Layer N Overview
The initial vision for Ethereum's smart contracts faced performance limitations, leading to restricted functionality and high fees. Other Layer 1 solutions failed to overcome these issues. Bridging between chains emerged as a potential solution, but that didn't solve the underlying scaling problems and also introduced significant vulnerabilities.
The crypto community is now converging on L2 solutions, but each additional L2 is it's own isolated instance, sacrificing on composability and without additional improvement features. Even proposed L3 solutions can't communicate efficiently.
Some rollup protocols have outlined visions for a shared environment, but the communication protocols proposed either exhibit significant latency or lack sufficient implementation details.
Layer N is the first solution to offer a shared environment for n-th rollups with hyperfast execution and near-instant messaging. Layer N's architecture enables products like exchange rollups that match centralized exchange speeds, smart contract rollups directly accessing exchange liquidity, efficient margining systems for collateral reuse across applications, and potential AI-based market-making rollups and sophisticated undercollateralized lending protocols. And this is just the beginning of the imaginable...
Layer N tackles these issues along three verticals: performance, throughput, and composability.
Layer N rollups are fully built in Rust for ground-up maximum performance. This is made possible by leveraging RiscZero for ZKFPs, which supports the RISC-V instruction set. Layer N only generates ZK proofs when necessary (i.e. in the event of validator fraud)—unlike typical zkrollups that require constant proof generation which is an extremely costly overhead. Event-driven usage of ZK proofs offer two key benefits: web2-like performance and shorter fraud-proof windows than traditional optimistic rollups.
Additionally, each Layer N rollup instance is tailored for specific purposes. For example, the orderbook rollup (Nord) is optimized for trading and mirrors the architecture of the world's leading financial exchanges. In contract, the EVM rollup (N-EVM) is optimized for smart contracts and seamless composability with other rollups. This specialization enables developers and teams to always find the right environment for their specific needs.
Another significant bottleneck that plagues rollups is the blockspace issue. Using Ethereum's blockspace to store rollup data drives transaction prices for rollups very high, rendering traditional rollups cost-inefficient. The growing competition for blockspace and the scarcity of available blockspace makes it impossible to migrate full complex applications like Coinbase or Binance fully onto Ethereum.
To address this challenge, Layer N leverages EigenDA, a novel solution providing megabytes of blockspace per second. What sets EigenDA apart from other off-chain DA solutions, is that the data continues to be secured by Ethereum validators through restaking, meaning the "off-chain DA risk" is mitigated. Unlike existing blockchains, which have fixed capacity regardless of the number of validators, EigenDA expands its capacity in tandem with the number of validators. This innovation effectively overcomes the conventional bandwidth constraints inherent to blockchains, enabling Layer N to scale horizontally and maintain significantly lower transaction fees.
Additionally, some Layer N rollups employ signature aggregation techniques that compress data by a factor of 8-10 times, resulting in even lower transaction fees. This further reduces Layer N's dependence on expensive blockspace.
The final key to making everything function seamlessly is a unified messaging layer that connects all rollup instances: the Inter-Rollup Communication protocol (IRC). IRC enables every rollup to seamlessly transmit messages to other rollups and instantly bridge liquidity. To the end user, it becomes imperceptible on which Layer N rollup they are operating on. They will be able to use applications without being concerned about the intricacies of bridging. IRC is powered by a shared sequencer. In essence, Layer N rollups submit their state updates to the same contract. As such, all Layer N rollups can be viewed as components of one aggregated state machine, unconstrained by computational limits or space restrictions.