Layer N, a decentralized network that aims to improve the scalability and performance of Ethereum, has raised $20 million in a Series A funding round led by Founders Fund, the venture capital firm founded by Peter Thiel. The funding round also saw participation from other prominent investors, such as Polychain Capital, Coinbase Ventures, Pantera Capital, and Framework Ventures.
Layer N is based on the concept of sharding, which divides the network into smaller and parallel shards that can process transactions faster and cheaper than the main chain. Layer N also supports cross-shard communication and cross-chain bridges, enabling seamless interaction between different shards and other blockchains.
Ethereum 2.0 is the upcoming upgrade of the Ethereum network, which also adopts sharding as a scalability solution. Ethereum 2.0 will consist of a main chain called the Beacon Chain, which coordinates the activity of 64 shards, and a set of execution layers, which run the smart contracts and state transitions. Ethereum 2.0 will also introduce proof-of-stake as a consensus mechanism, replacing the current proof-of-work system.
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How does Layer N compare to Ethereum 2.0? we will explore some of the similarities and differences between the two platforms and discuss their advantages and disadvantages for developers and users.
Similarities:
Both Layer N and Ethereum 2.0 use sharding as a way to increase the throughput and scalability of the network. Sharding allows parallel processing of transactions, reducing congestion and fees on the main chain.
Both Layer N and Ethereum 2.0 support cross-shard and cross-chain communication, enabling interoperability between different shards and other blockchains. This allows for more complex and diverse applications that can leverage the strengths of different platforms.
Both Layer N and Ethereum 2.0 are compatible with the Ethereum Virtual Machine (EVM), which means that existing smart contracts and tools can be easily ported to either platform. This lowers the entry barrier for developers and users who want to migrate or experiment with new platforms.
Differences:
Layer N uses a hybrid consensus model that combines proof-of-work and proof-of-stake, while Ethereum 2.0 uses pure proof-of-stake. Proof-of-work is a more secure but more energy-intensive way of validating transactions, while proof-of-stake is a more efficient but less decentralized way of reaching consensus. Layer N claims that its hybrid model offers the best of both worlds, balancing security and efficiency, while Ethereum 2.0 argues that proof-of-stake is sufficient for ensuring security and decentralization.
Layer N has a fixed number of shards (128), while Ethereum 2.0 has a variable number of shards (64 initially but can change dynamically). Layer N claims that its fixed sharding scheme simplifies the design and implementation of the platform, while Ethereum 2.0 claims that its variable sharding scheme allows for more flexibility and adaptability to changing network conditions.
Layer N has a native token called LYN, which is used for paying fees, staking and governance, while Ethereum 2.0 uses ETH as its native token for the same purposes. LYN is a new token that has to establish its value and utility in the market, while ETH is an established token that has a large and loyal user base.
Layer N is one of the projects that leverages the concept of rollups, a layer 2 solution that bundles multiple transactions into a single one and executes them on a sidechain, before settling them on the main Ethereum chain. This reduces the congestion and fees on the Ethereum network, which has been struggling to cope with the high demand from various applications, especially decentralized finance (DeFi) and non-fungible tokens (NFTs).
Layer N claims to offer a unique approach to rollups, by combining zero-knowledge proofs (ZKPs) and optimistic rollups. ZKPs are cryptographic techniques that allow users to prove the validity of their transactions without revealing any details, while optimistic rollups assume that transactions are valid unless someone challenges them. Layer N says that its hybrid solution can achieve higher throughput, lower latency, and better security than other rollup implementations.
Layer N also boasts a strong team of developers and researchers, who have contributed to various projects in the Ethereum ecosystem, such as Optimism, StarkWare, and zkSync. The team says that it plans to use the new funding to expand its team, launch its mainnet, and onboard more partners and users.
Founders Fund partner Brian Singerman said that he was impressed by Layer N’s vision and technology, and that he believes that layer 2 solutions are essential for the future of Ethereum.
“We are excited to back Layer N as they build a scalable and secure layer 2 network for Ethereum. Layer N’s hybrid approach to rollups is innovative and promising, and we think it will enable more developers and users to benefit from the power of Ethereum,” Singerman said.
Layer N co-founder and CEO Daniel Wang said that he was grateful for the support from Founders Fund and other investors, and that he hopes to make Ethereum more accessible and affordable for everyone.
“We are thrilled to have Founders Fund as our lead investor, as they share our vision of creating a more open and decentralized web. Layer N is committed to solving the scalability and usability challenges of Ethereum, and to bring the benefits of blockchain technology to the masses,” Wang said.
Layer N and Ethereum 2.0 are both ambitious projects that aim to bring blockchain technology to the next level. They share some common features, such as sharding and interoperability, but also have some distinct differences, such as consensus mechanism and sharding scheme. Depending on their preferences and needs, developers and users may choose one platform over the other, or use both platforms in conjunction. Ultimately, both platforms will contribute to the innovation and diversity of the blockchain ecosystem.