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Everything about Layer 2s and Ethereum Alternatives

XVIX

Feb 5·4 min read

Since beginning work on XVIX two months ago, we’ve spent ~14.23 ETH on deploying contracts and sending transactions. We’ve also gotten feedback about how the high costs of Ethereum transactions have affected usage of the X2 leverage platform.

In search of a solution, we looked into multiple Layer 2 solutions and Ethereum alternatives, some things we took note of:

  • The state of decentralization
  • The user experience
  • Ecosystem projects and their adoption

Avalanche

  • Avalanche
  • 807 Validators
  • Total staked: ~259 million AVAX, ~4.1 billion USD
  • Block time: < 5 Seconds (Contract Chain)
  • Transaction fee: 0.05648366 AVAX, ~0.91 USD

Note: New blocks on the Contract Chain are only created when there are new transactions, this may result in the explorer showing a higher value for the block time.

  • Add the Avalanche network configuration on Metamask
  • Switch Metamask to connect to the Avalanche network
  • To use Avalanche, you will need some AVAX as gas, you can withdraw AVAX to your address using an exchange or use the bridge on Zero Exchange
  • Depositing assets to Avalanche requires two transactions, one on Ethereum and then another on Avalanche
  • After funding your account, using AVAX dApps is similar to using dApps on Ethereum
  • Withdrawing assets similar requires two transactions, one on Avalanche and another on Ethereum

Developing on Avalanche is very similar to developing on Ethereum, tools like HardHat should work with some minor configuration.

Binance Smart Chain

  • Add the Binance Smart Chain network configuration on Metamask
  • Switch Metamask to connect to the BSC network
  • To use BSC, you will need some BNB as gas, there are two main ways to get BNB into your BSC account
  • Buy BNB on Binance Exchange, then withdraw BNB from Binance to your Metamask address
  • Use the BSC bridge to deposit assets like ETH / BTC / DOT, you are supposed to be able to purchase some BNB using the bridge, but I could not find this option when I tried it
  • After funding your account, using BSC dApps is similar to using dApps on Ethereum
  • Withdrawals can be done using the BSC bridge

Developing on BSC is very similar to developing on Ethereum, tools like HardHat should work with some minor configuration.

  • PancakeSwap: AMM Exchange, Market cap of ~300 million USD
  • Cream: Lending, Market cap of ~170 million USD
  • Venus: Lending / Stablecoin, Market cap of ~127 million USD

PancakeSwap: ~389 million USD of liquidity, 24 hours volume of ~142 million USD

Optimism

  • Optimistic Rollup
  • Confirmation time: 0.3 Seconds
  • Transaction fee: ~0.7% the cost of an Ethereum transaction
  • This is based on the experience of using the Synthetix migration dapp
  • No switching of networks in Metamask is required
  • One transaction to approve and another transaction to deposit, both transactions were on Ethereum and required ETH fees
  • The explorer looks a bit rough currently and doesn’t show contract interaction details
  • Withdrawals to Ethereum L1 will require 1 week to process unless there is a liquidity bridge for it

Developing on Optimism has some small differences compared to developing on Ethereum as certain functionality such as timestamps and contract constructors differ slightly in behaviour.

Since Optimism uses an OVM (Optimistic Virtual Machine) instead of an EVM (Ethereum Virtual Machine), certain tools such as Etherscan are not yet compatible.

  • Uniswap: AMM Exchange, Market cap of ~5.8 billion USD
  • Synthetix: Synthetic Exchange, Market cap of ~3 billion USD

xDai

  • Add the xDai network configuration on Metamask
  • Switch Metamask to connect to the xDai network
  • To use xDai, you will need some xDai as gas, you can use the xDai bridge for this, depositing requires one Ethereum transaction
  • After funding your account, using xDai dApps is similar to using dApps on Ethereum

Developing on xDai is very similar to developing on Ethereum, tools like HardHat should work with some minor configuration.

Honeyswap: ~3.2 million USD of liquidity, 24 hours volume of ~471,000 USD

Thoughts

The experience on the Layer 2s and Ethereum alternatives was smooth once Metamask was setup and funds were deposited.

Having to switch between networks on Metamask was not a great experience for deposits and withdrawals. The exception to this was Optimism which did not require setting up a new network in Metamask. The only drawback of Optimism at this point was the block explorer and the 1 week delay for withdrawals.

Aside from Optimism, Binance’s bridge was the easiest to use of the different solutions for both deposits and withdrawals.

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XVIX

XVIX is a token that absorbs value from volatility. https://xvix.finance/

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