Economics

Ethereum L2

The calculations given are based on gas cost in ether (ETH) Layer 1, the native coin of Ethereum, although the Plenny-Dapp is deployed on Arbitrum One, a Layer 2 chain using Optimistic Rollups (ORU). This technology brings economic efficiency and allows decentralized applications to scale at a tiny fraction of L1 fees (i.e. at 50 to 250 times lower cost).

Rollups process transactions almost instantaneously, much faster than L1, with thousands of transactions per second. Still, such L2 transactions are secured over Ethereum L1 by aggregating data and using 2-way pegs and bridges. As ORUs are expected to operate with continuously decreasing fees, Plenny has the potential to maintain its functionalities at an efficient level and provide an attractive value proposition to users.

Ultimately, participating Lightning Nodes rely on paying low transaction fees to use the lightning services of Plenny. It is assumed that the cost efficiency of L2 will create an arbitrage effect in the medium to long term, making it profitable for Lightning Nodes to join Plenny to improve connectivity and increase channel capacity.