The Shanghai Update is a major and far-reaching change to the Ethereum protocol, which is an important part of the development of Ethereum 2.0. With the merger, Ethereum has successfully switched from Proof-of-Work to Proof-of-Stake. The upgrade is designed to make significant improvements to the Ethereum network, including increasing transaction throughput and reducing gas fees. One of the main beneficiaries of these improvements is expected to be layer 2 scaling solutions, which provide a way for Ethereum to handle more transactions without overburdening the main network. In this comprehensive guide, we’ll take a closer look at the top Ethereum layer 2 coins and how they might be impacted by the Ethereum Shanghai Upgrade.
Polygon (MATIC)
Polygon is a popular layer 2 scaling solution that uses sidechains to enable faster and cheaper transactions on the Ethereum network. The upgrade is expected to significantly improve the performance and scalability of Polygon. This is because the upgrade includes the implementation of the EIP-1559 protocol, which will help to reduce gas fees and improve the overall efficiency of the network. This is good news for Polygon users, as it will make transactions faster and cheaper, and make the network more accessible to a wider range of users. The Polygon is one of the top Ethereum layer 2 coins.
Optimism (OPT)
Optimism is another layer 2 scaling solution that uses optimistic rollups to enable faster and cheaper transactions. The upgrade is expected to have a positive impact on the Optimism network, as it will help to reduce gas fees and increase transaction throughput. This is because the upgrade includes improvements to the Ethereum Virtual Machine (EVM), which is the engine that powers the Ethereum network. These improvements will help to make the Optimism network more efficient and scalable and could attract more users to the platform.
Arbitrum (ARB)
Arbitrum is a layer 2 scaling solution that uses rollups to enable faster and cheaper transactions. The upgrade is expected to help increase the scalability and security of the Arbitrum network. This is because the upgrade includes improvements to the Ethereum state tree, which is used to store data on the Ethereum network. These improvements will help to make the state tree more efficient, which will in turn help to improve the performance and security of the Arbitrum network.
zkSync (ZKS)
zkSync is a layer 2 scaling solution that uses zero-knowledge proofs to enable faster and cheaper transactions. The upgrade is expected to have a positive impact on the zkSync network, as it will help to improve the performance and security of the platform. This is because the upgrade includes improvements to the Ethereum storage layer, which is used to store data on the network. These improvements will help to make the storage layer more efficient, which will in turn help to make zkSync more scalable and secure.
Loopring (LRC)
Loopring is a layer 2 scaling solution that uses zkRollups to enable faster and cheaper transactions. The upgrade is expected to help increase the scalability and security of the Loopring network. This is because the upgrade includes improvements to the Ethereum consensus algorithm, which is used to verify transactions on the network. These improvements will help to make the consensus algorithm more efficient, which will in turn help to make Loopring more scalable and secure.
Conclusion
The Ethereum Shanghai Upgrade is expected to have a positive impact on the top Ethereum layer 2 coins, as it will help to increase their scalability, security, and efficiency. This is good news for users of these platforms, as it will make transactions faster and cheaper, and attract more users to the network. However, it’s important to note that the impact of the upgrade on these platforms is speculative, and may vary depending on various factors. As always, it’s important to do your research and consult with a financial advisor before making any investment decisions.