How L1 and L2s can Build the strongest possible Ethereum

4 days ago

The North Star of the Platform team is for Ethereum to standard arsenic a cohesive strategy and alteration assured adoption by each users. This doc is intended to stock our position connected the L1 <> L2 relationship, the roles of each layer, and however we (as an ecosystem) are leveraging the strengths of L1 & L2 to make the astir compelling level for each users. Some of this is already wide today, and immoderate of this volition request to beryllium validated done ongoing experimentation and iteration with the assemblage and users 🙏.

On the L1 + L2 relationship

TL;DR:

Goal: each users (individuals and institutions) should person a wide way to leverage, extend, and payment from the halfway properties that Ethereum provides.
- The champion way to getting determination leverages the unsocial capabilities of each layer, reinforces Ethereum’s halfway properties, and unlocks meaningful worth to extremity users done those properties.
The relation of each furniture has evolved arsenic the ecosystem has grown:
- Previously: the superior nonsubjective of L2s was to standard Ethereum, and secondarily to springiness abstraction for differentiation and customization. The biggest lever was connected the scaling side.
- Today: the superior nonsubjective of L2s is to supply differentiated features, services, customizations, go-to-market strategies, and zones of control, portion besides offering other scale. The biggest lever contiguous is astir differentiation, power and innovation.
- Role of L1: service arsenic a genuinely permissionless and maximally resilient planetary hub for settlement, shared state, liquidity, and DeFi.
  - A beardown L1 that is scaling without compromising connected CROPS (censorship-resistance, unfastened source, privacy, and security) provides a amended instauration for L2s
- Role of L2s: present invaluable caller features, customizations, and power to turn their ain onchain economies portion besides extending the halfway properties of Ethereum to much users.
  - A beardown web of L2s reinforces the ecosystem and Ethereum’s halfway of gravity
L2s are afloat spectrum and person a scope of relationships with L1 depending connected their needs
- Relationship to L1: Those L2s seeking the tightest integration with L1 should propulsion towards synchronous composability, afloat interoperability, shared liquidity, Stage 2, and mechanisms similar autochthonal rollups.
- Scope: Many L2s with a wide assortment of concern models and/or method specialization volition proceed to play a large relation successful the ecosystem. All volition connection things the L1 does not.
The EF volition proceed to put successful technologies that let L2s to much seamlessly widen the halfway properties of L1, and securely entree liquidity/capital crossed L1 and different L2s. L2s should support transparency and verifiability of their information properties. In different words, some sides person an important relation to play, and vibes should lucifer substance.

Intro

Over the past 5 years an ecosystem of chains has grown up astir Ethereum L1. There are galore antithetic properties these chains tin take to widen from Ethereum: immoderate inherit afloat decentralization (e.g. Stage 2 rollups), immoderate inherit a subset of the information properties (e.g. validiums, prividiums), and immoderate simply physique connected the communal EVM modular (without being an L2). Many are inactive nether development, often opening arsenic autarkic chains and gradually integrating much profoundly with Ethereum L1.

It is clip for the EF and the broader Ethereum ecosystem to update our exemplary of however Ethereum L1 and this web of L2s should subordinate to each other. The past clip this happened was arguably 5 years ago, erstwhile the rollup-centric roadmap was first proposed arsenic a way to scaling Ethereum.

Since then, overmuch has changed. The technologies that let L2s to stock Ethereum’s security/liquidity and interoperate with it person matured and evolved. The competitory advantages of L2s and their worth to users has go much clear. L2s themselves person grown and matured, becoming ecosystems and communities successful their ain right. And the L1 scaling roadmap has evolved and travel into sharper focus. As an ecosystem we request to admit what has changed and larn from our ecosystem’s successes and failures.

Over the past galore months, a clearer imaginativeness for the aboriginal of the Ethereum L1 <> L2 narration has travel into focus:

A thriving Ethereum ecosystem indispensable beryllium rooted connected a beardown L1 foundation.
Ethereum L1 volition standard by orders of magnitude, portion retaining maximum information & decentralization, remaining the bosom of the onchain system and a hub for DeFi.
There volition beryllium a increasing ecosystem of autarkic and interoperable L2 chains, which volition connection greater customization, control, and features the L1 cannot. These L2s enactment down roots successful the Ethereum ecosystem due to the fact that it is the champion prime for their users, their communities, oregon their businesses.
L2 chains some vie and cooperate (this is bully and healthy) to connection a divers scope of specialized blockspace, services, and assets..

The extremity of this papers is to explicate the L1 <> L2 imaginativeness successful much detail, and laic retired a way to gathering mutually-reinforcing relationships betwixt Ethereum L1 and immoderate concatenation that wants to enactment down roots and go portion of the ecosystem.

What are the roles of L1 and L2s, and however tin they enactment together?

Ethereum L1 is the world’s starring programmable blockchain. No different concatenation contiguous comes adjacent successful presumption of adoption, developer attention, decentralization, resilience, and hardness. Ethereum L1 is the bosom of the DeFi ecosystem and features the deepest liquidity.

Ethereum L1 present has a wide way to scaling portion preserving decentralization and hardness. ZK exertion has accelerated faster than anticipated, owed to the enactment of galore teams crossed the Ethereum ecosystem. In the adjacent fewer years, we volition beryllium capable to standard Ethereum L1 by respective orders of magnitude portion staying existent to its imaginativeness of a concatenation that does not compromise connected its halfway values.

At the aforesaid time, immoderate azygous concatenation volition beryllium incapable to conscionable the divers needs of a planetary onchain economy. Even successful a aboriginal wherever Ethereum remains the world’s starring blockchain and scales 1000x, determination volition beryllium galore antithetic chains due to the fact that they supply specialization and customization that immoderate L1 cannot:

Specialization astir circumstantial applications oregon usage cases
Non-EVM features
Additional privateness guarantees
Pricing mechanisms oregon tx inclusion logic
Ultra debased latency oregon different sequencing properties
Extreme scaling properties L1s cannot match
Specialized economies, go-to-market, and maturation approaches
Modular designs that alteration compliance oregon different concern needs
Other improvements oregon innovations that tin beryllium iterated and shipped faster than connected L1
Governance strategies to springiness stakeholders granular power implicit their ain flexible execution situation connected Ethereum

This presents an accidental for Ethereum L1 and Ethereum L2s to physique mutually beneficial relationships, each focusing connected complementary roles.

Why should different chains privation to beryllium L2s connected Ethereum?

High security, debased counterparty risk, and maximum decentralization astatine importantly reduced cost: L2s execute maximum information & decentralization astatine overmuch little costs than alt-L1s. Building and incentivizing a planetary decentralized validator acceptable is expensive, clip consuming, and difficult. L2s tin offload that work to Ethereum L1, enabling them to “pay for usage” alternatively than wage the ample fixed costs to physique their ain L1 validator network.
Users and developers: L2s summation entree to much users and developers done unafraid interoperability with the largest L1 blockchain and the largest web of L2 chains (interoperability and crosschain UX volition accelerate acknowledgment to ZK technology, real-time proving, faster L1 finality & L2 settlement, and maturation of agentic infrastructure).
Interoperability: L2s, if designed well, tin summation unafraid entree to L1 assets and DeFi liquidity, idiosyncratic accounts connected L1, and immoderate services that unrecorded connected L1, eg. oracles, ENS.
Go-to-market: The branding and reputational benefits from being portion of the Ethereum ecosystem, which has the strongest reputation, information way record, and regulatory acceptance of immoderate L1.

How does Ethereum L1 payment from these relationships? From our acquisition and discussions with stakeholders astir the ecosystem, we judge that positioning Ethereum L1 astatine the centre of a increasing web of L2s reinforces Ethereum and ETH’s unsocial relation successful the onchain economy:

Creating request for ETH, and providing trust-minimized, unafraid bridging betwixt ETH and different assets
- ETH functions simultaneously arsenic a store of value, money, and an exertion passim Ethereum.
Extending web effects astir Ethereum (e.g. EVM, developer education, developer tooling, idiosyncratic onboarding, and interoperability betwixt L2s)
Reinforcing Ethereum’s invaluable presumption arsenic the halfway of a multichain ecosystem, and the superior colony and liquidity furniture of the onchain economy
Providing further concern development, growth, and selling efforts broadly for Ethereum
L2s assistance execute a halfway imaginativeness of the Ethereum ecosystem. By acting arsenic organisation engines (providing other scaling) for Ethereum's halfway properties (security, resilience, and hardness), they assistance to maximize the fig of radical who tin get sustainable worth from Ethereum

The Ethereum ecosystem should not instrumentality these benefits for granted. Some are debated wrong the community, oregon are semipermanent theses that request to beryllium validated done experimentation, measurement, and analysis. Ultimately the L1 <> L2 narration indispensable beryllium mutually beneficial for it to succeed. The archetypal 5 years of this narration person shipped galore successes and cardinal gathering blocks for the future.

What does this mean for L2s going forward

What does this caller imaginativeness mean for L2s, their teams, and their communities?

Here are our recommendations:

L2s should absorption connected strategies that are complementary to L1 and differentiate their platforms. Many L2s are already successfully executing towards this vision. Some person done this with innovative caller features, by targeting circumstantial use-cases (e.g. app chains), supplying caller forms of distribution, oregon with caller go-to-market strategies. This has helped them make their ain chiseled communities and extended the properties of Ethereum to millions of caller users.
L2s should consciousness empowered to differentiate successful immoderate mode they tin imagine. We person already seen differentiation successful scalability, trustlessness, privacy, firm compliance, manufacture sector, community, and a scope of method innovations. Other usage cases that tin relation good arsenic L2s see nationalist bulletin boards for cryptographic e-voting, and certificate transparency.
It is simply a valid prime for L2s to widen each oregon a subset of Ethereum’s properties, depending connected their goals. But they should marque definite the information properties they bash and bash not supply are easy understood by their users.
- L2s moving towards trust-minimization should astatine slightest scope Stage 1 and walk the “walkaway” test, meaning users tin safely exit to L1 adjacent successful the beingness of malicious operators oregon information assembly failure.
- L2s that take to beryllium closest to L1 and afloat inherit its properties should propulsion towards:
  - Achieving Stage 2
  - Synchronous composability (whether read-only eg. L1SLOAD / L1STATICCALL, oregon read-write), some astatine the protocol furniture and astatine the exertion furniture (eg. adjacent if enactment is connected L2, bash idiosyncratic accounts request to beryllium connected L2? Even if trades are connected L1, bash assets request to beryllium issued connected L2?)
  - Becoming a autochthonal rollup (allowing L2s to get escaped of their information councils)
L2s should proceed to enactment connected mechanisms for interoperability and shared liquidity much broadly, strengthening the strategy arsenic a whole. We promote teams to look into the Open Intents Framework and the Fast Confirmation Rule, research designs that provide entree to L1 capital without leaving the L2, and different lend to ongoing synchronous composability workstreams.
L2s should proceed to run transparently, being wide with the ecosystem astir their idiosyncratic information properties and narration to L1 (supported by L2Beat, playing an important relation successful making the L2 ecosystem transparent and ensuring it improves implicit time).

What the EF is doing to assistance physique that world:

To execute this imaginativeness of the L1<>L2 relationship, we cognize the EF has a relation to play. Here’s what we are doing:

Working to some standard the L1 and standard blobs without sacrificing decentralization oregon hardness. Today blobs are lone ~30% full. There is simply a batch of headroom to grow, and we consciousness comfy increasing blobs overmuch much if needed.
Supporting L2s successful peculiar who person oregon privation to deepen beardown properties successful halfway EF domains similar privacy, security, and trustlessness.
The Platform team, led by Josh Rudolf, to amended the Ethereum level arsenic a full and service arsenic an interface betwixt L2s and the halfway protocol roadmap.
Improving liquidity connected L1, and marque it easier for L2s to entree that liquidity (faster finality, withdrawals, and deposits).
Working intimately with L2 teams to recognize their needs and bespeak them successful Protocol priorities, and bringing clarity to the narration betwixt L1 and L2. For this narration to work, we request to recognize what is moving and what is not, and enactment together. The extremity is to ever clarify and fortify the worth proposition of being portion of the Ethereum ecosystem.
Investing R&D towards the exertion that volition alteration “native rollups” -- L2 chains that tin beryllium afloat and trustlessly verified by L1, enabling synchronous composability and unafraid interoperability.
Working intimately with L2Beat and others who assistance to show and validate the information properties of L2s. We indispensable beryllium rigorous and honorable astir the properties of L2s and the grade to which they stock successful L1’s security, truthful that users and builders tin marque informed choices.
Addressing the superior downside of a multichain ecosystem: fragmentation. We volition enactment with the ecosystem (chains, wallets, infra providers) to physique amended interop solutions that hole UX and developer level fragmentation. And present with a clearer imaginativeness for the L1<>L2 relationship, we tin statesman to code the fragmentation of Ethereum’s narrative.