As Ethereum continues to cement itself as the leading smart contract blockchain network, an array of layer 2 scaling solutions have emerged to help bring greater capacity, lower costs, and increased security to the ecosystem. According to Ethereum co-founder Vitalik Buterin, the layer 2 landscape is likely to remain diverse and heterogeneous going forward.
In a recent blog post titled “Different Types of Layer 2s,” Buterin provided an overview of the current state of Ethereum layer 2 solutions and why he expects continued variation in technical approaches:
EVM rollups like Arbitrum, Optimism, Scroll, and more recently, Kakarot and Taiko have made major advancements in improving the security of their solutions through innovations in fraud proof mechanisms and zero-knowledge proofs.Polygon, originally an independent layer 1 blockchain, has also built its own EVM rollup called Polygon zkEVM to complement its existing sidechain solution.By bringing rollup technology to their sidechains, projects like Polygon aim to provide an incremental path toward greater Ethereum interoperability and security.In addition to EVM rollups, “almost-EVMs” like zkSync allow Ethereum developers to reuse their skillsets while enabling advanced scaling capabilities through zk-SNARKs.Starknet has also emerged as a leading permissionless decentralized rollup using STARK proofs.Other creative solutions like Arbitrum Stylus and Fuel Labs build on top of Arbitrum and Starknet, respectively, to extend functionality.
According to Buterin, there are several key reasons driving continued innovation and heterogeneity across layer 2 solutions:
Some projects currently operating as standalone layer 1s wish to integrate more deeply with Ethereum to benefit from its security and liquidity.However, these projects need time to transition gradually, as shifting entirely to a rollup now would hurt usability, but waiting too long risks missing the opportunity.Centralized applications exploring blockchain integration only require “halfway house” decentralization, not the full security guarantees of a rollup.Their high throughput needs also make rollups impractical in the short term. Validiums and sidechains are better suited for these use cases today.Consumer apps like social media and gaming need modularity to handle different security requirements. High-value activities warrant rollup security, while low-value actions can rely on lower guarantees.While Ethereum native users may tolerate rollup fees to improve security, non-blockchain users are accustomed to zero fees. Solutions like sidechains and validiums can offer a smoother onboarding experience in the near term.
When assessing the tradeoffs between solutions offering varying degrees of decentralization and Ethereum interoperability, Buterin highlights two key considerations:
Ethereum’s native data availability is improving through innovations like proto-danksharding and data compression techniques. This expands the viability of highly secure rollup solutions over time.The needs and sensitivities of specific use cases. Finance applications demand robust security guarantees. Consumer apps can better tolerate lower security and runaway fees.
Buterin notes two primary dimensions for evaluating a layer 2’s “connectedness” to Ethereum:
The guarantees allow users to withdraw assets issued on Ethereum back to the base layer. Rollups provide stronger assurances than validiums.The ability to read Ethereum state and sync revert actions Tighter coupling enables superior composability but requires more complex bridge logic.
For both dimensions, projects sit on a spectrum, ranging from loose integration to tight interleaving with Ethereum. There are merits to different approaches depending on the use case:
“In many cases, starting with something looser today and moving to a tighter coupling over the next decade as technology improves may well be optimal.”
The layer 2 landscape is primed to continue diversifying as Ethereum gears up for native scaling improvements in sharding and rollup interoperability.
While rollups are likely to serve as long-term solutions for decentralized finance and other security-critical applications, alternative layer 2 technologies will also proliferate in the coming years to meet the needs of gaming, social media, the Internet of Things, and more.
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