What to know:
- Ethereum updates its L1–L2 model after 5 years
- L1 remains the settlement and security backbone
- L2s evolve toward specialization and customization
- Minimum “Stage 1” security recommended for L2s
- ZK technology is expected to scale L1 significantly
Ethereum Foundation has introduced a new vision for the future of the Layer 1 (L1) and Layer 2 (L2) stack together, a major change from the rollup-centric vision introduced five years ago. The update is a result of the tremendous growth in the ecosystem and a need to redefine the balance of scaling, security, and specialization for the Ethereum network.
A Shift From the 5-Year-Old Rollup-Centric Model
Five years ago, Ethereum took a rollup-centric approach to solve the problem of scalability. Since then, a variety of L2s and their associated chains have appeared, each with different trade-offs in terms of decentralization, security, and performance.
The latest framework acknowledges that the ecosystem has outgrown a one-size-fits-all scaling solution. Instead, Ethereum now envisions a more structured relationship between L1 and the multiple L2s.
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Defining the Role of Ethereum L1
Ethereum L1 is expected to continue as the base of the ecosystem and perform the role of the global settlement layer, the hub for decentralized finance (DeFi), a highly secure and decentralized base layer, and the source of deep liquidity and network trust.
Scalability solutions for ETH will not compromise on security, decentralization, and robustness; rather, they will continue to prioritize these aspects on the L1.
The Evolving Role of L2 Networks
The role of L2 networks has evolved beyond being mere scaling solutions. Instead, their role has expanded to include customized services and use cases, support for application-specific optimizations, improved execution speed and reduced latency, and new forms of governance and economic models.
The change in their role has been influenced by the increasing demand for flexibility, which cannot be accommodated by a single L1.
Security Standards and Future Upgrades
The ETH Foundation suggests that “L2 solutions aim for at least ‘Stage 1’ security, with the long-term vision of ‘Stage 2’ security.”
The key future developments that need to be implemented in the future are better composability between L2 solutions, adoption of “Native Rollups”, and Better alignment with the security guarantees of Ethereum. These upgrades aim to ensure that scaling does not compromise trust.
Scaling Ethereum L1 With New Technologies
Ethereum L1 is also poised to scale up enormously with technologies like zero-knowledge (ZK) tech, amongst others, which could potentially lead to orders-of-magnitude scaling, reducing costs without compromising decentralization, and increased efficiency in data management, like blobs, which are currently underutilized. This dual approach ensures both L1 and L2 evolve in parallel.
Addressing Fragmentation in a Multi-Chain Ecosystem
One of the challenges that has been identified in this regard is the issue of fragmentation in chains. This is particularly true as more and more L2s and independent chains come into existence.
For this reason, several steps are being taken in this regard on the ETH chain, including improved cross-chain interaction, simplification of the user experience, and promotion of unified standards and communication. Reducing fragmentation is seen as critical for mainstream adoption.
Why Multiple Chains Are Here to Stay
Even after scaling, Ethereum recognizes that a single chain is not able to fulfill all the demands of the world. There will be multiple chains, and it is because of application-specific specialization, privacy and compliance, unique economic and governance systems, and faster innovation outside L1 limitations. This again emphasizes the importance of a collaborative multi-layer system.
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