Comparing Other Scalability Solutions
Comparing zkRollups
Let's compare Plasma Next with zkRollup, both of which are scaling solutions. zkRollup compresses transactions and posts them to Layer 1 along with Zero-Knowledge Proofs. In zkRollup, the on-chain cost is proportional to the number of transactions. Furthermore, for each on-chain transaction finalization, ZKP verification is required in the Ethereum Virtual Machine, consuming substantial gas fees. In contrast, Plasma Next incurs on-chain costs only for posting the Merkle root of bulk transfers, also known as airdrops. Since the Merkle tree root is just 32 bytes of data, the associated gas cost is significantly lower. Verification of ZKPs is deferred until withdrawal, significantly reducing the cost of on-chain finalization and enabling more frequent and quicker confirmations.
Comparing the Bitcoin Lightning Network
Comparing the Bitcoin Lightning Network with Plasma Next, both utilize payment channels as a scaling solution. The Lightning Network, similar to Plasma Next, offers rapid transaction confirmations. However, unlike Plasma Next, opening a payment channel on the Lightning Network necessitates an on-chain transaction. Additionally, users must continuously monitor Layer 1 to prevent fund loss. Conversely, Plasma Next facilitates the establishment of payment channels off-chain, eliminating the need for users to monitor Layer 1 except during use.
Developing applications such as Decentralized Exchanges (DEXs) on the Lightning Network presents several challenges. Conversely, Plasma Next allows for the definition of payment channel rules through smart contracts known as Zero-Knowledge Proof Timelock Contracts (ZKPTLC). Utilizing ZKPTLC enables the creation of a diverse range of applications on Plasma Next, including asset exchanges and atomic swaps between Plasma Next and other Layer 1 networks. This functionality significantly broadens the scope for innovative application development within the Plasma Next ecosystem.
The Limitations of Plasma Next
Plasma Next utilizes payment channels. Assets locked in a payment channel cannot be withdrawn until the channel is closed, which results in poorer capital efficiency compared to zkRollups. However, the capacity of the payment channel can be increased through airdrops, making it more capital efficient than the Lightning Network, which requires on-chain transactions for capacity increases. Additionally, Plasma Next offers programmability of payment channels through smart contracts, which is intended for peer-to-peer (P2P) transactions. This differs from the programmability required by decentralized applications (DApps) like Uniswap. Therefore, existing DApps cannot be directly ported to Plasma Next. Nonetheless, the significantly lower gas fees and faster confirmation times provided by Plasma Next make it highly valuable for developing applications on its platform.
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