Ethereum’s Scalability Issues and the Underlying Layers

What is the scalability problem?

Ethereum's network processes more than other services, but the processing speed is about 15 to 30 TPS. This is very low compared to traditional payment systems such as credit cards (several thousand TPS), and it manifests itself as network delays and rising gas fees.

What is Layer 2 (lower layer)?

An effort to solve the scalability problem by linking an "auxiliary network layer" independent of Ethereum's main chain (Layer 1), executing transactions outside the main chain, and recording only the results in Layer 1.

A mechanism for conducting transactions between users outside the main chain

To solve Ethereum's scalability problems, the Raiden Network was created early on using a technology called state channels. Transactions such as payments are not carried out on Layer 1*1, but are batch processed on Layer 2 and only the resulting data is recorded on Layer 1.

In the Raiden Network, channels can only be opened between users. Off-chain*2 transactions are only approved if both parties participating in the channel agree and digitally sign them, making it relatively difficult for fraudulent transactions to occur, and transactions are fast because only two parties participate in the channel.