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Building on Ethereum Layer 2: A Complete Guide

What is an Ethereum Layer 2 Network?

A layer 2 blockchain network is a blockchain network that operates on top of an Ethereum. It is called a "layer 2" network because it is built on top of the underlying "layer 1" blockchain, which is responsible for securing the network and ensuring the integrity of the data.

Layer 2 networks are designed to improve the scalability and performance of the underlying blockchain by moving the transaction execution workload off main chain to a separate layer. This can help to reduce congestion on the main chain and make it more efficient.

There are several different types of layer 2 networks, including sidechains, state channels, and plasma. Each of these approaches has its unique characteristics and is suited to different types of applications and use cases.

Layer 2 networks are an important part of the blockchain ecosystem and are being developed and implemented by several different organizations and projects. They are seen as a key way to help blockchain technology achieve mainstream adoption and address some of the scalability and performance challenges that it currently faces.

What are the advantages of building on Ethereum Layer 2 Networks?

There are several advantages to building on layer 2 blockchains rather than layer 1:

Scalability: One of the main advantages of layer 2 networks is that they can significantly improve the scalability of the underlying blockchain. By taking some of the workload off the main chain and handling it in a separate layer, layer 2 networks can help to reduce congestion on the main chain.

Performance: Layer 2 networks can also improve the performance of the underlying blockchain by reducing the time it takes to confirm transactions and making it easier to execute smart contracts.

Cost: Building on a layer 2 network can be less expensive than building on a layer 1 network because transactions on the layer 2 network are generally cheaper in gas fees.

Compatibility: Layer 2 networks are designed to be compatible with the underlying layer 1 blockchain, which means that they can take advantage of the security and decentralization provided by the main chain.

Innovation: Building on a layer 2 network can also allow for more innovation and experimentation because it provides a separate, more flexible environment in which to build and test new ideas.

It's worth noting that there are also some potential drawbacks to building on layer 2 networks, including the risk of regulatory uncertainty and the fact that they are still relatively new and untested. As with any technology, it's important to carefully consider the trade-offs and choose the approach that is most appropriate for your particular use case.

What should you consider when deciding to build on a Layer 2 Network?

There are several considerations to take into account when building on layer 2 blockchain networks:

Performance: You should consider the performance and scalability of the layer 2 network and how it compares to other options. This will depend on factors such as the type of layer 2 network being used and the specific requirements of your application.

Cost: The cost of using a layer 2 network should be taken into account, including both the cost of executing transactions and the cost of building and maintaining the application.

Security: Security is a critical consideration when building on any blockchain network. You should carefully evaluate the security measures in place on the layer 2 network and ensure that your application is secure.

Regulatory environment: The regulatory environment for blockchain technology is still evolving and can vary from one jurisdiction to another. It's important to be aware of any potential regulatory issues that may arise when building on a layer 2 network.

Adoption: You should also consider the level of adoption and support for the layer 2 networks in the broader ecosystem. A well-supported network with a strong developer community can make building and maintaining your application easier.

Building a project on a layer 2 blockchain can involve several different steps, depending on the specific requirements of your project and the tools and technologies you are using. Here is a general guide to the process:

Choose a layer 2 network: The first step is to choose a layer 2 network that is suitable for your project. This will depend on factors such as the type of application you are building, the performance and scalability requirements, and the level of compatibility with the underlying layer 1 blockchain.
Set up your development environment: You will need to set up a development environment that includes all of the tools and libraries you will need to build your application. This may include a code editor, a version control system, and any other tools that are specific to the layer 2 network you are using.
Define your project requirements: It's important to clearly define the requirements for your project, including the features and functionality you want to build, the target audience, and any performance or scalability constraints.
Design your application: Next, you will need to design your application, including the overall architecture and the user experience. This will involve identifying the key components and features of your application and determining how they will fit together.
Build your application: Once you have a clear design, you can begin building your application. This will involve writing code and testing it to ensure that it meets your requirements and performs as expected.
Test and debug your application: Before deploying your application, you will need to thoroughly test it to ensure that it is working as intended and that there are no bugs or issues. You may need to iterate on your application and make changes based on the results of your testing.
Deploy your application: When your application is ready, you will need to deploy it to the layer 2 network. This may involve uploading the code to the network, setting up any necessary infrastructure, and configuring the application to interact with the network.
Monitor and maintain your application: Once your application is live, you will need to monitor it to ensure that it is functioning as expected and to identify and fix any issues that may arise. You may also need to make updates and improvements to your application over time to keep it running smoothly.

Why should you choose Goshen?

Goshen feels the same as interacting with Ethereum, but faster and with transaction costs at a fraction of what they are on L1. It’s compatible with your favorite Ethereum tools and you can deploy Ethereum contracts directly without worrying about security and compatibility - unlike other L2 blockchains, Goshen is fully Ethereum-equivalent!

Advantages

Low gas fees

Compared to Ethereum, all transaction computation on Goshen is offloaded from L1, the gas fees are therefore orders of magnitude cheaper.

Fast transactions

L1 computation resource is limited and a transaction may be pending for a long time before getting processed. Transactions running on Goshen will be mined in seconds.

High level of security

All L2 state transitions are reproducible and verifiable on L1. Malicious behavior can be challenged by any honest validator.

Developer friendly

Fully Ethereum-equivalent! All Ethereum toolchains work out of the box. Developers can migrate Dapps directly from L1. In most cases, developers do not need to change any code and can deploy on Goshen directly.

Robust fraud-proof system

Goshen has introduced a Collaborative Interactive Challenge to our fraud-proof system. It can deal with various types of attacks while still keeping the simplicity of the protocol.

Efficient state transition

We have implemented an efficient L2 state transition function, which can reduce the off-chain computation and speed up interactive challenges on-chain.

Modular protocol design