The Future of Ethereum's Layer 2 Ecosystem - The Daily Gwei Refuel #856 - Ethereum Updates

Anthony Sassano discusses Vitalik Buterin's recent tweet about the progress of Ethereum's Layer 2 (L2) ecosystem, describing it as a "Rorschach test" open to interpretation regarding the status of L2s and the focus on Layer 1 (L1) scaling. Vitalik points out the slower-than-expected progress towards Stage 2 for L2s and the effective scaling of L1, which is expected to have low fees and increased gas limits by 2026. Sassano agrees, noting that most major rollups are still at Stage 0 or Stage 1, with ZK Money V1 being the only Stage 2 rollup, which lacks widespread use. He attributes the delay to the complexities of security and development rather than malicious intent.

The conversation highlights the limited demand for native interoperability from a profit perspective, as existing ecosystems allow for fast bridging despite trust issues. While L1 scaling is improving, it is not sufficient alone, and L2s remain essential for scaling and other functions. The evolution of L2 solutions from state channels to optimistic and ZK rollups is discussed, with recent advancements indicating that L1 can scale more than previously thought. However, Vitalik's assertion that L1 does not need L2s branded as shards is contentious, as L2s are seen as crucial for scaling the Ethereum ecosystem.

Sassano clarifies that while L2s at Stage 0 or 1 scale Ethereum as an asset and ecosystem, they do not contribute to scaling L1 block space. To achieve this, increasing the gas limit or utilizing ZKVM or native roll-ups is necessary. The vision for L2s has evolved to focus on expanding the Ethereum ecosystem with customizable chains. The speaker emphasizes that L2s do not need to be decentralized to provide value, aligning with business needs, and should be viewed as diverse options rather than mere extensions of Ethereum.

The discussion includes the RISE chain and its features, questioning whether the original speaker is unaware of existing technologies or simply providing examples. While agreeing that scaling is crucial, the speaker believes current L2s are already differentiated and functioning effectively. They stress the importance of not alienating builders contributing positively to the ecosystem, even if their projects do not meet strict definitions.

The value of the native rollup precompile, which verifies ZKVM proofs integrated with Ethereum, is discussed, along with the trade-offs of native rollups in terms of speed and customizability. The speaker argues that native rollups should not be classified as L2s since they are part of the L1 protocol. They propose that the native rollup precompile could enable full security council-free EVM verification and allow L2s to innovate while using their own provers for additional features.

The conversation highlights the importance of design trade-offs and the potential for L2s to innovate rather than merely extend L1. Examples like Arbitrum and Base illustrate how some L2s are introducing unique features while still extending the EVM. The speaker notes that OP Mainnet is seen as redundant, primarily extending L1 EVM block space without significant impact. They recognize that while some L2s may introduce trust-dependent features, the responsibility lies in clarifying user guarantees and strengthening Ethereum.

Speaker 1 critiques Vitalik's tweet, arguing it reiterates existing ideas without acknowledging ongoing efforts in the Ethereum ecosystem. They express confusion over the tweet's framing, suggesting it implies the community is neglecting important issues, despite active work in those areas. They disagree with interpretations suggesting L2s aren't part of Ethereum, clarifying that Vitalik's message adds nuance rather than dismissing L2s.

The conversation emphasizes that L2s should not only focus on scaling but also differentiate themselves. Speaker 1 finds the debate over whether L2s are part of Ethereum unproductive and asserts that anyone building within the ecosystem is inherently part of it. They predict that critics will misinterpret Vitalik's tweet to argue against the necessity of L2s.

Discussion shifts to Vitalik's comments on L1 and L2 scaling, highlighting that L2s should leverage different strengths than L1s. The equation "L1 + L2 = Ethereum" underscores the importance of both layers for effective scaling. Speaker 1 notes that L1 scaling alleviates pressure on L2s while acknowledging the customizability and scalability aspects of L2s. They express newfound support for increasing gas limits, identifying as a "gas limit bull," while maintaining that L2s are essential for Ethereum's overall scalability.

The speaker encourages businesses to build within the Ethereum ecosystem rather than creating their own L1s, referencing Vitalik's "stage zero" concept. They discuss the trade-offs in L1 and L2 scaling and the role of scaling blobs. To clarify misinterpretations of Vitalik's tweet, Speaker 1 invites listeners to engage in discussion via Discord, concluding with a promise to revisit the topic in a future episode.