Why Ethereum Layer 2 Solutions Struggle with Scalability and Cost
Dec 26, 2024

Amy

Hey, have you heard that Ethereum’s Layer 2 solutions are struggling with scalability and cost challenges? They’re having a hard time competing with blockchains like Solana.

Sam

Really? I thought Layer 2s were supposed to fix Ethereum’s problems. What’s going wrong?

Amy

Good question! The main issue is that most Layer 2 solutions inherit Ethereum’s limitations, like its single-threaded architecture. Unlike Solana, which can handle multiple transactions at once, Ethereum processes only one transaction at a time.

Sam

Oh, so Ethereum is slower because it can’t multitask? That sounds like a big disadvantage.

Amy

Exactly! Solana’s multithreaded design lets it handle way more transactions per second, which is great for fee-sensitive projects like memecoins. On Ethereum, even Layer 2s like Arbitrum or Optimism can only handle a few hundred transactions per second.

Sam

But aren’t fees lower on Layer 2s? That should help, right?

Amy

They are lower, but fees on Ethereum-based Layer 2s can still spike when the network is busy. For applications that rely on stable, low fees—like memecoins—that’s a major drawback.

Sam

So, what about interoperability? Can Layer 2s at least work together to share the load?

Amy

Not really. Each Layer 2 is like its own mini blockchain, and they don’t interact easily. It’s as hard to connect two Layer 2s as it is to connect two completely different blockchains.

Sam

That sounds like a mess. Is anyone working on fixing this?

Amy

Yes! Ethereum developers are working on tools like the ERC-7786 Cross-Chain Messaging Gateway to improve communication between Layer 2s and Ethereum’s main chain. But it’s still a work in progress.

Sam

What about changing Ethereum’s design? Can they make it multithreaded like Solana?

Amy

That would help, but it’s not easy. It would require overhauling Ethereum’s core architecture, which is a massive task. Some experts think it’s worth it for the scalability gains, though.

Sam

So, does this mean Solana is winning the blockchain race?

Amy

Not exactly. Ethereum is still the biggest ecosystem, especially for things like DeFi. But Solana is attracting a lot of new developers and projects because of its speed and low fees. It’s definitely a strong competitor.

Sam

It sounds like Ethereum has a lot of catching up to do. Do you think it can fix these problems?

Amy

I think so. Ethereum has a huge community of developers, and they’re already working on solutions. It’ll take time, but if they can address these challenges, Ethereum can stay competitive.

Sam

I hope they do! It’s exciting to see how these blockchains evolve, but it’s clear they have a long way to go.