How Layer 2 will affect the future of Ethereum?

Maciej Zieliński

25 Aug 2021
How Layer 2 will affect the future of Ethereum?

Will Layer 2 solve the problem of high fees resulting from Ethereum network congestion? We believe it will. However, many question marks remain.

Ethereum's popularity also has its dark side. As the network becomes more crowded, transaction speeds slow down and fees (gas) increase. Layer 2 is the collective term for solutions to improve application scaling by handling transactions outside of Ethereum's core network, while leveraging its decentralized security model. It is Layer 2 that was supposed to be the answer to the problems facing dapps developers and users today. However, will it overcome the obstacles facing it? 

Why do we need Layer 2?

It was Ethereum that allowed the world of decentralized finance to emerge, but there are still a few problems standing in the way of its further development. Ethereum is currently only able to process 15 transactions per second. This is not much compared to Mastercard or Visa, which are able to process up to 1,500 of them at the same time. 

There are a number of problems with this - the network is often congested, which translates into gas charges, often raising them to extremely high values. Of course, this does not positively affect the scaling of the entire network, nor the dapps on Ethereum built. 

These problems are supposed to be solved by the ongoing upgrade to Ethereum 2.0. However, it will still take a relatively long time before this upgrade is complete. And already today at peak times Ethereum usage reaches up to a million transactions a day, so solutions are needed much sooner. 

Examples of Layer 2 solutions

Among L2 solutions, there is a breakdown into basic categories, including:


These types of solutions use Merkle trees to create an additional chain next to the main blockchain. This allows for faster transactions while reducing costs, since not all data is stored in the ledger. 

However, Plasma also has its limitations: its framework supports only a fraction of transaction types, so it is not suitable for use with more complex DeFi operations.

Examples of Plasma solutions include: Polygon and OMG


Channels allow users to perform multiple transactions off the main chain, while sending two of them to the settlement layer, Ethereum. This significantly increases throughput and lowers costs, but as with Plasma, it has some limitations. First, users must be known prior to transactions and deposit funds as part of a multi-tenant agreement. As a result, the network must be monitored regularly. In addition, setting up channels between users is relatively time consuming, which limits the openness of participation.   

Examples of channels include: Raiden Connext.


Sidechains are chains that operate independently of the main blockchain, using their own consensus algorithm. They connect to Ethereum using bidirectional bridges. 

Examples of Sidechains include Skale i xDAI.

Layer 2 restrictions

Layer 2 solutions are supposed to solve the major problems of Ethereum 2.0, but unfortunately they also turn out to have their potential limitations. Of course, this does not change the fact that Layer 2 remains a necessary step in the right direction, even in the context of upgrading to Ethereum 2.0. The throughput and speed that Layer 2 solutions offer cannot be achieved on Layer 1 of the Ethereum 2.0 network alone. 

However, it is worth remembering that currently Layer 2 is not yet perfect. Here are some of its problems:

Less Composability

It is the composability that is one of the most important features of modern DeFi. Thanks to the mutual compatibility of disparate designs, decentralized finance has been able to conquer the hearts of users around the world. 

Unfortunately, this feature is limited in Layer 2 - currently different Layer 2 solutions do not work together.  In short, a dapp on one chain will not be able to interact with a dapp built on another. 

In Layer One, a single transaction can interact with multiple Defi protocols; in L2, a transaction can only interact with those that exist in its own chain.  

The solution to this problem is seen in interoperable layers such as Polygon, which is supposed to combine all Layer 2 solutions in a standard structure. However, it will take some time before this happens. 


Another issue related to the fragmentation of decentralized applications on different L2 chains is the risk of liquidity constraints. And this, as is well known, is one of the most important elements of financial markets. 

Currently, liquidity is guaranteed by the Ethereum network, providing a liquid marketplace for tokens and dApps created on it. It remains an open question as to what effect transparency on Layer 2 will have on liquidity when it is split between the first Ethereum layer and scaling solutions. 

Problems when switching between solutions 

Unfortunately, at least in the initial phases of development, friction between Layer 2 solutions will not be avoided. We will most likely see numerous bridges between different chains, which may involve long deployment times when moving funds between chains. 

Users can also expect to need to have multiple accounts for different L2 chains. From a UX perspective, this will present one of the most significant problems. 

Implementing Layer 2 solutions with Nextrope

Of course, all of the problems identified above are entirely solvable, and the Ethereum community will likely deal with them as soon as all major Layer 2 scaling solutions are publicly released. 

In this context, a robust network of L2-L2 bridges seems particularly important to maintain compatibility and smooth transitions between different chains. At Nextrope, we have experience in building bridges of various types. If you are looking for a technology partner to create a scalable solution, schedule a free consultation with our experts: 


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What is Account Abstraction?


10 Nov 2023
What is Account Abstraction?

Account abstraction is a new way of thinking about how users interact with blockchains. Instead of using traditional externally owned accounts (EOAs), account abstraction allows users to create and manage their accounts using smart contracts. This has a number of potential benefits, including improved security, enhanced privacy, and increased flexibility.

What is account abstraction?

Account abstraction is a concept that, at its core, aims to simplify the user's interaction with blockchain networks. It is a transformative approach that seeks to mask the technicalities of blockchain operations from end-users. It is making transactions as straightforward as sending an email. Account Abstr. allows users to interact with the blockchain without worrying about the underlying technical details.

How does account abstraction differ from the traditional model?

In the traditional account model, each user has an EOA. EOAs are controlled by private keys, which must be kept secret in order to protect the user's funds. Acc. abstraction allows users to create and manage their accounts using smart contracts.

Historical Context

The journey towards acc. abstraction began with the first generation of blockchain technologies, characterized by their "one-size-fits-all" approach to account management. Bitcoin, for instance, introduced the concept of accounts and transactions in a form that was accessible to tech-savvy individuals but remained perplexing to the layperson. Ethereum expanded on this by introducing smart contracts, which opened the door to programmable transactions but did not alter the fundamental account structure. The idea of acc. abstraction has been discussed in the Ethereum community for several years as a part of various Ethereum Improvement Proposals (EIPs), particularly as a feature to be potentially implemented in Ethereum 2.0. It is a direct response to the need for a more versatile and user-centric design that can cater to a broader audience and spur the widespread adoption of blockchain technology.

The Technicalities of Account Abstraction

Account abstraction is not merely a theoretical construct but a technical innovation with specific mechanisms underpinning its operation. In essence, it alters the way transactions are initiated and executed within a blockchain network.

How Account Abstraction Works

Under traditional blockchain models, initiating a transaction involves an externally owned account (EOA) signing a transaction with a private key. This transaction is then broadcast to the network for validation and inclusion in the blockchain. Account abstraction, however, replaces this process with a more flexible one. Here, every account is a smart contract, and transactions are messages sent through these contracts. These smart contracts can encode complex rules for transaction validation, beyond what EOAs can do, such as multi-signature requirements or conditional transactions based on certain triggers.

The technical crux of account abstraction lies in the smart contract’s ability to define its own conditions for transaction execution. This means that user accounts can have unique security protocols or automated operations without the user needing to understand the underlying smart contract code.

Hey! Are you interested in the latest technologies in the blockchain area? be sure to read the article 'Top Zero-Knowledge Proof Projects to watch in 2023'

The Benefits of Account Abstraction

The implications of account abstraction are profound, offering a range of benefits that can enhance the blockchain experience for users and developers alike.

Improved User Experience

One of the most significant advantages of account abstraction is the improvement it brings to user experience. By abstracting away the complexities of key management and transaction rules, it presents a more intuitive interface for users.

Enhanced Security Features

Account abstraction also allows for the implementation of advanced security measures. Since each account can define its own logic, users can tailor their security settings to their specific needs. For instance, one might set up an account that requires additional verification for transactions exceeding a certain value or restricts withdrawals to certain addresses.

Future Implications

The future implications of account abstraction are vast. As the technology matures, it could become a standard feature of blockchain networks, potentially making the current distinction between user accounts and smart contracts obsolete. This could lead to a new wave of blockchain applications that are both powerful and accessible, bringing us closer to the vision of blockchain technology as a seamless part of everyday life.

Challenges and Considerations

Technical Limitations

One of the primary technical challenges of Acc. abstraction lies in its integration with existing blockchain protocols. Current networks are optimized for the EOA model, and introducing a new account structure necessitates significant changes to the core protocol. This includes modifications to the way transactions are propagated in the network, how gas fees are calculated, and how the state of the blockchain is managed. Ensuring that these changes do not compromise the network's performance or security requires careful planning and extensive testing.

Compatibility with Current Systems

Another consideration is the compatibility of account abstr. with the vast ecosystem of existing blockchain applications and services. Wallets, exchanges, and other services have been built around the traditional account model. Transitioning to an acc. abstraction model will require these services to update their infrastructure, which may be a complex and resource-intensive process. Furthermore, there is a need for standardization across the industry to ensure that different implementations of account abstr. can work seamlessly together.


Acc. abstraction represents a significant leap forward in the quest for a more user-friendly blockchain experience. By streamlining the transaction process and offering enhanced security features, acc abstraction has the potential to make blockchain technology more accessible to a broader audience. However, the path to widespread adoption is not without its obstacles. Technical challenges and compatibility issues must be carefully navigated to integrate it into the existing blockchain landscape.

Key Takeaways

How to Add Gnosis Chain to MetaMask: A Simple Tutorial


03 Nov 2023
How to Add Gnosis Chain to MetaMask: A Simple Tutorial

As the cryptocurrency ecosystem expands, there is an increasing need for various blockchains with distinct capabilities. Gnosis Chain enters the scene, offering a selection of unique characteristics. By integrating Gnosis Chain with MetaMask, users can access a more comprehensive array of decentralized services. We will walk you through the steps to add Gnosis Chain to your MetaMask wallet in this tutorial.


Setting up MetaMask

Before exploring the integration of Gnosis Chain, it is crucial to have MetaMask installed and operational:

  • Download and Install: If you have not done so already, visit the official website to download and install the MetaMask browser extension.
  • Setup Account: After completing the installation, create your account and make sure to remember the provided seed phrase. This phrase serves as your primary means for account recovery, so keep it secure.
  • Secure Your Account: Protecting your MetaMask account is of utmost importance. Use a robust password and never disclose your seed phrase to anyone.

Gnosis Chain

It is always helpful to have a basic understanding before incorporating any new blockchain into your wallet:

  • Gnosis Chain Overview: Gnosis Chain, a rising star in the blockchain world, brings a range of decentralized solutions to the table, such as prediction markets and decentralized trading platforms.
  • Benefits & Features: Among Gnosis Chain's main selling points are its accelerated transaction speeds and potentially lower fees when compared to congested networks.

Tutorial: How to Add Gnosis Chain to MetaMask

In the top right-hand corner of your browser, you'll find the wallet. If pinned, click on the MetaMask fox icon; if not, click the three dots in the top-right corner. The following screen will appear:

An option to expand the wallet to a new browser page is available by clicking "Expand view:"

This action will launch MetaMask in a new tab:

By clicking on the ‘Ethereum mainnet’ in the top left corner, you can add another network. Click ‘Add Network’

Choose option ‘Add a network manually’

Then, input the information below:

Network Name: Gnosis Chain formerly xDai


ChainID: 100

Symbol: XDAI

Block Explorer URL:

After saving the settings, Gnosis Chain will be added to your network.

The Benefits of Adding Gnosis Chain to MetaMask

With multiple blockchains becoming more common, integrating Gnosis Chain with MetaMask offers numerous advantages:

Expanded Capabilities: Accessing Gnosis Chain through MetaMask opens up a collection of exclusive applications and features inherent to this particular blockchain, which may include unique dapps or cutting-edge financial products.

Diversification: The crypto domain is extensive and constantly growing. By incorporating various chains like Gnosis into MetaMask, you broaden your potential investment opportunities and decentralized application experiences, ensuring no opportunities are missed.

Speed & Cost-Effectiveness: Network congestion and high gas fees on established platforms like Ethereum can discourage many users. Gnosis Chain's architecture has the potential to provide relief through quicker transaction times and more affordable fees.

In summary, as the possibilities within the crypto sphere continue to evolve, tools like MetaMask grant users access to this expanding world. By adding chains like Gnosis, users can stay ahead in this decentralized revolution.


By bridging platforms like Gnosis Chain with accessible tools like MetaMask, individuals not only amplify their engagement with decentralized applications but also fortify their position in this expansive realm. The integration of Gnosis Chain to MetaMask epitomizes the evolution of the crypto landscape – a testament to its ever-growing diversity and potential. As we continue to delve deeper into the decentralized future, tools and integrations like these will undoubtedly play a pivotal role in shaping our digital experiences and opportunities. Whether you're seeking more efficient transactions, diverse dapp interactions, or simply a broader understanding of the crypto ecosystem, this guide's steps open doors to a new horizon.