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olgahryniuk authored Jul 31, 2023
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Expand Up @@ -153,7 +153,7 @@ An additional, off-chain protocol that works on top of the layer 1 blockchain. P

**Sidechains**

Although sidechains are not layer 2s, they are defined as a way to enable multiple blockchains to communicate with each other and have one react to events in the other, is a separate blockchain connected to a main blockchain (the 'main' chain, also known as parent chain), through a two-way mechanism (the 'bridge') that enables tokens and other digital assets from one chain to be used in another and results returned to the original chain. Assets can be moved between chains as needed. One single parent chain can have multiple interoperable sidechains connected to it, which may operate in completely different ways. EVM sidechains on Cardano include [dcSpark’s Milkomeda](https://www.milkomeda.com/) and [IOG’s EVM sidechain project.](https://iohk.io/en/blog/posts/2022/07/06/introducing-the-cardano-evm-sidechain/)
Although sidechains are not layer 2 solutions, they are defined as a way to enable multiple blockchains to communicate with each other and have one react to events in the other, is a separate blockchain connected to a main blockchain (the 'main' chain, also known as parent chain), through a two-way mechanism (the 'bridge') that enables tokens and other digital assets from one chain to be used in another and results returned to the original chain. Assets can be moved between chains as needed. One single parent chain can have multiple interoperable sidechains connected to it, which may operate in completely different ways. EVM sidechains on Cardano include [dcSpark’s Milkomeda](https://www.milkomeda.com/) and [IOG’s EVM sidechain project.](https://iohk.io/en/blog/posts/2022/07/06/introducing-the-cardano-evm-sidechain/)

**Hydra**

Expand All @@ -165,11 +165,11 @@ Furthermore, Hydra Head introduces the concept of [isomorphic state channels](ht

Hydra Heads excel in achieving near-instant finality within a Head. The process of setting up and closing a Head can take a few blocks, but once established, transactions can flow rapidly across collaborative participants. Since Hydra Heads are isomorphic and also use the EUTXO model, they can process non-conflicting transactions concurrently, which – coupled with good networking – allows for optimal use of the available resources. 

**Rollups and Validiums**
**Rollups and validiums**

Rollups work by converting L1 execution cost (running a smart contract on the L1) into L1 data cost (storing the data on the L1). Since data is much cheaper than execution, L2 systems typically achieves much lower transaction costs while still inheriting the decentralization and safety of the underlying L1 as all data required to reconstruct the L2 state is embedded into the underlying chain. Rollups are often paired with a system to cheaply prove the current L2 state to the underlying L1, typically with fraud proofs ("optimistic rollups") or validity proofs ("zk rollups"). However, this is not a requirement, as "sovereign rollups" often contain no such proof. An example of a framework for creating rollups in the Cardano ecosystem is [Paima Engine](https://paimastudios.com/), which settles to [dcSpark’s Milkomeda](https://www.milkomeda.com/), as well as is capable of monitoring certain properties such as NFT ownership changes in the Cardano L1.
Rollups work by converting the layer 1 execution cost (running a smart contract on layer 1) into a layer 1 data cost (storing the data on layer 1). Since data is much cheaper than execution, layer 2 systems typically achieve much lower transaction costs while still inheriting the decentralization and safety of the underlying layer 1 as all data required to reconstruct the layer 2 state is embedded into the underlying chain. Rollups are often paired with a system to cheaply prove the current layer 2 state to the underlying layer 1, typically with fraud proofs ('optimistic rollups') or validity proofs ('ZK rollups'). However, this is not a requirement, as 'sovereign rollups' often contain no such proof. An example of a framework for creating rollups in the Cardano ecosystem is [Paima Engine](https://paimastudios.com/), which settles to [dcSpark’s Milkomeda](https://www.milkomeda.com/), as well as is capable of monitoring certain properties such as NFT ownership changes in the Cardano layer 1.

Sometimes, instead of storing the entire data on the L1, only hashes of the L2 data are stored on the L1. These are called "Validiums". They are much cheaper, but often require being paired with another storage solution to retrieve the full data (the "pre-image") of the hash (such a storage solution is often called a "data availability layer").
Sometimes, instead of storing the entire data on layer 1, only hashes of the layer 2 data are stored on layer 1. These are called 'validiums'. Validiums are much cheaper but often require being paired with another storage solution to retrieve the full data ('pre-image') of the hash (such a storage solution is often called a 'data availability layer').

# Other scalability solutions

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