A Survey on Blockchain Scalability: From Hardware to Layer-Two Protocols

Despite the great success of blockchain systems in recent years, blockchains still struggle to provide the same level of latency and throughput as centralized financial systems. The core of this problem lies in the inefficiency of consensus protocols. In this paper, we provide a survey on recent efforts to improve the scalability of blockchains. We focus on layer-two protocols, such as payment channel networks and transaction rollups, which process computations off-chain and only use consensus for dispute resolution. Layer-two protocols are expected to process microtransactions with sub-second latency and reduced fees, allowing blockchains to scale. Much of this work addresses the open challenges of payment channel networks, such as payment routing, channel rebalancing, network design strategies, security and privacy, payment scheduling, congestion control, simulators, and support for light nodes. We also dedicate a section to the existing implementations of smart-contract-based transaction rollups. Our work systematizes the state-of-the-art layer-two protocols, paving the way for future advances.