l2.watch (Layer 2 Watch) is a website dedicated to providing research and statistics about the very exciting layer 2 technology on Bitcoin.
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Various types of L2s
Sidechains (also known as two-way pegged sidechains) are independent blockchains that share the same native currency as another blockchain. In Bitcoin's context, sidechains operate through a mechanism where bitcoins are locked in a contract on the Bitcoin blockchain, and an equivalent number of bitcoins are minted on the sidechain for transactions. Users can transfer these sidechain bitcoins to a specific contract that annihilates them, thereby unlocking the originally deposited bitcoins on the Bitcoin blockchain.
Federated Sidechains involve users sending their mainnet bitcoins to a multisignature contract managed by a consortium of signatories. This federation also oversees block production on the sidechain, adding an additional layer of oversight.
Drivechains propose a decentralized sidechain model where users deposit their bitcoins into a contract overseen by anonymous Bitcoin miners, who are also in charge of block production on the sidechain. This model introduces a novel way of integrating miner-driven security mechanisms.
Statechains represent an innovative off-chain method for transferring the spending authority of a Bitcoin UTXO (Unspent Transaction Output). Utilizing signature adaptors and a trusted intermediary, the system ensures each new transaction is assigned a higher state number, with the most recent transaction taking precedence. Initially designed for schnorr-based signature adaptors, ongoing efforts aim to extend statechains to support ECDSA-based multisignatures and decrementing locktimes, offering a secure yet less trust-dependent solution than federated sidechains.
Spiderchains consist of a network of interconnected multisignature wallets, distinguishing between Bitcoin as an asset and as a blockchain. This separation facilitates a transition from the UTXO model to an account-based model akin to the Ethereum Virtual Machine (EVM). Spiderchain's forward-secure design safeguards Bitcoin from potential attacks, even in scenarios where an attacker gains significant control.
Anchored Chains refer to blockchain systems that incorporate external data through digital proofs or fingerprints known as anchors. These anchors validate and authenticate external data without storing it directly on the blockchain, combining the security and immutability of blockchain technology with external data verification capabilities.
Rollups are a blockchain scaling approach that executes transactions off-chain while relying on the main blockchain for data availability. By aggregating transactions into batches and processing them off-chain, rollups significantly reduce the data footprint on the Layer 1 blockchain, enhancing scalability.
Sovereign Rollups operate as independent blockchains that utilize a Layer 1 blockchain solely for data availability. They verify state changes internally, allowing for experimentation with various execution environments and functionalities while leveraging the security of the underlying Layer 1 protocol.
Validity Rollups employ cryptographic validity proofs to confirm state updates to the Layer 1 blockchain. These proofs compress transaction data from the rollup and validate the accuracy of state changes, with Ethereum smart contracts maintaining the rollup state. Essentially, they streamline off-chain transactions into a proof that verifies the collective state transition's integrity.
State Channels offer a Layer 2 scaling solution that reduces on-chain transaction volume by facilitating off-chain transactions among participants. These transactions are recorded on-chain once all processes are completed, alleviating network congestion.
Data Availability (DA) in blockchain technology ensures that all transaction data within a block is accessible to every network participant for verification, reinforcing the decentralized network's integrity and trustworthiness.