The Ethereum ecosystem recently experienced an extraordinary surge in transactions per second (TPS). On June 16, data from onchain explorer revealed that Ethereum’s scaling networks, including both layer-2 (L2) and layer-3 (L3) solutions, collectively achieved a remarkable 245.87 TPS. This milestone translates to roughly 21.2 million transactions in a single day.
This notable increase was primarily driven by the performance of Xai, an emerging Ethereum L3 solution. The network’s token XAI is currently priced at $0.56 on Gate.io and it is assumed that with the latest record break, it will be subject to a positive change.
The emergence of XAI
Xai, an L3 solution developed by Offchain Labs—the creators of the Arbitrum One blockchain—focuses on gaming applications. Since June 12, Xai’s TPS has skyrocketed from a single transaction per day to an impressive 101.72 TPS by June 16. This performance has set new records for the highest daily TPS among Ethereum’s L2 and L3 solutions.
In doing so, Xai surpassed the previous TPS record held by Degen Chain from April. Following Xai’s lead, Base recorded 32.97 TPS, and Arbitrum marked 20.65 TPS as of June 16.
Despite these impressive TPS figures, Xai’s total value locked (TVL) remains modest at $1.33 million, significantly lower than Arbitrum One’s $17.78 billion and Base’s $7.54 billion.
Xai’s achievement underscores the crucial role L3 solutions play in enhancing Ethereum’s scalability. The advent of L3 technologies has sparked debates about their potential as essential components of blockchain infrastructure. Many experts believe L3 can significantly improve the scalability and efficiency of blockchain networks, facilitating the development of new decentralized applications (Dapps).
Layer-3 tech is critical
L3 technologies represent a significant advancement beyond the current layer-1 (L1) and L2 solutions. L1, the foundational blockchain layer like Ethereum, ensures basic security and decentralization. L2 solutions, operating atop L1, focus on scalability enhancements. L3 aims to further scale blockchain networks by anchoring them into L2 for security, potentially offering exponential scalability benefits.
In a 2022 blog post, Ethereum co-founder Vitalik Buterin discussed the promise of L3 technologies. He emphasized that while L2 is mainly for scaling, L3 offers customized functionality, such as privacy features. Buterin explained that L3 could take various forms, including specialized applications using different computation methods than the Ethereum Virtual Machine (EVM) or rollups optimized for specific data formats. He also highlighted validiums—systems that use SNARKs for computation verification but rely on trusted third parties for data availability—as a viable L3 approach.
However, some industry experts remain skeptical about L3’s impact. Marc Boiron, CEO of Polygon Labs, which is behind the L2 project Polygon, argues that L3 might divert value from Ethereum’s ecosystem to the L2s they build upon.
Despite differing opinions, the conversation around L3 technologies continues to be one of the most intriguing topics in the decentralized finance (DeFi) industry. As L3 solutions like Xai are still in their nascent stages, their long-term effectiveness and impact are yet to be fully determined. The industry will be closely monitoring how L3 solutions evolve and influence the future of Dapps and scalability.
XAI at a glance
Xai is a layer-3 (L3) scaling solution for the Ethereum blockchain, developed by Offchain Labs, the same team behind the well-known Arbitrum One blockchain. Designed to enhance the scalability of Ethereum, Xai primarily focuses on supporting gaming applications, providing a platform where high transaction throughput is essential. By leveraging L3 technology, Xai aims to offer improved performance, lower transaction costs, and enhanced user experiences for decentralized applications (Dapps) within the gaming sector.
At its core, Xai operates on top of existing layer-2 (L2) solutions, such as Arbitrum, to further enhance scalability. This hierarchical approach allows Xai to benefit from the security and decentralization of Ethereum (layer-1) while utilizing the scaling capabilities of L2 solutions. By anchoring into L2, Xai provides an additional layer of scalability, enabling it to handle a significantly higher number of transactions per second (TPS) compared to traditional L1 and L2 solutions alone.
The consensus mechanism employed by Xai is integral to its performance and security. Like many modern blockchain solutions, Xai utilizes a combination of techniques to ensure efficient and secure transaction processing. Specifically, Xai leverages rollup technology, which batches multiple transactions into a single proof that is then submitted to the underlying L2 chain. This method reduces the load on the Ethereum mainnet and allows for faster and cheaper transactions.
In addition to rollups, Xai may incorporate advanced cryptographic techniques such as zero-knowledge proofs (ZKPs) to enhance privacy and security. ZKPs enable the validation of transactions without revealing the underlying data, ensuring that user information remains confidential while maintaining the integrity of the blockchain. This blend of technologies ensures that Xai can offer a scalable, secure, and efficient solution for the high-demand environment of blockchain gaming.
Overall, Xai represents a significant step forward in Ethereum’s scalability journey. By focusing on layer-3 solutions and leveraging cutting-edge consensus mechanisms, Xai not only addresses current limitations in transaction throughput but also sets the stage for the development of more sophisticated and user-friendly Dapps, particularly in the gaming industry.
