Empowering Sustainable Communities: The Role of Layer 2 Blockchains in Unlocking Peer-2-Peer Energy Trading

This paper explores the disruptive potential of blockchain technology in advancing sustainable energy practices within communities through the implementation of a novel oper-ational stack layer 2 (L2) rollup. This blockchain solution is de-signed to enhance transparency, ensure genuine decentralization, and facilitate interoperability in energy trading. By integrating an L2 rollup on Ethereum, the system addresses critical scalability issues inherent in traditional decentralized blockchain models, thereby reducing transaction costs and increasing throughput. The primary focus is on how such a technological framework can empower communities to manage their energy resources more efficiently and sustainably. The paper also discusses the technical architecture of the L2 rollup and the potential barriers to its adoption. Through this analysis, we argue that blockchain technology, particularly through enhancements like L2 rollups, is crucial for sustainable communities focused on renewable energy trading with no central third-party control. This paper also overviews different market structures, particularly the uniform bidding market structure, chosen for its simplicity and effectiveness in aligning with the decentralized ethos of blockchain technology. This market model ensures that all participants are treated equitably, paying the same market-clearing price that reflects the true supply and demand of the energy market.