Layer 2 Blockchain Scaling: a Survey

TL;DR

This survey reviews current Layer II blockchain solutions like Lightning Network, Plasma, and Rollups, analyzing their impact on scalability, security, decentralization, privacy, and costs, highlighting their strengths and trade-offs for different applications.

Contribution

It provides a comprehensive comparison of major Layer II solutions, detailing their effects on key blockchain aspects and guiding application-specific choices.

Findings

All solutions improve scalability effectively.

No single solution dominates across all aspects.

Trade-offs are necessary depending on application context.

Abstract

Blockchain technology is affected by massive limitations in scalability with consequent repercussions on performance. This discussion aims at analyzing the state of the art of current available Layer II solutions to overcome these limitations, both focusing on theoretical and practical aspects and highlighting the main differences among the examined frameworks. The structure of the work is based on three major sections. In particular, the first one is an introductory part about the technology, the scalability issue and Layer II as a solution. The second section represents the core of the discussion and consists of three different subsections, each with a detailed examination of the respective solution (Lightning Network, Plasma, Rollups); the analysis of each solution is based on how it affects five key aspects of blockchain technology and Layer II: scalability, security, decentralization, privacy, fees and micropayments (the last two are analyzed together given their high correlation). Finally, the third section includes a tabular summary, followed by a detailed description of a use-case specifically thought for a practical evaluation of the presented frameworks. The results of the work met expectations: all solutions effectively contribute to increasing scalability. A crucial clarification is that none of the three dominates the others in all possible fields of application, and the consequences in adopting each, are different. Therefore, the choice depends on the application context, and a trade-off must be found between the aspects previously mentioned.