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Home Latest News Defi Vitalik proposes a solution to link certain layer-two scaling projects

Vitalik proposes a solution to link certain layer-two scaling projects

Although L2 DeFi protocols are currently unable to connect with one another, Vitalik has suggested a solution.

Ethereum co-founder Vitalik Buterin has suggested a solution for a new method of cross-rollup scaling in a continuing attempt to tackle escalating transaction costs while building a cohesive ecosystem.

The proposal explains how two rollup-based protocols will interact while maintaining interconnectivity and composability.

Layer-two solutions, or rollups, are smart contract networks that process and store transaction data off the main chain. However, there are several various types of changes be made, each of which uses different smart contracts, such as positive and zero-knowledge.

While a variety of DeFi projects, such as Loopring and Synthetix, have implemented layer-two rollups, the details of the rollups mean projects from interacting directly on layer-two.

Buterin’s plan suggests that one rollup can only handle basic transactions, while the other can handle smart contracts in its entirety. There are now plans for using rollups to transfer data between two smart contract-enabled protocols.

Buterin uses the hypothetical exchange intermediary ‘Ivan’ to illustrate how the idea works. Ivan has an account ‘IVAN A’ on rollup A that he entirely manages, as well as some funds invested in a smart contract ‘IVAN B’ on rollup B.

In order to protect any future transactions, the smart contract must be designed to allow “memos” that include additional data from someone sending to it. The transactions form a linking layer that holds deposits in all of these isolated contracts, allowing rollup A to transfer money to rollup B via this layer.

Buterin suggested that the behavior would work as follows: “Alice sends a transaction to IVAN_A with N coins and a memo ALICE_B. Ivan sends a transaction sending TRADE_VALUE * (1 – fee) coins through IVAN_B to ALICE_B”

According to cointelegraph.com, he went on to suggest that the worst-case situation would be if Ivan failed to send coins to ALICE B as planned.

Buterin emphasized that, in the “worst-case” scenario that could happen as a result of using the proposed situation, Alice will still be able to wait until the transaction on rollup A confirms, find some way to get coins on rollup B to pay fees, and then demand the funds herself.

Responding to the proposal, Alon Muroch pointed out that it worked similarly to how banks clear transactions: “That’s very interesting, similar to how banks clear transactions between themselves. Batching assets into separate “accounts” could have limitations, a solution could be just big pools on either ends and fees split pro-rata.”

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