The debate on Ethereum and L2 solutions

Content

Recently, there have been views that L2 is fragmenting Ethereum and extracting value from Ethereum, is this true? As the Ethereum ecosystem, how can we do better?

Offchain Labs co-founder and CEO Steven Goldfeber believes that today's L2 and layered design are the "superpowers" of Ethereum. He uses the most successful protocol in history - the Internet - as an example, the Internet is also a layered architecture. In the 90s, we also had similar discussions, was the emergence of the Internet a good thing or a bad thing? It turned out to be a good thing. L2 is the same, it is also a good thing.

Today, there are over 100 L2 and L3 projects that can be queried on L2BEAT, thanks to Ethereum's layered architecture, with Ethereum at the bottom providing consensus, these L2 and L3 do not need to develop their own consensus mechanism, they are all driven by Ethereum, and can innovate on Ethereum, with Ethereum providing security guarantees.

However, this does bring interoperability challenges, and we need to figure out how they communicate and interoperate with each other. Steven Goldfeber believes that as a community, one area that can be improved is: sometimes people are too focused on their own technology stack, and while this consideration is sometimes due to technical reasons, he believes that where possible, we should consider "how to make all Ethereum chains communicate with each other", rather than limiting ourselves to our own ecosystem due to technical constraints.

Regarding whether L2 is parasitic on Ethereum or will bring value to it, StarkWare co-founder and CEO Eli Ben-Sasson believes it is still too early to discuss this question. Because the proportion of people using blockchain technology is still very small. Our real challenge is to provide scalability, use cases and a new vision for humans to embrace this technology. When the dust settles, value will eventually accumulate somewhere, perhaps in places that do not yet exist. He admits that he is not sure whether the value will ultimately accumulate in StarkWare, or in a competitor, or elsewhere. But that doesn't matter. The most important thing is that we invest our time in valuable things and drive technological progress. He has no doubt that through various ways to advance L2 and Ethereum, it will bring tremendous value to humanity. Looking back, he is proud of the efforts he and his team have made, and although uncertain about the future attribution of value, he is satisfied with the technology they are building.

Polygan co-founder Sandeep Nailwal used a proof by contradiction to answer this question. Assuming that all L2s were removed from Ethereum, Ethereum would become a very slow chain, processing only 13 transactions per second (TPS). Without L2, most decentralized applications (dApps) and activities might have already migrated from Ethereum to other L1 chains. It is because of L2 that all these developers are still in the Ethereum ecosystem, and now Ethereum is no longer a single network, but a "Constellation". All developers can deploy applications on L2s like Starkware, Arbitrum, Polygon, Scroll, and achieve large-scale adoption. If there were only Ethereum, and gas fees were as high as $50, Ethereum developers would not be able to use these resources, and on-chain activity would be very low. We have also seen in past cycles that the market has doubted Ethereum's success and believed that other L1s would replace Ethereum. Without L2, 100% of people would believe that Ethereum would gradually be phased out. "Without L2, Ethereum would not exist as it does today," said Sandeep Nailwal.

Scroll co-founder Sandy Peng recalled the first time she heard about Ethereum's L2-centric roadmap and the concept of the "Infinite Garden" (see previous article: "Infinite Garden": The Vision of Ethereum), which left a deep impression on her. She believes that this way of applying different technological variants and experimental applications to scale Ethereum is highly innovative and unprecedented.

At the time, multiple L1 chains were already experiencing fragmentation, liquidity, and developer attention. Therefore, from a base layer perspective, she believes that adopting L2 solutions on Ethereum is a pragmatic choice. Different technical solutions are also experimenting and exploring how to scale Ethereum. Now, she believes the entire ecosystem is in a very healthy state, with many capable participants demonstrating their understanding of scaling Ethereum.

We have now entered the next stage, where the technology stack is maturing. There are many ready-made solutions that can be immediately applied. She believes that Ethereum was ahead of the industry in proposing these concepts, while other blockchains are trying to describe similar architectures with different names. But fundamentally, the L2-centric scaling roadmap may be the only truly scalable way forward.

For developers and new users who want to enter the Ethereum ecosystem, how can their experience be simplified when faced with cross-chain bridges and operations between the many L2s?

Polygan co-founder Sandeep Nailwal said they have recognized the fragmentation problem in the L2 ecosystem. To this end, Polygan is developing a solution called AggLayer, which can integrate with most L2s, providing a unified interface to make interoperability simpler and more intuitive, so users don't have to go through cumbersome operations. Developers also have corresponding libraries, so ordinary users don't have to face complex technical operations.

He believes that each ecosystem, especially the L2 ecosystem, is thinking about interoperability solutions in some way, or collaborating with other ecosystems, to find a better user experience path for users and developers.

StarkWare co-founder and CEO Eli Ben-Sasson believes the real challenge is how to attract non-native crypto users. On StarkNet, they have adopted a 100% native account abstraction mechanism, where wallets provide users with a Web2-like experience through face recognition or biometric login, without the need for complex keys or seed phrases, while still maintaining Web3 security. Since this is a fully self-custodial wallet, it ensures security while providing a more convenient user experience. Ethereum is also moving towards account abstraction models. He believes the future direction is to make all operations more abstracted and seamless. As blockchain computing power and standards improve, users will be able to enjoy a convenient experience similar to other domains while maintaining Web3 security.

Offchain Labs co-founder and CEO Steven Goldfeder believes that while account abstraction functionality is important, the issue of specifying chain addresses cannot be overlooked. Now users often switch between different chains, and it's easy to accidentally transfer to the wrong chain, resulting in loss of funds. Steven Goldfeder believes users should not have to worry about the technical issues behind these chains, but only focus on the application scenarios, just like in the Web2 world of ride-hailing apps, where users only need to know how to use the app to get a ride, without considering the underlying network stack (TCP/IP stack). In the blockchain user experience, it is important to be able to downplay these technical backgrounds.

Do you think an L2 will eventually break away from Ethereum and become an independent chain?

Steven Goldfeder believes that it is not difficult to establish an independent L2 chain now, and someone may do so in the future, but for those serious builders who truly care about security and decentralization, this is unlikely to happen, just as it would be like trying to separate a ride-hailing app from the internet - it can be done, but in doing so, the connection to the outside world is severed, and no rides can be called. L2s need to rely on Ethereum's support and security assumptions. If Ethereum is removed, all of this ceases to exist.

Polygan co-founder Sandeep Nailwal believes that dividing L1 and L2 into two categories is actually an oversimplification. L1 should be understood as a settlement environment, while L2 serves as an execution environment. Ethereum as the settlement layer provides decentralization, security, and guarantees. If you want to achieve high performance in a serious execution environment, some decentralization and other prerequisites need to be shifted to the settlement layer, and Ethereum is the most powerful settlement layer.

In the future, many L2s may gradually become more decentralized and look more like L1s, as they will have their own validators and consensus mechanisms, but they will still rely on Ethereum as the settlement layer. So from this perspective, future L2s will operate independently like L1s, but their core will still be as an execution environment, while Ethereum will continue to be the primary settlement layer.

Additionally, he believes Bitcoin also has the potential to become a competing trusted settlement layer to Ethereum. If Bitcoin can open up more functionality, in the future some L2s may choose to settle on Bitcoin instead of relying solely on Ethereum. However, currently, Ethereum remains the most powerful settlement layer.

What else does Ethereum as a settlement layer need to provide in terms of ideology or technology?

StarkWare co-founder and CEO Eli Ben-Sasson believes Ethereum must pursue maximum decentralization and breadth, as this is the unique and core foundation of trust in blockchains. Decentralization and breadth are crucial, whether in L1 or L2.

Polygan co-founder Sandeep Nailwal believes that in addition to decentralization, censorship resistance is also needed. Ethereum has experienced shocks under increased OFAC scrutiny, and although the community has successfully restored it to a sustainable level, there are still challenges that need to be continuously improved. Another key point is that the base layer needs to provide a better environment for settlement and L2 technologies. Additionally, Ethereum needs to have a more predictable roadmap. As the number of L2s continues to grow, the Ethereum base layer should remain stable and not introduce too many features, as this could undermine the trust in the L2 ecosystem.

Recently, the Ethereum community has faced pressure on price and value, and the community is discussing how to integrate more functionality into L1. Sandeep Nailwal believes this may be problematic in the long run, as the use cases for L1 should be simple. For Ethereum, the most important thing is to become the best settlement layer.

How do you view Vitalik's current role in the Ethereum ecosystem?

Steven Goldfeder believes that Vitalik is an extraordinary leader with a powerful vision. He is a steadfast long-term thinker, committed to building transformative technologies that can revolutionize the world. He insists on decentralized governance and is open to many controversial ideas. Vitalik is a leader in promoting decentralized values.

Sandeep Nailwal believes that Vitalik's role is that of a mediator. He does not treat Ethereum as his own network, but rather sees it as a public good, welcoming anyone to build on it. In past discussions about the roadmap, he has always listened to feedback, made multiple changes, and incorporated various feedback. Vitalik needs to continue providing this good mediation to ensure that the core of Ethereum is not affected by the current market cycle and price pressures.

Will Solana replace Ethereum?

Sandeep Nailwal states that Ethereum also faced strong attacks from the Bitcoin community in its early rise, but the Ethereum community remained open-minded and considered how to make the entire industry more open and inclusive. The Ethereum community acknowledges that the Solana community may also be doing some interesting things and is keeping an eye on it.

Sandeep Nailwal believes that the construction of L1 is a long-term process, and building a long-term, organically growing community is the key to determining the success of an L1. Moreover, the core goals of Ethereum and Solana are different. Ethereum is committed to becoming a settlement layer, while Solana is more focused on building a fast execution environment. The competition between the two is just a difference in marketing strategies, not a direct competition.

Eli Ben-Sasson believes that the current competition within the cryptocurrency field is meaningless from a macro perspective, and the real importance is to provide actual value for the daily lives of the outside world.

Steven Goldfeder believes that the existence of Solana has prompted the Ethereum community to accelerate the push for L2 expansion, especially in terms of improvements in security, decentralization, and scalability.

Summary

Overall, L2 solutions have gained widespread recognition in the development of Ethereum. Although facing challenges in terms of interoperability, decentralization, and censorship resistance, with the advancement of technology, we look forward to seeing better solutions.

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