Tezos Etherlink L2: A Successful Implementation of Smart Rollups

Tezos Smart Rollups is becoming a gold standard for Layer2 rollups as it offers unprecedented scalability, a 1M+ throughput benchmark, and a self-amending ecosystem that is also optimized for low-energy for computation. A successful implementation of Tezos smart rollups is Etherlink L2, which will be the focus of our article. Etherlink has recently been making waves with a series of accomplishments, next-gen offerings, and projects that showcase its rapid growth and solid foundation for the future. Let’s dive deeper into Etherlink Layer2 to highlight how it’s serving as the most feasible EVM-compatible Layer2.

Smart rollups represent a custom Layer2 scaling solution that is highly secured and fully interoperable with Layer1 Tezos blockchain. Tezos smart rollups are designed to simplify, secure, flexible, and massively scalable, and they support all kinds of projects, from a single-purpose dApp to an entire ecosystem built for general-purpose applications. Projects building with Tezos smart rollups will leverage the key benefits like finely-tuned decentralization, scalable, future-proof mechanism, and a 100% developer-friendly ecosystem. That’s just a brief; you’ll definitely want to learn more about Tezos Smart Rollups. Here’s a detailed guide that will explain end-to-end details about Tezos Smart Rollups and its benefits.

Tezos Smart Rollups and the Amazing Benefits They Bring To Custom Blockchain

Etherlink is a promising EVM-compatible Layer2 rollup built upon the Tezos Layer1 ecosystem and powered by Tezos Smart Rollup technology. The key motivation behind building Etherlink is to provide Ethereum-level experience to developers and users while also offering seamless integration with Ethereum’s existing tools and stack, such as wallets, indexers, SDKs, and frameworks. However, unlike Ethereum-based rollups, Etherlink has been integrated into Tezos L1 blockchain as ‘Enshrined’ Layer2 rollup. 

This means, Etherlink is a first-class citizens and its validation logic is built on the underlying Layer1 Tezos. This also means that the Layer1 protocol will provide an open-source, shared infrastructure for Etherlink (and other Tezos smart rollups), like logic for the refutation games, message inbox, and more. Tezos Ethelink is live on mainnet beta as of 15th May and it will soon be pushed to the final stage. 

As a successful implementation of Tezos Smart Rollups, Etherlink has been offering an edge over a lot of Layer2 rollups that are based on optimistic rollups technology. For this, Etherlink showcases unique offerings in terms of performance, security, interesting projects, key innovations, and overall ecosystem development. Here are some of the key parameters through which Etherlink’s success can be highlighted: 

Critical performance parameters like speed, low-cost transactions, and a high degree of decentralization have always been a hallmark of the Tezos Layer1. Now with Etherlink, EVM-based dApps can leverage all these benefits with a a little enhancement, such as:

• Fast, Fair, and Free L2- Etherlink works with a motto of being ‘Fast, Fair, and Free (Nearly)’ Layer2 Network, offering sub-second block time of less than 500ms, non-custodial setup, and an exteremely low transaction fee of $0.001.

• Cross-chain interoperability- With powerful interoperability layer like LayerZero and also through the Bifrost upgrade, Etherlink offers seamless cross-chain compatibility, allowing dApps to tap into liquidity and connectivity of various applications.

• Ethereum-compatibility- Etherlink allow for smooth deployment of all types of EVM codebase, enabling projects to migrate users and assets across different EVM networks with zero connectivity issues.

• True Decentralization- Backed by Tezos L1 and a non-custodial architecture, Etherlink allows users to retain complete ownership of their assets in a transparent, open, and permissionless network. 

Security is paramount for Etherlink Layer2, be it for the ecosystem’s decentralization, MEV, or bridge-related aspects; Etherlink ensures to offer cutting-edge security. Let’s understand this better:

• Auditing for Kernel and FA bridge: In their second edition of fortnightly wrap, Etherlink announced the successful completion of audit report for kernel and FA bridge through Spearbit DAO. This ensures users can engage with Etherlink confidently as it has now built a strong commitment to security, transparency, and quality for both the developers building on Etherlink and users needing to engage in cross-chain activities through the FA bridge.

• Decentralized sequencing- Etherlink offers a decentralized sequencer that uses state-of-the-art consensus to offer a top-class censorship resistance that avoids manipulations. To achieve this, Etherlink elects various sequencer operators that are distributed geographically and are accountable for ensuring security on Etherlink by avoiding the risk of single-party censorship. Also, the process of selecting these operators is completely transparent and democratic to maintain ethos of decentralization.

• MEV Protection: With decentralized sequencing, Etherlink offers 100% protection against maximal extractable value or MEV, making sure all the builders and users on the network are safe and confident to build risk-free applications.

• Community-led Governance: Similar to Tezos, Ettherlink implments a built-in on-chain governance mechanism that is accountable to propose, select, test, and release upgrades on Etherlink without needing any hardforks. This mechanism allows Etherlink to be self-amending, and also it empowers the Tezos bakers to participate in Etherlink’s security updates, kernel upgrades, and sequencer operations.

As per Messari’s Q3 Tezos report, Etherlink has seen around 200% surge in overall projects and activities, and it is set to onboard 100+ new projects.  Some of the most innovative dApps on Etherlink includes Openpad AI (crypto X AI), Baanx (Compliance), OnchainVision Labs (DeFi), Questflow (community), TaskOn (marketing), Renora (SaaS), Ladder (NFTs) and Superlend (DeFi).  All these projects Etherlink projects has been showcased as game-changing projects in Tezos Realm during Token2019 Week. 

The Etherlink DeFi and gaming ecosystem has seen robust expansion over the past few months. Here’re the statistics to justify this statement: 

• Major DeFi dApps like Transak, AscendEX, IguanaDEX, SupelendHQ, and LayerZero bridge are now deployed on Etherlink.

• Around $1 Million in assets have been bridged to Etherlink from Tezos L1 during mid of May.

• IguanaDEX with $1.05M TVL, alone accounts for more than $2 million trade volume on Etherlink, further strengthening protocol’s liquidity while supporting growth of Ethermint’s crypto economy.

• Also, Organic Growth launchpad is another dApp on Etherlink to contribute 122775K to Etherlink’s TVL.

• Etherlink spotted a 272% increase in network’s fee collected, which highlights the rapid DeFi adoption on Etherlink due to low fee and faster finality. 

Etherlink is already the home for innovative games like Bit Hotel, UPvsDOWN, Battlerise, and Degeneratives. Now, Etherlink is gearing up to take this gaming adoption to next-level as it has offered a grant for Sugar gaming– a popular gaming platform, having a track of 60M+ active players. Etherlink’s grant will allow Sugar Gaming to launch its play-to-earn game and interoperable NFTs on the – ecosystem, thereby attracting more players and generating higher revenue. As you can see in the below image, Etherlink is emerging as a leading Gaming ecosystem with more than 41% growth in Q3, 2024.

Source: Dapp Radar

Each upgrade on Etherlink’s protocol is intended to make the network more sustainable, highly scalable, and secure for dApp builders across the globe. Let’s look at some of the recent and most important upgrades rolled out on Etherlink. 

First, there’s Bifrost Network upgrade that Etherlink launched on 7th of November, 2024. This upgrade has brought a significant enhancement for Etherlink’ infrastructure through: 

• Extension in FA 2.1 token bridge.

• Significant improvement in transaction indexing.

• Reduced latency on compute-heavy RPCs for optimized network efficiency. 

All these allow Etherlink to serve as a full-fledged protocol to handle complex DeFi operations and accelerate its adoption. The Surge in DeFi activities that we discussed in the previous section is one of the impactful result of Bifrost upgrade. Going forward, the upgrade will offer major benefits to applications building on Ethermint. 

Also, there’s the integration of Tezos’ DAL (data availability layer) is one of the significant upgrades on Etherlink to maximize scalability, efficiency, and ensure cost-effectiveness. Through a peer-to-peer parallel data network, computation becomes cheaper, settlements are fast, and data is available easily for anyone to access. 

Besides these main upgrades, Etherlink is committed to offering upgrades to continuously improve the network’s performance, trustlessness, scaling, security, and all the important aspects. 

Etherlink adoption is happening on a rapid scale, showing an increase of 46% in the ecosystem-wide activities with more than 8.6M transactions (as of Q3, 24), 100+ projects in development, and $1.18M TVL. If we look at network-level details, Etherlink has around 18.49K daily transactions, 3,866.8K total transactions, 134.25K wallet addresses, and 1.765K total active contracts. After recent upgrades, project onboarding, and integrations, Etherlink is set to grow tremendously. 

Partnerships & integrations is one of the major factors that reflects Etherlink’s success as a Layer2 Ethereum scaling solution. Each integration on Etherlink is a testimony for its enhanced capabilities and the ease it offers to the projects building upon it. We’ve already discussed DeFi-focused integrations in the article. Now, let’s look at some of the other integrations that have happened recently on Etherlink:

• Nebula- Nebula; the powerful AI platform designed to write and read on all the EVM chain, is now available on Etherlink. This integration represents Etherlink’s fast adoption of Web3 AI to make its infra much more feasible. 

• Sequence- Etherlink has secured integration with Sequence, the best-in-class gaming web3 platform, providing game developers with hands-on tools to simplify the development of high-quality games. 

• Layerzero- The popular interoperability protocol, LayerZero, is now available on Etherlink, allowing USDT to be bridged to & from Etherlink through any LayeZero-compatible bridge, including the EVM bridge on Etherlink. 

• Rariable- In a strategic integration, Rariable; the prominent NFT marketplace has added support for Etherlink for seamless NFT trading and primary drops.

• Transak– Etherlink has integrated Transak to amplify the Web3 experience for everyone on the platform, allowing them to manage their digital assets through cutting-edge Web3-powered payment solutions that support 170+ cryptocurrencies in over 160 countries. 

Etherlink’s unstoppable achievements and outstanding growth are inspiring for a lot of projects that seek to leverage next-gen like increased throughput, low latency, and high-staked security from their own single-use or general-purpose rollup Layer2s. Knowing this, Zeeve RaaS is offering a powerful and low-code rollup deployment and Tezos Smart Rollups management platform for Tezos Smart Rollups. With Zeeve RaaS, you can launch your L2 smart rollup at up to 60% less cost and 97% time-to-market. Also, you can use Zeeve’s DIY Sandbox tool to set up a production-ready testnet with 40+ integration and configuration options. 

For more information about Zeeve RaaS or our offering for OP Stack, Arbitrum Orbit, ZK Stack, or Polygon CDK– feel free to consult our experts. You can send your queries via mail or schedule a one-to-one call for a detailed discussion.