At the TOKEN2049 themed event on September 19, 2024, several industry leaders conducted in-depth discussions on the topic of "The Argument for Ethereum and Layer 2 Solutions". Joyce Yang, founder of Global Coin Research, was responsible for raising questions and sparking thinking. Steven Goldfeder, co-founder and CEO of Offchain Labs, Eli Ben-Sasson, co-founder and CEO of StarkWare, Sandeep Nailwal, co-founder of Polygon, and Sandy Peng, co-founder of Scroll, discussed the following controversial issues. To improve readability, we have organized and summarized its content and retained the main points.
Main content
Recently, there is a view that L2 is splitting Ethereum and grabbing value from Ethereum. Is this true? As an Ethereum ecosystem, how can we do better?
Offchain Labs co-founder and CEO Steven Goldfeder believes that today's L2 and layered design are the "superpower" of Ethereum. He took the example of the most successful protocol in history, the Internet, which is also a layered architecture. We had similar discussions in the 1990s. Is the emergence of the Internet a good thing or a bad thing? It turns out that it is a good thing. The same is true for L2, which is also a good thing.
Today, there are more than 100 L2 and L3 that can be queried on L2BEAT. Thanks to Ethereum's layered architecture, that is, Ethereum is at the bottom and provides consensus for it. These L2 and L3 do not need to develop their own consensus mechanisms. They are all driven by Ethereum and can innovate on Ethereum, and Ethereum provides security for them.
But this does bring interoperability challenges. We need to figure out how they can communicate and interoperate with each other. Steven Goldfeder believes that one thing that can be improved as a community is that sometimes people are too focused on their own technology stacks. This consideration is sometimes indeed for technical reasons, but he believes that, where possible, we should consider "how to make all Ethereum chains communicate with each other" instead of limiting ourselves to our own ecosystems because of technical limitations.
As to whether L2 is parasitic on Ethereum or will bring value to it, StarkWare co-founder and CEO Eli Ben-Sasson believes that it is too early to discuss this issue. Because the proportion of people using blockchain technology is very small at present. Our real challenge is to provide humanity with scalability, use cases, and new visions so that humans can embrace this technology. When everything settles, value will always gather somewhere, and perhaps these values will be concentrated in places where they do not exist yet. He admitted that he was not sure whether the value would eventually accumulate here at StarkWare, or at a competitor, or somewhere else. But it doesn't matter. The most important thing is that we invest our time in valuable things and promote technological progress. He has no doubt that advancing the development of L2 and Ethereum in various ways will bring great value to mankind. Looking back, he is proud of the efforts he and his team have made, and although he is uncertain about the future value, he is satisfied with the technology he is building.
Polygan co-founder Sandeep Nailwal answered this question using a proof by contradiction. Assuming that all L2s are removed from Ethereum, Ethereum will become a very slow chain that can only process 13 transactions per second (TPS). Without L2, most decentralized applications (dApps) and activities may have migrated from Ethereum to other L1 chains. It is precisely because of L2 that all these developers are still in the Ethereum ecosystem. Now Ethereum is no longer a single network, but a "constellation". All developers can deploy applications on L2s such as Starkware, Arbitrum, Polygon, and Scroll and achieve large-scale adoption. If there is only Ethereum and the gas fee is as high as $50, Ethereum developers will not be able to use these resources and there will be very little activity on the chain. We have also seen in past cycles that the market has doubted that Ethereum cannot succeed and believes that other L1s will replace Ethereum. Without L2, 100% of people believe that Ethereum will gradually become obsolete. "Without L2, Ethereum will not exist as it is today." Sandeep Nailwal said. Scroll co-founder Sandy Peng recalled the first time she heard about Ethereum’s L2-centric roadmap and the concept of “infinite garden” (see previous articles: “Infinite Garden”: Ethereum’s Vision) impressed her. She believes that this way of applying different technical variants and experiments to Ethereum’s expansion is very innovative and unprecedented.
At that time, multiple L1 chains were already experiencing, liquidity and developers on the split chain. Therefore, from the perspective of the base layer, she believes that adopting L2 solutions in Ethereum is a pragmatic choice. Different technical solutions are also experimenting and exploring how to expand Ethereum. Now, she believes that the entire ecosystem is in a very healthy state, and many powerful players are demonstrating their understanding of expanding Ethereum. Today, we have different solutions, and a large number of different strategies,
We have entered the next stage, and the technology stack has matured. There are many ready-made solutions that can be applied immediately. She believes that Ethereum has been at the forefront of the industry when proposing these concepts, while other blockchains have tried to describe similar architectures with different names. But fundamentally, an L2-centric expansion roadmap may be the only way to truly achieve scale.
For developers and new users who want to enter the Ethereum ecosystem, how to simplify their experience when faced with cross-chain bridging and operations between numerous L2s?
Polygan co-founder Sandeep Nailwal said that they have recognized the problem of fragmentation between L2 ecosystems. To this end, Polygan is developing a solution called AggLayer that can be integrated with most L2s to provide a unified interface, making interoperability simpler and more intuitive, and users do not have to go through cumbersome operations. Developers also have corresponding libraries, and ordinary users do not have to face complex technical operations.
He believes that every ecosystem, especially the L2 ecosystem, is thinking about interoperability solutions in some way, or working with other ecosystems to find a better user experience path for users and developers.
StarkWare co-founder and CEO Eli Ben-Sasson The real challenge is how to attract non-native crypto users. On StarkNet, a 100% native account abstraction mechanism is used, through which the wallet provides users with a Web2-like experience, such as logging in through facial recognition or biometrics, without the need for complex keys, mnemonics, etc., while still having the security of Web3. Because this is a completely self-custodial wallet, it ensures security while providing a more convenient user experience. Ethereum is also moving towards the account abstraction model and other directions. He believes that the future direction is to make all operations more abstract and seamless. With the improvement of blockchain computing power and the improvement of standards, users will be able to enjoy a convenient experience similar to other fields while maintaining the security of Web3.
Offchain Labs co-founder and CEO Steven Goldfeder believes that the account abstraction function is important, and the problem of specifying chain addresses cannot be ignored. Now when users switch between different chains, it is easy to transfer to the wrong chain and lose funds. Steven Goldfeder believes that users should not bother to pay attention to the technical issues behind these chains, but only need to focus on the application scenarios, just like the taxi-hailing software in the Web2 world. Users only need to understand how to use it to get a taxi, rather than considering the network stack (TCP/IP stack) behind it. In the blockchain user experience, it is important to be able to downplay these technical backgrounds.
Do you think there will be an L2 that breaks away from Ethereum and becomes an independent chain in the future?
Steven Goldfeder believes that it is not difficult to build an independent L2 chain now. Some people may do so in the future, but for serious builders who really care about security and decentralization, this will not happen. It's like separating a taxi-hailing software from the Internet. You can do this, but if you do this, you will cut off contact with the outside world and you won't be able to call a car. L2 needs to rely on the support and security assumption of Ethereum. If Ethereum is removed, all of this will no longer exist.
Polygan co-founder Sandeep Nailwal believes that it is an oversimplification to divide L1 and L2 into two categories. L1 should be understood as a settlement environment, while L2 is an execution environment. Ethereum, as a settlement layer, provides decentralization, security, and guarantees. If you want to achieve high performance in a serious execution environment, you need to move some decentralization and other prerequisites to the settlement layer, and Ethereum is the most powerful settlement layer.
In the future, many L2s may gradually become decentralized and look more like L1s because they will have their own validators and consensus mechanisms, but they still rely on Ethereum as a settlement layer. Therefore, from this perspective, future L2s will operate independently like L1s, but their core is still an execution environment, and Ethereum will continue to be the main settlement layer.
In addition, he believes that Bitcoin also has the potential to become a trusted settlement layer that can compete with Ethereum. If Bitcoin can open up more functions, some L2s may choose to settle on Bitcoin in the future instead of relying solely on Ethereum. However, at present, Ethereum is still the most powerful settlement layer.
What else does Ethereum need to provide in terms of ideology or technology as a settlement layer?
StarkWare co-founder and CEO Eli Ben-Sasson believes that Ethereum must pursue maximum decentralization and extensiveness because this is the unique and core trust foundation in the blockchain. Decentralization and extensiveness are crucial whether in L1 or L2.
Polygan co-founder Sandeep Nailwal believes that in addition to decentralization, censorship resistance is also required. Ethereum has experienced shocks when OFAC's review pressure increased. Although the community has successfully restored it to a sustainable level, there are still challenges and it is necessary to continue to work hard to improve in this regard. Another key point is that the base layer needs to provide a better environment for settlement and L2 technology. In addition, Ethereum also needs to have a more predictable roadmap. As the number of L2 increases, the Ethereum base layer should remain stable and should not introduce too many functions, otherwise it may affect the trust of the L2 ecosystem.
Recently, the Ethereum community has been facing price and value pressures, and the community is discussing how to integrate more functions into L1. Sandeep Nailwal believes that this may be problematic in the long run, and the use case of 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 strong vision. He is a firm long-termist who is committed to fundamentally building technologies that can revolutionize the world. He insists on decentralized governance and tolerates many controversial ideas. Vitalik is a leader in promoting decentralized values.
Sandeep Nailwal believes that Vitalik's role is a mediator. Instead of treating Ethereum as his own unique network, he sees Ethereum as a public good that anyone is welcome to build on. In past discussions about the roadmap, he always listened to feedback, made multiple changes, and adopted various feedback. Vitalik needs to continue to provide this good mediation to ensure that the core of Ethereum is not affected by the current market cycle and price pressure.
Will Solana replace Ethereum?
Sandeep Nailwal said that Ethereum was also strongly attacked by the Bitcoin community in the early days of its rise, but the Ethereum community remained open-minded and thought about how to promote the entire industry to become more open and inclusive. The Ethereum community acknowledges that the Solana community may also be doing something interesting and keeps an eye on it.
Sandeep Nailwal believes that the construction of L1 is a long-term process, and it is necessary to build a community that continues to grow organically in the long term, which 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 direct competition.
Eli Ben-Sasson believes that the current competition within the cryptocurrency field is meaningless from a macro perspective. What is really important is to provide real value to the daily life of the outside world.
Steven Goldfeder believes that the existence of Solana has prompted the Ethereum community to accelerate the promotion of L2 expansion, especially in terms of security, decentralization and scalability.
Summary
Overall, L2 solutions have been widely recognized in the development of Ethereum. Despite the challenges of interoperability, decentralization and anti-censorship, as technology develops, we look forward to seeing better solutions.
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