The Evolution of Ethereum 2.0: Layer 2 May Become a Long-Term Infrastructure

The Ethereum 2.0 beacon chain officially launched its genesis block at 8 PM on December 1, marking an important milestone for the Ethereum community. The official launch of Ethereum 2.0 signifies the acceleration of Ethereum's transition from PoW to PoS, further advancing the vision of dozens of times scalability.

However, the expected multi-year implementation cycle of Ethereum 2.0, the frequently changed roadmap, and the controversial migration costs mean that this "fundamental transformation" major upgrade still faces many challenges. At the same time, the Ethereum community has seen the emergence of various Layer 2 solutions such as Rollup, Plasma, and Validium, each with certain advantages in terms of scalability, implementation cycle, and engineering difficulty.

In the medium to short term, Layer 2 seems to be a more attractive scaling solution and may even become a long-term solution in the future evolution of Ethereum. This article will explore the necessity and value of Layer 2 in the context of Ethereum 2.0, as well as the advantages and disadvantages of Layer 2 solutions and the current state of the ecosystem.

Layer2 may become an "add-on" to Ethereum infrastructure

For a long time, Layer 2 has been regarded as a transitional solution for public chains to mature, serving as an "extension" when the main chain's performance is insufficient to support high concurrent processing. However, the core development team of Ethereum has now confirmed that the priority of the Layer 2 solution Rollup should be higher than the originally planned sharding solution. Vitalik has made it clear:

1. No longer emphasizing the importance of Phase 2 for the time being, Phase 1 is dedicated to achieving data sharding for rollup use;
2. The Beacon Chain will have execution capabilities. After the Eth1-Eth2 merge, Beacon Chain blocks will directly include transactions;
3. The three major tasks after the implementation of Phase 0: light client support, data sharding, and merging will be advanced in parallel, and any module that is ready will be launched.

This reflects the awkward situation of the core story of 2.0 "sharding". As a project that is expected to take at least 2-3 years to materialize, sharding is currently estimated to bring a maximum of 64 times the TPS improvement to the Ethereum network. In contrast, the existing Layer 2 star solution Rollup can achieve an improvement of up to 100 times. Compared to this, the strategic value of Layer 2 is self-evident, which is also the core reason for the adjustment of Ethereum's roadmap.

In addition to technical indicators, the design philosophy between Layer 2 and Layer 1 is also a key factor in the important position of Layer 2. Vitalik once pointed out that the general idea in the blockchain field is to keep Layer 1 as simple as possible and build more complex functions on top of it through Layer 2. This is because changes at the infrastructure level (Layer1) are difficult and can easily lead to systemic harm. Therefore, in the short term, Ethereum needs to develop Layer 1 and Layer 2 in parallel; in the long term, more attention needs to be paid to Layer 2.

Applying this design philosophy to the relationship between ETH2.0 and Layer2, we can infer that Ethereum and Layer2 should maintain a long-term coexistence relationship rather than a short-term auxiliary one. Especially considering that many Layer2 solutions currently receive significant public support, such as Uniswap and Synthetix supporting the Optimistic Rollup solution, and Curve supporting the ZK Rollup, these are not only flagship applications of the Ethereum ecosystem at present but also the infrastructure that will support higher-level and more complex gameplay in the future. Their attitudes actually influence the position of Layer2 in the Ethereum ecosystem.

A certain professional has a vivid analogy for this issue: "Vitalik compares Ethereum to a Swiss Army knife that he created for the blockchain industry. Even though it is a powerful and versatile toolkit, it is absolutely not enough for a chef to only use a Swiss knife in the kitchen. This is not to say that the Swiss knife is not useful, but it is indeed not sufficient."

Layer2 solutions each have their own strengths, Rollup has the most potential.

The most significant feature of Layer 2 is that it does not have tight coupling, meaning that the validity of the "beacon chain" in the main chain ( Ethereum 2.0 is not inseparably linked to the validity of the subchain. In other words, subchain blocks that include invalid main chain blocks and main chain blocks that include invalid subchain blocks are, by definition, out of sync.

Currently, there are mainly 6 solutions for Ethereum Layer 2, which are state channels, sidechains, Plasma, Validium, ZKRollup, and Optimistic Rollup. Different Layer 2 solutions vary in aspects such as whether they are custodial, whether they perform on-chain computation, whether they use on-chain storage, and whether they use fraud proofs or zero-knowledge proofs.

For DApp projects based on Ethereum, it may be the right choice to select Layer 2 solutions based on demand in the uncertain Layer 2 ecological landscape, and it is even possible to use multiple solutions simultaneously for different needs in the same scenario.

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From the current discussions in the Ethereum community, the Rollup solutions, which are generally supported by major companies, have rapid development progress and ideal scalability, are the most likely to emerge first and receive widespread support. Notably, Optimistic Rollup is expected to receive more support, mainly due to the backing of DeFi giants. Synthetix has already confirmed its adoption of the Optimistic Rollup solution and is advancing related integration work. DeFi "leader" Uniswap has also opened the Unipig DEx demo based on this solution for user experience on its official website, and the oracle leader Chainlink is also expected to adopt Optimistic Rollup.

The benign and orderly competitive state of Layer 2s and their potential widespread use cases are commendable, but this also brings a new major issue: the composability of DeFi will be significantly weakened. Taking the highly praised Rollup as an example, the two solutions, ZK and Op, are currently not interoperable, which means that the already fragmented liquidity will be further exacerbated. However, for the overall DeFi landscape, Lego blocks are not only the foundation but also a higher-dimensional integration should be the essence of Layer 2.

In summary, the evolution of Ethereum 2.0 is undoubtedly a path full of exploration and change, and it is believed that the Ethereum community will likely continue to adjust the roadmap in subsequent meetings. However, it is certain that as the Ethereum ecosystem increasingly becomes a vast ecosystem, the possibility of fundamental transformations becomes smaller. In this context, Layer 2 will be its long-term partner and infrastructure.

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