An Overview of Ethereum’s Layer 2 Ecosystem

Miners of public blockchains like Bitcoin and Ethereum collectively comprise one of the most powerful computing resources in the world, yet offer less power for processing and verifying transactions than a common smartphone. This, of course, is due to the fact that every node in the network executes and stores the state. Minimizing individual resource requirements encourages decentralization and redundancy but limits the overall scalability of the network. 

Demand for Ethereum blockspace is currently at an all-time high, with common transactions like executing a trade on Uniswap frequently costing over $100 in gas. Efforts to scale Ethereum have been the subject of active research and development for years, and while layer 1 scaling may still be years away, layer 2 scaling may be approaching a major inflection point.