This bottleneck leads to scaling limitations involving high transaction fees and network congestion during periods of high on-chain activity. Various solutions have been proposed or activated in order to resolve this issue, some of them more controversial than others.
Moving transactions off-chain have been a popular proposal to solve the scalability problem. Several projects are striving to unload the pressure from the Bitcoin blockchain. The Lightning Network and Blockstream’s Liquid Network have gained the most traction among the designated off-chain solutions. However, amidst the growth of decentralized finance, a third unexpected platform has taken a significant share of the off-chain market; The Ethereum Network.
In this mini report we provide a quick overview of the recent development in the exciting off-chain space.