Here’s how Hemi’s Proof-of-Proof stacks up against other L2 solutions.

Hemi uses Proof-of-Proof (PoP), a consensus mechanism rooted in Bitcoin’s finality. This imparts robust security to Hemi and sets it apart from other Layer 2 blockchains. So, how does the PoP model differ from other consensus mechanisms?

First, we should examine existing Layer 2 consensus mechanisms and their potential limitations to understand this. Current models, such as Rollups, Sidechains, and Payment Channels each take unique approaches to achieving consensus while balancing for scalability and efficiency. However, they often make trade-offs that impact security, decentralization, or network availability.

Legacy Layer 2 Chains Types

Using Bitcoin or Ethereum blockchains often results in high settlement fees, particularly during peak network use. To overcome the limitations of their base layers, Layer 2 solutions emerged some aligned with Ethereum, and some with Bitcoin.

Rollups

What are Rollups? Rollups started in the Ethereum world as a method for scaling blockchains while still keeping decentralization and security intact. They work as Layer 2 systems by grouping many transactions together and sending a proof of those transactions to a Layer 1 blockchain like Ethereum. The L1 chain acts as the secure base, and the L2 rollup handles the heavy lifting—computation and storage—off-chain.

Rollups predominately occur in the Ethereum ecosystem, although the premise may be applied to other style chains. They leverage the security of the Layer 1 chain, thus inheriting that network’s decentralization, and post transaction data proofs to their parent network for immutability. Some examples of Rollups include and their consensus mechanisms:

Optimistic Rollups—These rely on a consensus mechanism that assumes all off-chain transactions are valid unless proven otherwise. Transactions are aggregated and executed off the L1 chain, with updates summarized and posted to the parent chain. 

This approach sacrifices rapid finality by relying on fraud-proof systems to maintain transaction validity. Validators typically have seven days to dispute or challenge transactions, ensuring correctness but delaying finality until the dispute window closes. While this reduces the computational load on the main chain and improves scalability, the added latency can impact the end-user experience. Further, the burden falls on users to ensure critical transactions are valid and that there is an additional incentive layer for challenges to identify and flag bad transactions. 

ZK Rollups—These use zero-knowledge proofs to validate off-chain transactions while inheriting the security of the parent layer. Aggregated transactions are executed off-chain, and cryptographic validity proofs are generated to ensure compliance with network rules. These proofs are then posted directly on the Layer 1 chain, reducing validity windows while preserving user data privacy.

Although ZK Rollups offer near-instant finality and strong security, their high computation costs, introduce development and operational complexity, which has somewhat dampened their adoption.

Sidechains

Sidechains operate in parallel to the Layer 1 network, be it Bitcoin or Ethereum, but rather than inheriting its security, they operate with their own consensus mechanism, which may differ from that of a Layer 1. Designed to be interoperable with the parent network, sidechains offload transactions and allow assets to be seamlessly transferred via a bridge. This method enables faster transactions with reduced fees.

However, sidechains can introduce risks, since their security relies on a separate validator network than the Layer 1 chain, often with a smaller and less decentralized participant pool. Sidechains also depend on the security of their bridge infrastructure, which can be a critical point of vulnerability.

Payment Channels

Payment Channels offer low-cost transactions between two parties and operate off-chain, with funds locked in a multisig wallet, or smart contract. They can work for either Bitcoin or Ethereum. In this setup, participants can sign and update the channel’s state without broadcasting transactions to the Layer 1 blockchain. Upon closing the channel, the state of finality is broadcast to the blockchain, typically with a 24-48 hour dispute period, though some architectures allow for customizable time ranges. With their direction connections, Payment Channels are ideal for high-frequency, low-value transactions, such as micropayments.

However, because they necessitate a direct connection between participants, payment channels are limited to a narrow scope of use cases and are insufficient for interface with more complex applications. Furthermore, updating the state requires both parties to be online and available, often proving impractical. Closing the channel can introduce additional costs, particularly in the event of a dispute.

State Channels

Similar to Payment Channels, State Channels also facilitate off-chain interaction between participants for a wide variety of transactions or operations. Their complex behavior means they are incompatible with Bitcoin due to the computational limitations of Bitcoin’s script language. However, for ecosystems that support smart contracts a wider array of information beyond cryptocurrency balances can be locked in a State Channel. This enables activities like gaming, decentralized governance, and off-chain computations. Once again, the state is locked in a multisig contract where participants agree on state changes.

As would be expected, State Channels also suffer similar drawbacks to Payment Channels. They rely on all participants being available during interactions, which can be a limitation. Since they are best suited for recurring interactions between fixed parties, their use cases are inherently limited.

Plasma

Plasma is a Layer 2 solution that uses a Layer 1 network, such as Ethereum, to create semi-independent anchored child chains. Such child chains operate by processing transactions off-chain and occasionally submitting data summaries to the first layer. Plasma child chains are capable of supporting an independent consensus mechanism from the blockchain from which they sprout. However, the anchoring end-points in the Layer 1 network play a role in enforcing the validity of the child chain’s state at each check-in by enabling the creation and verification of cryptographic proofs. 

If fraudulent behavior is detected at check-in, the invalid transactions or manipulated state may be disputed with a fraud-proof containing evidence that the state is incorrect during a challenge window, typically between 7 to 14 days.

Plasma is well-suited for transfers and payments but struggles to support general-purpose smart contracts. Meanwhile, its complex exit mechanisms force users to monitor the chain and act within specific timeframes for secure fund withdrawal.

What is Missing From Layer 2?

What these network solutions lack is a unified environment that seamlessly supports both Bitcoin and Ethereum ecosystems. Where Payment Channels and Plasma focus on specific blockchains, Rollups and State Channels remain largely confined to Ethereum’s ecosystem due to its programmability. Sidechains are an attempt to bring together these worlds, but their reliance on smaller validator pools and bridge infrastructure raises security concerns.

This lack of interoperability holds networks back from leveraging Bitcoin’s deep liquidity and unmatched security with Ethereum’s flexibility. An environment that harmonizes these two ecosystems could address the limitations inherent in siloed Layer 2 networks.

Bitcoin and Ethereum Unite Through Proof-of-Proof

Hemi uses PoP, a hybrid consensus mechanism that leverages the security of an existing blockchain, such as Bitcoin, to secure its network. The consensus, block production, and network security coordination on Hemi are facilitated by the Hemi Blockchain Kit (hBK), which serves as the core protocol layer managing the network’s foundational operations. 

Hemi also employs sovereign decentralized tunnels for asset movement, allowing users to transfer assets between Bitcoin, Ethereum, and Hemi without relying on centralized entities or custodians. These tunnels ensure that assets remain securely stored in decentralized smart contracts, giving users full discretion over their deployment

Initially, Hemi uses a centralized sequencer, which will later be adapted to a validator-based Proof-of-Stake (PoS) system. The sequencer confirms transactions and produces new blocks. 

Hemi further secures itself by anchoring to the Bitcoin network through PoP. Nodes called PoP miners periodically publish Hemi’s consensus data onto the Bitcoin blockchain, leveraging Bitcoin’s Proof-of-Work security. 

Hemi uses the information published on Bitcoin’s network to prevent reorgs, where an attacker attempts to replace or manipulate blocks by providing fraudulent data. Once a Hemi L2 block has reached a depth of 9 on Bitcoin, the network reaches a state of Superfinality. The additional blocks provide an extreme level of security for Hemi so that any malicious attempts to manipulate the network’s state will require greater amounts of computational power and coordination. An attacker would need to control a majority of both Hemi and Bitcoin networks to alter the state of the chain, which is economically, technically, and practically unfeasible.

On the developer side, Hemi offers an EVM-based environment through the Hemi Virtual Machine™  (hVM™), which includes a fully indexed Bitcoin node to enable seamless cross-chain functionality. The Bitcoin node also allows Hemi to directly access and verify Bitcoin blockchain data, free of third-party oracles, allowing developers to create EVM-based dApps with native Bitcoin awareness.

The Bitcoin node also provides the infrastructure needed to publish PoP transaction proofs directly to Bitcoin natively within Hemi, reducing latency. With a Bitcoin node built into the network, the hBK can use it to monitor the Bitcoin network for proof confirmations, so blocks can achieve finality and superfinality via Bitcoin’s consensus.

Hemi Redefines Layer 2 Standards

Hemi redefines what a Layer 2 network can achieve, harmonizing the security of Bitcoin with the flexibility of Ethereum, all within a scalable, developer-friendly environment. Its hybrid PoP consensus model combines Hemi with the unmatched immutability of Bitcoin’s PoW. 

The use of sovereign tunnels for asset transfers of Ethereum and Bitcoin ecosystems promotes interoperability and averts single points of failure or custodial risk introduced by bridges. The EVM-compatible environment of cross-chain functional hVM lets developers build innovative apps featuring cross-chain functionality without compromising performance or security.

Hemi’s PoP allows the network to achieve a state of finality and resilience that surpasses traditional blockchain architectures. This layered approach eliminates the trade-offs common to Layer 2 solutions, setting a new standard for what blockchain networks can accomplish.