As usage of blockchain technology grows, the importance for new solutions to address the issues of speed, scalability, and cost, whilst maintaining decentralization, grows ever more present. Being the home of DeFi, Ethereum has been the perfect environment to see the amazing development and also difficulties in bringing traditional financial services to the public and the gas fee crisis coupled with slow transaction times has presented us with an area to revolutionize in the DeFi space. Plethori will leverage layer 2 technology across our entire platform to enable high speed, low-cost trading and deliver fast contract executions creating a smooth experience for the user. The layer 2 solution we will be using is Optimism (optimism.io).
Optimism is a generalized layer 2 solution that utilizes its Optimism Rollups and Optimistic Virtual Machine (OVM) and acts as a ‘child chain’ for the Ethereum blockchain to offload the computational workload of transactions to increase throughput and enable much faster and cheaper transactions.
When a transaction (tx) is received on the Ethereum mainnet (layer 1) the transaction data is stored in layer 1, but the smart contract computational processes occur on the child chain (layer 2) and the results of this computation are then sent back to layer 1. Since computation is the slowest and most expensive part of a tx, this greatly reduces the demands on the ETH layer 1, thereby increasing throughput and decreasing fees. Layer 1 only receives an input, sends it to layer 2, and receives back the result, with the difficult work happening on layer 2.
With the influx of users and high volume we expect on our platform, all users will enjoy the benefits provided by this layer 2 solution whilst still maintaining the high-level security of the layer 1 Ethereum mainnet.