Blockchain Layer 2 refers to the systems or protocols that are built on the top of the blockchains, without modifying the foundation structure of the underlying blockchains. The main goal of these protocols is to solve the transaction throughput limitations faced by major blockchain networks. The term "Layer 2" refers to various solutions towards the scalability problem of blockchains that without changing their foundation design.
We introduce a trustless operator to process users’ transactions off-chain. It encrypts users’ transactions, sends them to the blockchain in batches and periodically. It also uses zero-knowledge proof to prove the validity of these transactions, without revealing any information about the transaction (transaction value and account balance).
The operator can view all users’ transaction records and monitor suspicious transactions, to prevent illegal money laundering and other related illegal activities.
Zero-knowledge proof guarantees that the operator can only submit valid transaction records and update the valid account balance, but users need to trust the operator that it would not reveal any private information.
The system operates in a periodic manner, and each epoch has a stage that allows users to exit, so users can exit at this stage.
Users need to interact with the operator when they send or receive token. During that interaction, they will obtain the proof that is used to withdraw their balance. When users need to withdraw, they can directly send this proof to the main chain.
A user sends his transaction in plaintext by a secure channel. The operator will encrypt the transaction and return it to the user for validation and authorization. After the user’s confirmation, the operator will record the encrypted transaction on the main chain before the end of the epoch.