Vitalik Buterin proposed a scheme for settlements between Ethereum’s Layer-2 solutions

The co-founder of the second-largest cryptocurrency, Vitalik Buterin, proposed a path for direct transactions between DeFi protocols using different Layer-2 solutions in the Ethereum network.

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A cross-L2 DEX solution that I proposed a few days ago that only requires one side to be smart contract-capable (the other side can just be a simple coin-sending-only rollup or plasma):https://t.co/kc65mkh37c

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— vitalik.eth (@VitalikButerin) March 4, 2021

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According to him, this would require one side of the transaction to have full smart-contract support, while the other side would only need the ability to send coins.

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Presently, L2 solutions cannot interoperate; users, to use protocols built on them, must use the mainnet.

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According to Buterin, this function could be provided by intermediaries who would hold accounts across different L2 solutions.

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The scheme looks as follows:

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1. The user hands the intermediary an asset together with instructions to move it from, for example, Rollup A to Rollup B for a small fee. Thereafter, he can submit a transaction to the intermediary in Rollup B with proof of the coin transfer, which will queue a withdrawal to his address.

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2. The transfer of funds is performed with a delay to batch transactions in Rollup A. Buterin emphasises that this step might not require a pause if the smart contract provides rules to increase the fee when the intermediary provides evidence that the time gap between proofs is small.

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3. The intermediary receives funds from the user in Rollup A and transfers this sum, minus the commission, from their account in Rollup B to the user’s address in Rollup B.

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Buterin argues that crediting funds to the user in Rollup B via smart contracts would reduce fraud risk. He notes that in the worst case, if the intermediary takes the fee and fails to execute the transaction, the user would have to source some funds in Rollup B to cover the fee and claim the assets from the contract.

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A limitation of the scheme could be the mediator’s modest capital, which would not allow guarantees of processing all transfer requests. However, users can assess whether the mediator’s contract in Rollup B holds sufficient funds.

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Messari analysts say that this Rollup technology will preserve Ethereum’s edge as it moves to ETH2, despite the emergence of new, promising alternatives.

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Polygon developers (formerly Matic Network) announced the creation, based on the second-largest cryptocurrency, network of secure Layer-2 solutions and autonomous sidechains.

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