Bankless: What is the relationship between L2 and Ethereum?

L2 and Ethereum thrive together, and innovation and collaboration are needed to drive the crypto ecosystem forward.

Original text: This narrative has sparked a crucial debate: Are L2s Ethereum?

Author: BanklessHQ

Compiled by: Vernacular Blockchain

Cover : Photo by Shubham Dhage on Unsplash

Market sentiment is currently low, with critics quick to point out Ethereum’s (ETH) underperformance compared to Solana (SOL), attributing much of this to user churn caused by the mindshare of L2 (second layer) technology.

This view raises a key discussion: Is L2 equivalent to Ethereum?

@arjunnchand did a great in-depth analysis of this…

1. Symbiosis or division?

L2 has always been an important part of Ethereum’s roadmap with Rollups at its core. From the beginning, they were envisioned as an extension of Ethereum (both technically and culturally), designed to expand its capabilities and appeal to a wider user base.

Essentially, L2 is closely tied to Ethereum. They share Ethereum’s DNA — relying on ETH as currency, benefiting from Ethereum’s security protection, and using it for data storage and settlement. It’s like a startup leveraging its parent company’s infrastructure and brand recognition, with mutual benefit.

The symbiotic relationship between L2 and Ethereum cannot be ignored. L2 thrives on Ethereum’s infrastructure and security, while Ethereum benefits from increased activity and demand for ETH, making it a better store of value.

By offering lower fees and faster transactions, L2 makes it easier for developers to build all types of applications. Look at the explosive growth of memecoin on Base, or the rise of SocialFi platforms like Farcaster, which create new markets for users.

In addition, L2 is becoming an important center of DeFi activities, and ETH assets play a core role in this ecosystem. Look at the data: @arbitrum, @Optimism, @base - these chains are mainly ETH-related assets.

2. User acquisition ?

However, one of the main arguments against the Rollup-centric approach to Ethereum scaling is that L2s may not continue to rely on Ethereum. Right now, L2s and Ethereum look like a happy family. But what if L2s build their own empires and get rid of Ethereum completely? No longer relying on Ethereum's security, no longer using ETH as fuel, and no longer even needing Ethereum's block space?

This concern about "L2 going independent" is reasonable. Technically, L2 can build an independent ecosystem with its own validators, thus owning the entire modular blockchain stack. So, does this mean that there will be a chaotic split between L2 and Ethereum in the future? Not necessarily.

Creating a new ecosystem or launching another L1 blockchain is a complex and resource-intensive task. Building a validator cluster is a major undertaking, and building a new L1 will likely run into the same scaling challenges that Ethereum currently faces. If L2 is going to go this route, they will probably do it from the beginning.

3. Secret strategy ?

On the contrary, L2 developers are playing a different game. Their main focus is to scale transactions, attract developers, incentivize them to build applications for different use cases, and guide new users into the crypto space, while Ethereum takes care of security and decentralization issues.

But this does not mean that there are no foreseeable problems in the formation of the L2 ecosystem. This is a strange paradox: on the one hand, the popularity of L2 proves the success of the Rollup-centric roadmap; on the other hand, it may also be the source of division.

We all agree that there are probably a little too many L2s. Too many copycats and not enough differentiation. It's like a thousand startups competing for the same market, promising the same thing. It's not healthy.

What we need are L2s that matter. L2s that offer unique capabilities and differentiate themselves. Security, application diversity, go-to-market strategies—these are areas where real innovation is needed.

Don’t forget the bigger picture. As Ethereum scales through these L2s, we need to make sure it still feels like Ethereum. We need to avoid the pitfall of splitting off and having everyone go their own way.

L2 requires seamless connectivity, and teams are launching technology stacks to develop a unified chain network that shares resources and provides users with a smoother and faster experience - @SuperchainEco, @0xPolygon's AggLayer, @zksync's Elastic Chain, and Arbitrum's Orbit Chains are all promising initiatives in this direction.

But we must be wary of "echo chambers" and these chain zones should not become isolated universes. A healthy L2 ecosystem is collaboration between chains, not isolation. We need bridges, not trenches.

We need to collaborate, we need to communicate, we need to educate, we need to motivate, and we need to build shared infrastructure and standards to facilitate seamless connectivity between L2s. Only in this way can we truly work together to achieve a win-win situation.

4. Conclusion

One can argue that L2 is not Ethereum, and one can argue that L2 is not even an extension of Ethereum, but it is undeniable that L2 does improve the practicality of Ethereum and ETH.

The “L2 vs Ethereum” debate is a false dichotomy. This is not a zero-sum game. Ultimately, Ethereum and L2 are meant to grow together. Let’s build a future where Ethereum and L2 thrive together and drive the crypto ecosystem forward.

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