Ethereum’s rollups have been used as airlines and superhighways to speed transactions within the ecosystem and solve congestion problems. However, the reality has not quite come true as many rollup enthusiasts had predicted.
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A Huobi Research Report looked at by Barry Jiang at some issues with rollups that may be behind their slow adoption rate and relatively small total value [TVL] parts. An important factor, it found, is an unsatisfactory user experience. The less-than-ideal transaction costs and long time frame required to complete payouts are likely to make users anxious when dealing with volatile assets.
Jiang also mentioned security risks and a lack of interoperability between rollups.
The report continued with stands†
“By a rough estimate of publicly released addresses from multiple Rollup blockchain browsers, there are 1 million Rollup addresses, compared to 185 million addresses on Ethereum (less than 1%).”
It is also worth noting that other blockchains seem to offer cheaper options.
Source: Huobi research
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Some of the solutions suggested in Huobi Research’s report include improving the overall user experience to increase rollup adoption. It suggested increasing bridge speeds, reducing costs and making the system more decentralized for security reasons. However, the report also suggested a dAMM or an L2 mock exchange to facilitate the transaction process.
Huobi research added†
“Several projects, including Arbitrum, Optimism, Metis and StarkEX, etc., have proposed a working target for decentralization in their roadmaps or white papers. Besieged by all manner of Layer 1 chains, Rollup has no excuse not to approach decentralization.”
In addition, more bridges and links between rollups could improve interoperability. This, in turn, can make the user experience more enjoyable.
“In addition, cross-chain bridges can enhance interoperability between Rollups. The greater the capital volume flows on Rollup, the wider the bridges between Rollups are and the smoother the transaction is for assets to cross-chain.”
On the other hand, Ethereum’s falling gas rates must be taken into account. The sudden drop in prices could further hurt roll-up adoption if a significant number of users decide to return to the mainnet, driving costs up again.
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While the TVL of rollups has recovered strongly since the low of the late January 2022 crash, the total TVL is still a long way from its early 2022 highs of $6.8 billion.
In addition, Arbitrum, with a TVL of $2.86 billion, is down 4.58% in the past seven days.
Source: L2Beat