $950 million, ranking 45th among encrypted assets.

Compared to Arbitrum, the prosperity of the Optimism ecosystem on-chain is slightly inferior. According to DeFiLlama data, there are currently 153 Optimism ecosystem applications counted.

However, Optimism has already entered the kingdom of superchains with the OP Stack component, and has carved out its own path in the Layer track.

OP Stack is an open-source modular toolkit launched by Optimism, covering data availability layer, execution layer, settlement layer, governance layer, etc. Developers can use the OP Stack toolkit to assemble a customized Layer2 network according to their own needs and scenarios.

Therefore, OP Stack introduced the concept of a superchain for Optimism, which refers to a group of Layer2 blockchains (also known as OP chains) built on top of OP Stack.

But the super chain is different from the multi-chain. The current multi-chain architecture (such as Cosmos) actually introduces new consensus algorithms on each chain. Every time a new chain is launched, a new validator set needs to be started, and the security and information between chains cannot be shared. The super chain, on the other hand, is standardized with consistent consensus algorithms and security guaranteed by the Layer1 blockchain (Ethereum mainnet). Additionally, due to the standardized architecture of the chain, resources and information can be shared between chains.

For example, in a superchain, if the standards for constructing A Layer2 and B Layer2 networks are the same, then the wallets, applications, and tokens on both chains can directly communicate and be used interchangeably. At this point, users no longer need to pay attention to the concept of A or B chain, and can view them as a single unit "superchain". This allows developers to build applications targeting the entire superchain.

On June 24th, Optimism Blockchain announced its rebranding as OP Mainnet to differentiate it from the Optimism ecosystem built on OP Stack. OP Mainnet is just one of many basic chains in the Layer2 superchain network. This can be understood as, currently in the Optimism ecosystem, OP Mainnet and multiple L2 networks built on OP Stack together form the Optimism superchain kingdom.

Currently, there are dozens of Layer networks built on the OP Stack.

其中，7月份刚刚过半就有3个项目宣布将基于OP Stack推出相关Layer2网络。

Three projects announced in mid-July that they will launch related Layer2 networks based on OP Stack.

On July 16th, cLabs, the development organization of the Layer1 public chain Celo, proposed to transform Celo into a Layer2 based on OP Stack.

On July 12th, Manta Network, a Layer1 public chain based on ZK, launched Manta Pacific, a Layer2 network designed specifically for zero-knowledge proof (ZK) applications using OP Stack. Manta Network also renamed its Layer1 network to Manta Atlantic. The Manta ecosystem will now consist of two parts: Manta Atlantic and Manta Pacific, the latter being an EVM native modular execution layer.

On July 7th, the Public Goods Network (PGN), supported by Gitcoin, was also built on the OP Stack.

Before this, multiple well-known Web3 enterprises have deployed Layer2 networks through OP Stack.

Base - Coinbase announced the launch of Layer2 network Base based on OP Stack, and has now developed the main network for developers to deploy applications. It is expected to be open to the public in early August.

opBNB - BNB Chain launches a Layer2 testnet based on OP Stack, and is expected to launch the mainnet in Q3 2023.

Magi—a16z announced in April the launch of Magi, a Rollup client solution based on OP Stack.

Worldcoin ID - Worldcoin ID announced that it will build an application chain based on OP Stack and build an ecosystem related to on-chain identity systems.

There are still many games and NFT projects choosing to build their own networks based on OP Stack.

Zora Network—NFT trading platform Zora announced the launch of Zora Network, a Layer2 network based on OP Stack.

Loot Chain - The Loot ecosystem project Adventure Gold DAO adopted the OP Stack to build the Layer2 network Loot Chain, and uses its native token AGLD as the Gas Token.

OPCraft - A blockchain virtual world game dedicated chain developed by Lattice, a blockchain game developer, using OP Stack.

In addition, in terms of network performance, Optimism has been continuously optimizing and improving. In June of this year, Optimism announced the completion of the Bedrock upgrade on the mainnet, further reducing transaction fees, shortening deposit confirmation times, and improving performance. According to Dune data, since the completion of the Bedrock upgrade, the average gas cost per transaction on Optimism has decreased by approximately 75%. Optimism's mainnet has become the cheapest Ethereum L2 network for token exchange, with a gas fee of about $0.1 per transaction.

Optimistic Rollup fork project Metis Network

Metis Network (referred to as Metis) was originally built on OptimisticRollup technology as a Layer2 scaling network. Due to adjustments made in Optimistic Rollup to improve the delay in extracting assets from Layer2 to Layer1, asset withdrawals now only take a few hours or minutes. Therefore, Metis is also considered a fork project of Optimistic Rollup, and its mainnet is called Andromeda.

On July 13th, the MetisDAO Foundation announced the official release of its incubated new project ZKM (formerly known as Project M), and upgraded its existing Optimistic Rollup to Hybrid Rollup. ZKM will be launched on the testnet before the end of the year.

ZKM is a Layer2 scaling solution that uses the Hybrid Rollup mechanism. The Hybrid Rollup approach combines the Optimistic Rollups and ZK Rollup solutions to form a single Rollup protocol, leveraging the advantages of each. The ORU architecture provides developers with an easy-to-code environment, while ensuring users with the finality, security, and decentralization that ZKRU can provide, enabling timely withdrawals while ensuring security.

Actually, as early as March, MetisDAO stated on their blog that they were developing a Hybrid Rollup based on Optimistic Rollup (OPR) and the combination of zero-knowledge proof ZK Rollup, which combines the scalability of Optimistic Rollups with the security of ZK Rollup. This will be an important task in the Metis mainnet Andromeda 2023 roadmap.

Currently, Metis has a TVL of $88.97 million on-chain, ranking 8th among many Layer2 networks. Its mainnet Andromeda uses the METIS token as a payment method for on-chain gas fees, with a gas fee of $0.0064 per transaction. METIS is currently priced at $17 with a market cap of $74.3 million.

According to DeFiLlama data, there are 40 on-chain ecosystem applications in Metis, including mainstream DeFi applications such as Aave, SushiSwap, and Stargate.

Multi-chain Layer2 scaling solution Boba Network

Boba Network is also an Ethereum Layer2 scaling solution built on OptimisticRollup technology, created by the Enya team, core contributors to the OMG Foundation. In April of last year, Boba Network completed a Series A funding round of $45 million with a valuation of $1.5 billion. This round of funding had over 400 participants, including well-known cryptocurrency exchanges such as Crypto.com, Huobi, and BitMart.

Unlike other Layer2 solutions, Boba Network is a multi-chain Layer2 scaling solution that not only supports scaling Ethereum, but also all EVM-compatible Layer1 blockchains, becoming their Layer2 network. Currently, Boba L2 has been deployed on networks such as Moonbeam, Fantom, Avalanche, and BNBchain.

Currently, the Boba Network has a TVL of only $9.75 million and 24 ecosystem applications, including SushiSwap, OolongSwap, and lending application Bodh Finance.

Backed by Bybit's Layer2 network Mantle Network

Mantle Network is an Optimistic Rollup-based modular Layer2 scaling solution incubated by BitDAO, which launched its testnet in January this year. As BitDAO is a decentralized autonomous organization initiated by the centralized exchange ByBit, Mantle Network is also considered a Layer2 network supported by ByBit.

On July 17th, Mantle Network announced the launch of its mainnet Alpha version at the EthCC conference in Paris.

Unlike Arbitrum and Optimism, the Mantle architecture adopts a modular design, which means that the core operations of the blockchain (such as execution, consensus, settlement, and data availability) can be split and executed on specialized layers to improve network efficiency. In Mantle, Optimistic Rollup and data availability solutions are combined to ensure that it can inherit the security of Ethereum while providing cheaper and easier access to data availability.

In Mantle, the mainnet provides the execution layer, consensus, and settlement on L1 Ethereum, while data availability (data storage and data publishing) is handled by the specialized service provider Eigenlayer, which improves on-chain formation and provides new scalability possibilities.

In June, BitDAO announced that BitDAO, Mantle, and BIT ecosystem will be merged into Mantle, with MNT token serving as the unified token of its ecosystem. BIT token can be converted to MNT at a 1:1 ratio.

Currently, Mantle Network has deployed 89 DApp applications on the chain, covering DeFi, infrastructure, and gaming products, but there are no mainstream Ethereum applications migrated and deployed.

二：zkRollup Network of 6 Networks: ZkSync, Starknet, Polygon zkEVM, Linea, Scroll, Taiko

Currently, the zkRollup network is mainly compatible with Ethereum EVM. Its compatibility can be divided into four categories according to V God's blog "The different types of ZK-EVMs": fully equivalent to Ethereum, fully equivalent to EVM, almost equivalent to EVM, and equivalent to advanced procedural languages.

Among them, Taiko zkEVM belongs to Type-1 and is completely equivalent to Ethereum without changing the design of the Ethereum system. ZK proof takes a long time (several hours) to generate; Polygon, Linea, and Scroll belong to Type-3, which is almost equivalent to EVM and has made some concessions in equivalence, shortening proof time and simplifying EVM development. Their goal is to become a Type-2 fully equivalent EVM; zkSync Era and StarkNet belong to Type-4, which adopts its own high-level programming language, has short verification time, but poor compatibility.

Compatibility means whether or not it can provide non-developers with the same development experience as on Ethereum, and the ease of deploying applications. Proof verification time means the time it takes for user funds to be returned from L2 to L1. If proof generation takes several hours, it means that users cannot bridge their funds back to L1 during these hours.

ZkSync has launched the development component zkStack for building L2 or L3

ZkSync is a zkRollup scaling solution developed by the MatterLabs team based on zkSNARK (non-interactive zero-knowledge proof). In February of last year, ZkSync announced that its zkSync 2.0 network was renamed zkSync Era, and zkSync 1.0 was renamed zkSync Lite. The former, zkSync Era, is a ZK Rollup project based on zkEVM, which is compatible with EVM; the latter is not compatible with EVM and mainly focuses on the payment field.

Currently, the zkSync Era has a TVL of 524 million US dollars on-chain, ranking third among many Layer2 networks, and is the leading project in the zkRollup network.

In June, zkSync officially announced the launch of modular open-source components called ZK Stack for building custom zkRollup networks. Developers can use this toolkit to build custom zkRollup L2 and L3 networks (also known as HyperChains).

On July 16th, zkSync Era announced that they would airdrop LIBERTAS OMNIBUS NFTs to 10,000 randomly selected users from their active community of approximately 180,000 members. However, some users later discovered that the so-called "random" selection was actually based on the project team sorting the addresses of all 180,000 members and airdropping NFTs to the top 10,000. The team later acknowledged that the initial distribution of NFT addresses was inaccurate and plans to relaunch the LIBERTAS OMNIBUS NFT issuance in the coming weeks.

Additionally, on July 17th, zkSync Era announced the release of a new proof system, Boojum, which will transition from zkSNARK to a zkSTARK-supported proof system.

Starknet launches application chain

StarkNet is a zkRollup-based scaling network developed by StarkWare. StarkWare's scaling solutions mainly include two implementation modules: StarkNet (Layer2 scaling network) and StarkEx (scaling technology). The former is mainly a Layer2 network for users, while the latter is a scaling solution service specifically provided for Ethereum applications. The initial dYdX, DeversiFi, Immutable X, etc. were created based on StarkEx.

Currently, the most commonly used and mentioned by users is StarkNet, with an on-chain TVL of $112 million, making it the second largest zkRollup network. However, StarkNet is not compatible with Ethereum's EVM.

Regarding compatibility with Ethereum EVM, StarkNet plans to achieve it through two projects in its ecosystem, kakarot and Warp. Among them, Kakarot is a zkEVM implemented on StarkNet using the Cairo language, belonging to Type-2.5. In June of this year, Kakarot just received pre-seed funding from StarkWare and Vitalik Buterin, and is expected to launch a testnet soon; Warp is a translator that converts Solidity code into Cairo code to achieve compatibility with Ethereum EVM, belonging to Type-4.

From this perspective, Warp is compatible at the high-level language level, while Kakarot is compatible at the EVM level.

On July 19th, Eli Ben-Sasson, co-founder of StarkWare, announced at the EthCC conference in Paris that StarkNet will soon launch StarkNet Appchains. The StarkNet stack allows applications to launch custom StarkNet Appchains. On July 21st, the crypto liquidity platform Paradigm incubated a decentralized perpetual derivative Layer2 application chain called Paradex on StarkNet.

Polygon zkEVM becomes a member of the many ZK-based networks in Polygon 2.0

Polygon zkEVM is an Ethereum Layer2 zkEVM scaling solution built on ZK Rollup technology. The testnet mainnet was launched on March 27th. Polygon zkEVM is now almost fully equivalent to EVM and is striving to become a fully equivalent version of EVM.

In June, Polygon announced the launch of Polygon 2.0 upgrade. Polygon PoS will be upgraded to zkEVM Validium to make it compatible with ZK technology. Polygon 2.0 is a L2 multi-chain network ecosystem driven by ZK technology, including zkEVM, PoS, and Supernets subnetworks. In fact, as early as March of this year, Immutable X, a Layer2 network focused on gaming scenarios, announced a new zkRollup scaling solution, Immutable zkEVM, in collaboration with Polygon. Web3 game infrastructure developer zkMeta also said it is working with Polygon to create a game-specific zkRollup.

In July, the Polygon 2.0 official proposal upgraded the original MATIC token to POL and released a new POL whitepaper. The POL token will operate within the entire Polygon ecosystem, with an initial supply of 10 billion and a 2% annual inflation rate. The Polygon PoS chain will use POL as a gas fee payment method, while other chains can choose to use POL or issue their own native tokens. Additionally, Matic is currently priced at $0.76 with a market cap of $7.15 billion and ranked 12th.

On July 13th, the Polygon team announced their plan to create a new governance framework for Polygon 2.0. The new governance model will consist of "three major governance pillars," including the expansion of the Polygon Improvement Proposal (PIP) framework, the introduction of an ecosystem committee for system smart contract upgrades, and community treasury governance to provide funding for promising ecological projects.

Currently, the TVL (Total Value Locked) of Polygon zkEVM chain is 54.49 million US dollars, with a total of 19 deployed DApps. Among them, 9 are data infrastructure and cross-chain bridges, while the other applications include stablecoin QiDao, DEX Quickswap and Leetswap, lending protocol 0vix, NFT trading platform Zionic, and yield farming pool AntFarm.

ConsenSys's Ethereum Layer 2 solution Linea

Linea is a Zk-rollup Layer2 scaling solution compatible with EVM developed by Consensys, the parent company of MetaMask.

On July 18th, at the EthCC conference, ConsenSys announced the official public launch of Linea zkEVM mainnet alpha, and also airdropped related NFTs to participants during the Linea Voyage event.

According to Rootdata, there are a total of 71 projects in the Linea ecosystem, including deployed lending application LineaBank, DEX platform FWDEX, cross-chain exchange aggregator XY Finance, cross Rollup chain Owlto Finance, NFT marketplace Zoni, and mainstream DeFi applications such as Aave, Airswap, Sushiswap, and Pancakeswap that are currently being migrated and deployed.

Currently, Linea's on-chain TVL is 11.99 million US dollars.

Regarding whether Linea Network has a token issue, the official response is that Linea Network currently uses Ethereum, which is directly bridged from the Ethereum mainnet, as its ecological token. However, many users still expect Linea Network to issue new governance tokens like Arbitrum and OLayer2 networks, and airdrop them to users.

Scroll

Scroll is also based on zkEVM's zkRollup to expand Ethereum. In February of this year, Scroll Alpha testnet was launched on Goerli and is currently still in the testing phase.

EVM compatibility is the same as Polygon zkEVM, and Scroll is also working hard to achieve full EVM equivalence.

In April, Scroll co-founder Sandy Peng stated at a conference that the mainnet would be launched in the next three to four months. However, as of July 21st, there has been no public information released regarding the progress of the Scroll mainnet.

Loopring Protocol developed Taiko

Taiko is a zkRollup-based scaling solution (zkEVM belongs to Type-1) created by members of the Loopring protocol team in the encryption industry. Later, Taiko separated from Loopring and developed independently.

According to the encrypted data platform RootData, Taiko completed two rounds of seed funding totaling $22 million on June 8th. The first round of funding was $10 million, led by Sequoia China and ended in the third quarter of 2022. The recent second round of funding was $12 million, led by Generative Ventures.

On July 18th, Taiko announced the launch of Alpha-4 testnet (Eldfell L3), which aims to test the performance of Taiko's deployment of L3 network and make Taiko the settlement layer of L3 network. In fact, as early as the beginning of July, the veteran zkRollup scaling solution Loopring protocol announced the official launch of its L3 network on Taiko zkEVM Alpha-3 testnet, which is tailored for DeFi and NFT applications.

During the same period, Taiko announced the launch of a community funding program aimed at discovering and supporting innovative projects established and developed within the Taiko ecosystem, providing them with economic incentives and developer resources. All grants will be awarded in the form of Taiko's native token, TTKO.

According to the official website of Taiko, the current amount of ETH stored is approximately 730,000, with a value of around 130 million US dollars.

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