Unpacking NEAR and Ethereum’s contrasting approaches to blockchain scalability

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The blockchain scalability landscape has evolved significantly in recent years, with Layer 2 (L2) and sharding emerging as two major approaches.

While Ethereum, a major player in the cryptocurrency industry, adopted rollup-centric L2 to scale its network, the NEAR protocol chose to scale with sharding and chose a different path. Both strategies offer unique solutions to blockchain scalability, but also present unique challenges.

Layer 2 of Ethereum: A rollup-centric approach

NEARWEEK, NEAR Protocol Publications, praised Ethereum has attracted a lot of attention for its innovative rollup-centric scaling strategy. The L2 protocol builds on existing blockchains to enhance scalability, throughput and privacy. This is accomplished by executing state transitions off-chain from Layer 1 (L1) where state transitions are built, and committing the state root and transaction data to the underlying L1.

At NEAR, we believe the driving philosophy behind rollup is the belief that rollup outperforms the underlying L1 in terms of throughput due to reduced consensus overhead. In practice, however, NEAR believes the overall scaling achieved across rollups is somewhat disappointing and barely exceeds what a single rollup can offer.

However, data from L2 analytics platform L2Beat presents a contrasting view with an increase in L2 activity over the past year, as shown in the graph below.

l2beat activity
Source: L2Beat

Additionally, looking at the top 10 for Ethereum L2, we can see that Arbitrum One and zkSync Era are closing in on Ethereum in terms of monthly transactions. Additionally, Immutable X and Arbitrum Nova surpassed Ethereum in average transactions per second (TPS) growth over the 7-day period. Notably, as of July 3rd, Ethereum had the highest active TPS of any L2 scaling solution on the network.

# name TPS for the past day 7D change Maximum TPS per day 30D count Information source
1 ethereum 12.29 6.48% 22.37 (2022 12 09) 31.45 meters Blockchain RPC
2 Arbitrum One 9.69 -4.17% 31.64 (2023 3 23) 24.81 meters Blockchain RPC
3 The zkSync era 8.63 -14.74% 12.00 (May 16, 2023) 22.27 meters Blockchain RPC
Four OP mainnet 6.00 -12.97% 9.26 (Jan 12, 2023) 14.82 meters Blockchain RPC
Five dYdX 3.09 -38.54% 11.45 (February 15, 2022) 9.42 meters Closed API
6 Immutable X 2.01 7.47% 39.35 (March 11, 2022) 5.67 meters Closed API
7 Starknet 1.79 -9.17% 3.05 (May 16, 2023) 4.61 meters Explorer API
8 Arbitrum Nova 1.34 18.15% 10.93 (2023 Apr 27) 2.99 million Blockchain RPC
9 vertex 0.95 2.27% 1.38 (2023 Apr 13) 2.68 meters Closed API
Ten zkSync light 0.89 -27.20% 3.29 (Mar 21, 2023) 2.52 meters Explorer API
11 Polygon zkEVM 0.64 -5.13% 0.82 (June 13, 2023) 1.34 meters Blockchain RPC

data from

However, the main cause of the performance slump suggested by NEAR is that popular Ethereum decentralized applications (dApps) run on nearly every rollup, resulting in similar transactions being “overlapped” across different rollups. This is probably due to the fact that

NEAR’s shard-centric approach

Conversely, the NEAR protocol chose to address scalability through sharding, which divides the network into discrete segments built directly into the protocol. According to NEARWEEK, each shard in NEAR’s architecture can be compared to an optimistic rollup in Ethereum’s approach.

A key advantage of NEAR’s sharding approach is its composability, which allows applications on one shard to natively interact with applications on another shard. This homogeneous sharding model eliminates the need for developers to decide which shard to deploy an application to, because it interacts in the same way regardless of whether the application is deployed on the same shard.

Additionally, NEAR’s sharding model reduces transaction finality to typically within 2-3 seconds, outperforming the extended finality time of rollup universes.

Real-time TPS for the NEAR protocol is not listed in Block Explorer, but can be calculated based on data from the latest blocks.a crypto slate Analysis of transactions from NEAR block explorer showed that the average TPS on July 4th was about 5.7 transactions per second. This snapshot of NEAR’s TPS aligns with the top five L2s on the Ethereum network. The NEAR community predicts that the protocol’s potential with sharding will reach 100,000 TPS in the future.

contrasting design philosophies

The different scaling approaches taken by Ethereum and NEAR highlight their contrasting design philosophies. Ethereum maintains a simple L1 protocol design and prioritizes resilience, while the NEAR protocol emphasizes a simplified user experience and undertakes additional protocol complexity to ensure a good UX, he said. NEARWEEK said.

Additionally, NEAR aims to act as a blockchain operating system (BOS) and provide a universal layer for navigating and discovering open web experiences, and thus aims to be “just L1”. It is important to note that this is not the case. Through BOS, NEAR aims to

“It enables developers and users of various blockchains, including Ethereum Layer 2, to build and consume applications across multiple blockchain ecosystems.”

For more information on NEAR’s BOS vision, please visit: Moderate account.

Blockchain scalability remains a complex and important issue in the cryptocurrency world. As Ethereum’s rollup-centric L2 and NEAR sharding evolves, it will be interesting to see which approaches prove most effective in the long run.

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