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Ethereum started 2023 with only good news and updates. The Shanghai and Capella updates will make the network faster and lower gas and other transaction fees to improve user experience. The price of Ethereum has also leveraged positive investor sentiments, which promotes the cryptocurrency and blockchain as stable and more reliable than others.
Ethereum’s Layer 2 landscape has provided the most updates and tools for improvement, which is why the StarkNet collaboration aims to increase throughput and lower latency rates. With the help of blockchain protocols, Ethereum entered the spotlight this year, resulting in more transactions processed than Bitcoin. But is this a sign of Ethereum outperforming Bitcoin?
Let’s find out what the L2 StarkNet situation is about and how Ethereum’s protocols help drive progress in the crypto industry.
What are Layer 2 blockchain protocols?
Most blockchains have Layer 1 and Layer 2 solutions for scalability, privacy and such. These protocols found in Ethereum or Bitcoin merge perfectly to cover all challenges or issues. Layer 2 is the most important because it includes all categories necessary for the network to function, from state channels and side chains to optimistic and zero-knowledge rollups.
Ethereum makes the most out of these functions, and here’s how:
- State channels allow for multiple transactions to be completed;
- Sidechains enable interaction between different blockchains;
- Optimistic rollups permit smart contract execution off-chain;
- Zero-knowledge rollups verify numerous transactions in a batch;
What is StarkNet?
StarkNet is a revolutionary permissionless decentralized Layer 2 blockchain solution that works through zero-knowledge rollups. It can execute transactions and transfer data on the Ethereum mainnet. StarkNet provides all tutorials and knowledge for starting developers who want to build apps and tools, which helps create a connected community, such as the case with Ethereum.
Other similar Layer 2 solutions include Polygon ZK EVM, which has recently been released on the market to be used by developers. At the same time, ZKSync is a network solution on the way, as it is currently under testing.
How does StarkNet bring innovation to Ethereum?
The StarkNet protocol allows the compression of transactions more quickly compared to previous solutions to reduce the amount of energy required and the pressure on the blockchain while ensuring security and privacy. StarkNet also works with the help of DeFi, such as Immutable X, to process around six million transactions weekly, considerably more than Bitcoin can currently do.
The protocol has also released its token to combine the benefits of a utility and governance asset. This means users will be able to use the STARK coin for staking, data solutions and protocol referendums and as a way to pay gas fees. StarkNet also has a programming language called Cairo, similar to Ethereum’s Solidity systems, since it ensures a higher security grade.
StarkNet v0.12.0 brings new improvements
The next stage of StarkNet comes this year. The decentralized solution aims for the complete performance of various platforms and services that operate in the Ethereum ecosystem. Among other objectives, StarkNet wants to achieve an increased number of transactions per second (TPS) while the gas costs are kept to a minimum.
The Layer-2 scaling solution wishes to provide the best environment for builders and developers to increase their throughput and boost Ethereum’s computational abilities. This is why Cairo was made as open source, to facilitate the development of DApps. The final step is processing ten times the throughput of Ethereum at the 10th of the cost.
The upcoming updates arrive after important feedback from developers regarding the delays in transaction processing. Another issue that is to be fixed outlines the cost of storing data on Ethereum’s mainnet. Plus, a new type of transaction might be introduced sooner or later this year that will carry large binary objects called blobs to ensure cheaper transactions.
Why is blockchain performance important to Ethereum?
Ethereum and Bitcoin have multiple similarities, and they can be used for investments, payments and transactions, but Ethereum was intended to provide different services and products from the start. Although inspired by Bitcoin’s white paper, Ethereum has introduced the concepts of smart contracts, DApps and DAOs to the mainstream, which has gained in popularity among multiple industries besides the crypto one.
Ethereum has the potential to become a worldwide tool that can revolutionize technology. Therefore, it has conducted many updates that would complete each other. For example, the most significant update was the Merge, which has achieved a high level of reduced energy consumption, making cryptocurrency greener and transitioning from PoW to PoS.
The problem with energy consumption in mining and other cryptocurrency-related activities has been broadly discussed recently. That’s because this technology is supposed to provide users with financial freedom and better services and not harm the environment since mining Bitcoin is the equivalent of energy consumed by an entire city.
What’s next for Ethereum?
Ethereum has shapeshifted since 2022; this year, too, it will leverage some incredible functions after the updates come together. Following the Merge, the Verge, Purge and Scourge will debut and complete the final update pack for Ethereum, at least for a while.
The Verge will deal with Verkle trees that aim to increase scalability, a continuing issue of the blockchain. This will make it possible for developers to store vast amounts of data to improve data-proof technology.
The Purge will decrease the chances of network congestion by getting rid of unused and unimportant historical data. At the same time, more transactions will be processed, with the expected output to be 100.000 TPS processed.
Finally, the Scourge is the last stage in Ethereum’s update program and will handle more minor issues to make the blockchain a more credible tool. Plus, the risk of centralization should be minimized within the Scourge upgrades.
Final thoughts on the StarkNet improvement
StarkNet, the Ethereum protocol, will make considerable improvements to the network this year, and we’re excited to see what changes this update will bring and how the blockchain will act. After the Merge, for example, energy consumption was reduced by 99.95%, a considerable improvement that made Ethereum sustainable. But now, it will become faster, cheaper and more productive.
Last Updated on by ritukhare