In 2021, Ethereum’s layer 2 debuted as an optimal solution for the network’s intractable problems including high fees and slow transaction speeds. Now, when The Merge is going to take effect in the last parts of 2022, people might concern about the real interrelation between it and the former solution for Ethererum. Both seem to complete the same mission, but why do we need 2 solutions for a problem? Is it really necessary to have both The Merge and Layer 2 scaling solutions? How Layer 2 benefits from and affect The Merge? Let’s find out on <a href="https://www.builder.news/" alt="Builder.news" title="Builder.news" target="_blank" rel="" class="">Builder.news</a>.<img src="https://cdn.builder.news/news/11ed28f9a1b59762a8e6023f659fee92.jpg" alt="Layer 2 after The Merge" title="Layer 2 after The Merge" width="600" height="400" class="lykafe0"><h2>Distinguish Layer 2 and The Merge</h2><h3>What is Layer 2 scaling solution?</h3>The simplest definition of "layer" is "layer." Our recognized mainstream public chains, like Bitcoin and Ethereum, fall under the categorization of Layer 1.We are all aware that many large-scale applications cannot be deployed in the Ethereum network owing to its massive congestion and prohibitively expensive transaction fees. For instance, the handling cost in the DeFi in prior years may have been hundreds of dollars, which was extremely disadvantageous for users. Therefore, the idea of Layer 2 - a comprehensive solution aimed at enhancing the performance of the Ethereum network "outside the chain" - was conceived in order to tackle the performance issue of the Ethereum network on the basis of the Ethereum main network. In detail, by shifting some of Ethereum's data processing to Layer 2, Layer 2 processes data in a way that lessens the stress on Ethereum and improves the scalability of the whole Ethereum network. Currently, there are commonly-mentioned solutions from Layer 2 such as Rollups, Plasma along with respectively notable protocols like <a href="https://www.builder.news/project-review/optimism-op-a-layer2-scaling-solution-for-ethereum-applications" alt="Optimism (OP) - A Layer-2 scaling solution for Ethereum applications" title="Optimism (OP) - A Layer-2 scaling solution for Ethereum applications" target="_blank" rel="" class="">Optimism</a> or Arbitrum.<img src="https://cdn.builder.news/news/11ed28f9a1b59e68a8e6023f659fee92.jpg" alt="Layer 2 scaling solutions" title="Layer 2 scaling solutions" width="600" height="450" class="lykafe1">&gt;&gt;&gt; Read more:&nbsp;<a href="https://www.builder.news/crypto-insights/top-layer2-projects-to-invest" alt="Top layer-2 projects to invest" title="Top layer-2 projects to invest" target="_blank" rel="" class="">Top layer-2 projects to invest in</a>.<h3>What is The Merge?</h3>As the already-known problems users experiencing in Ethereum network under proof-of-work consensus, The Merge means when the present Ethereum mainnet proof-of-work (PoW) protocol "merges" with the Beacon Chain proof-of-stake (PoS) blockchain technology, it will remain as PoS. <a href="https://www.builder.news/crypto-insights/the-merge-a-pivotal-event-for-ethereum" alt="the merge" title="The Merge: A pivotal event for Ethereum" target="_blank" rel="" class="">The upgrade in Ethereum</a> is expected to create a space with more scalability, security, and sustainability. In other words, there will be less demand for Layer 2 from consumers if Ethereum switches to PoS consensus, accomplishing its objectives of lowering transaction costs and scaling network performance. Additionally, switching to PoS may strengthen the network security protocols, according to Vitalik Buterin, PoS can provide Ethereum with “More efficiency, better ability to handle and recover from attacks.”As such, with the aim to improve the ability to handle more speedy and low-cost transactions, The Merge and Ethereum Layer 2 seem to overlap one another’s mission.&gt;&gt;&gt; Read more:&nbsp;<a href="https://www.builder.news/crypto-insights/misconceptions-about-the-merge" alt="Unveil misconceptions about the Merge" title="Unveil misconceptions about the Merge" target="_blank" rel="" class="">Unveil misconceptions about the Merge</a>However, since Layer 2 solution was introduced to the market as an optimal solution to the problems, The Merge, which is set to take effect in the middle of September, will likely make Layer 2 solutions become less handy, won’t it? It is too early to conclude if Layer 2 solutions are becoming outdated and not in demand when there’s the Merge that is even more advanced.<img src="https://cdn.builder.news/news/11ed28f9a1b5a32ca8e6023f659fee92.jpg" alt="Ethereum The Merge" title="Ethereum The Merge" width="600" height="400" class="lykafe2"> <h2>In what way, Layer 2 and The Merge interact with each other?</h2><h3>Layer 2 benefits from The Merge</h3>If we look back at the roots of the 2 Ethereum solutions, we will understand their importance to one another. In fact, Layer 2 solution will directly benefit after the Merge has successfully “merged” from PoW to PoS. The base of The Merge is developed on Layer 1 which is also the background of the Layer 2 advancement. Once The Merge successfully settles down or Layer 1 is enhanced to a higher level, Layer 2 will inherit what is called “wonders” after upgrading. The idea is agreed upon by the CEO and Founder of Boba Network - a Layer 2 scaling solution, Alan Chiu. “As Ethereum L1 becomes more efficient, L2s will simply become even more efficient while preserving their existing added benefits.” The viewpoint is also further explained by Harold Hyatt, Trusttoken’s Product Manager of DAO &amp; DeFi. He took Optimism as an illustration. “If Optimism is ten times faster than L1, Ethereum will be ten times quicker after sharding, and Optimism will be 100 times faster.”&gt;&gt;&gt; Relevant article:&nbsp;<a href="https://www.builder.news/crypto-insights/guide-to-evaluate-layer-1-platforms-dhANJ" alt="An Ultimate Guide To Evaluate Layer 1 Platforms" title="An Ultimate Guide To Evaluate Layer 1 Platforms" target="_blank" rel="" class="">An Ultimate Guide To Evaluate Layer 1 Platforms</a><img src="https://cdn.builder.news/news/11ed28f9a1b5a70aa8e6023f659fee92.jpg" alt="Layer 2 and The Merge" title="Layer 2 and The Merge" width="600" height="400" class="lykafe3"><h3>Layer 2 is the not only advantage taker</h3><a href="https://www.builder.news/crypto-insights/layer-2-scaling-solutions" alt="Layer 2 scaling solutions - What you need to know" title="Layer 2 scaling solutions - What you need to know" target="_blank" rel="" class="">Layer 2 solutions</a> are believed to be significant contributors to Ethereum’s mainstream adoption after the Merge. Ahmed Al-Balaghi, the co-founder of multi-chain relay protocol Biconomy, once explained that Ethereum would still be in need of Layer 2 as a solution before reaching mainstream adoption. “Even after the merger, to truly gain mainstream adoption, Ethereum still needs as many scaling solutions as possible. It is growing in popularity, but has a long way to go before mainstream adoption, with only 4% of the world’s population owning crypto assets this year.”The need for networks like Ethereum will rise exponentially as adoption rises. Poapster, a supporter of the top DeFi protocol Harvest Finance, shares the same opinion.<blockquote class="">“We’re going to see Ethereum become the universal settlement layer and all the different Layer2 and EVM compatible chains are going to be where small transactions happen.”Poapsterfrom Harvest Finance</blockquote>As a result, there is a tendency to think that Layer 2 will play a significant part in the development of the Ethereum network. The co-founder of the money market protocol zkLend, Brian Fu, is quite hopeful about layer2's future.<blockquote class="">“The Layer2 ecosystem has reached a tipping point to support transaction volume and activity, which will lead to explosive network effects…Users have started to switch to Layer2, as we’ve seen with Layer2’s lock-up value growth.”Brian FuzkLend Co-Founder</blockquote>Moreover, Layer2 also supports increasing dApp usage. Increased network involvement will be closely correlated with the adoption of dApps. Everyone can control their assets, identities, and money without the interference of a centralized authority thanks to a decentralized blockchain network that is scalable and supports quick transactions.<blockquote class="">“The merger will bring us one step closer to the shard chain. As shards are deployed, we expect Ethereum’s improved scalability and capacity to reduce costs and increase the accessibility of decentralized applications (dApps).”Pufffrom Iron Bank</blockquote><h2>Bottom lines</h2>It is indisputable that The Merge will be even more optimal cause it is a newer-born child. In the meantime, we cannot deny the effectiveness of Layer 2 in the scalability Ethereum network recently. It has made the transactions far more time- and cost-saving than ever before. After all, both updates are there for satisfying the user’s needs. We, as end users, will be the ones who take advantage the most.However, since The Merge is not launched yet, all we have heard about it is just based on developers’ words. Therefore, what we have thought right now might just be assumptions about the real effectiveness of The Merge and its impacts on surroundings. <div class="pr-block-special">Disclaimer: This article is intended for and only to be used for reference purposes only. No such information provided constitutes advice or a recommendation that any investment or trading strategy is suitable for any specific name.</div>

How Layer 2 benefits from and affect The Merge?

Where will Layer 2 solutions be after The Merge?