Withdrawals will be smoothed over a period of weeks to months due to Ethereum’s queuing mechanisms, in addition to the various lags that Ethereum staking service providers require to integrate support for withdrawals.

Layer 2 solutions

Currently, there are three types of mainstream scaling solutions on Ethereum: state channels, plasma, and rollups.

The Lightning Network on Bitcoin, the first blockchain scaling solution, was built in 2017. Since then developers have proposed an increasing number of scaling solutions, including rollups, the primary scaling solution for Ethereum today, which were deployed on chain in late 2020 and early 2021.

A Decentralized Autonomous Organization (DAO) on Ethereum, for example, may allow its members to vote on L2 to save money while processing large transactions on L1 to utilize its full security and market liquidity.

In addition to speed, L2s establish a cost and security spectrum of decentralized computation environments which applications with innovative data processing needs may select from.

Simply put, L2 is analogous to the concept of batch-processing transactions in traditional banking, where payments are not settled immediately on the root chain (L1) to increase processing efficiency.

New blockchains must have higher TPS if we wish to maintain decentralization while enabling cheaper gas fees, to make them more accessible to a global user base, and this is where Layer 2 scaling solutions (L2) come into play.

Networks with higher TPS will charge less gas fees per transaction, because fees are split between more users.

Networks with a higher degree of decentralization charge more for gas as they require more validators.

Users pay gas fees to use blockchain infrastructures, and these fees go toward paying each validator who works to incorporate new information into the blockchain.