The L2 compromise is broken, it’s time for a better foundation

The second quarter of 2025 was a actuality verify for blockchain scaling, and as capital continues to movement into rollups and sidechains, the cracks within the layer 2 mannequin are widening. The unique promise of L2s was easy: scale L1s, however the prices, delays, and fragmentation in liquidity and person expertise proceed to pile up.

New initiatives like stablecoin funds are beginning to query the L2 paradigm, asking if L2s are actually safe, and are their sequencers extra like single factors of failure and censorship? Usually they may find yourself taking a pessimistic view that maybe fragmentation is solely inevitable in web3.

Are we constructing a future on a stable basis or on a home of playing cards? L2s should face and reply these questions. If Ethereum’s (ETH) base consensus layer had been inherently quick, low-cost, and infinitely scalable, the complete L2 ecosystem as we all know it could be redundant. Quite a few rollups and sidechains had been proposed as “L1s add-ons” to alleviate the elemental limitations of the underlying L1s. It is a type of technical debt, a posh, fragmented resolution that has been handed over to web3 customers and builders.

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And to reply these questions it’s essential to deconstruct the complete idea of an L2 into its elementary parts, to disclose a path to a extra strong and environment friendly design.

An anatomy of L2s

Construction determines perform. It’s a fundamental precept in biology that additionally applies to laptop techniques. To find out the suitable construction and structure of L2s, we should fastidiously look at their capabilities.

At its core, every L2 performs two essential capabilities: Sequencing, i.e. ordering transactions; in addition to calculating and proving the brand new state. A sequencer, whether or not a centralized entity or a decentralized community, collects, orders, and batches person transactions. This batch is then executed, leading to an up to date standing (e.g. new token balances). For safety causes, this standing have to be settled on the L1 through Optimistic or ZK Rollups.

Optimistic rollups assume that each one standing transitions are legitimate and depend on a problem interval (typically seven days) throughout which anybody can submit proof of fraud. This creates a significant UX trade-off and lengthy finality instances. ZK Rollups use zero-knowledge proofs to mathematically confirm the correctness of every state transition earlier than it reaches L1, enabling near-instant finality. The drawback is that they’re computationally intensive and complicated to construct. ZK proofs themselves can include errors, which may result in catastrophic penalties, and formal verification of this, if in any respect possible, may be very costly.

Sequencing is a governance and design alternative for each L2. Some desire a centralized resolution for effectivity (or maybe for censorship energy; who is aware of), whereas others desire a decentralized resolution for larger equity and robustness. Finally, L2s determine how they wish to do their very own sequencing.

Producing and verifying state claims is the place we are able to do a lot, significantly better when it comes to effectivity. As soon as a set of transactions has been sequenced, calculating the subsequent state is a purely computational job, and that may be finished utilizing only a single supercomputer, centered solely on uncooked velocity, with out the overhead of decentralization. That supercomputer may even be shared between L2s!

As soon as this new state is claimed, its verification turns into a separate, parallel course of. An enormous community of verifiers can work in parallel to confirm the declare. That can also be the philosophy behind Ethereum’s stateless purchasers and highly effective implementations, corresponding to MegaETH.

Parallel verification is infinitely scalable

Parallel verification is infinitely scalable. Irrespective of how rapidly L2s (and that supercomputer) produce claims, the verification community can all the time catch up by including extra verifiers. The latency right here is exactly the verification time, a hard and fast, minimal quantity. That is the theoretical optimum when you use decentralization successfully: to confirm, to not calculate.

After sequencing and standing verification, the L2’s job is nearly full. The ultimate step is to publish the verified standing to a decentralized community, the L1, for final settlement and safety.

This final step exposes the elephant within the room: blockchains are horrible settlement layers for L2s! The primary computing work is finished off-chain, however L2s must pay an enormous premium to finish an L1. They face a double overhead: the restricted processing capability of the L1, burdened by the whole, linear ordering of all transactions, creates congestion and excessive information posting prices. Moreover, they need to endure the L1’s inherent finality delay.

For ZK Rollups that is minutes. For Optimistic Rollups, this includes a weeklong problem interval, a crucial however pricey safety trade-off.

Goodbye, the ‘complete order’ fable in web3

Ever since Bitcoin (BTC), folks have finished their greatest to squeeze all of the transactions of a blockchain into one complete order. In spite of everything, we’re speaking about blockchains! Sadly, this “complete order” paradigm is a pricey fable and clearly exaggerated for L2 settlement. How ironic it’s that one of many world’s largest decentralized networks and the world’s laptop behaves identical to a single-threaded desktop!

It is time to transfer on. The longer term is native, account-based ordering, the place solely transactions that work together with the identical account should be ordered, permitting for top parallelism and true scalability.

World order clearly implies native order, however additionally it is an extremely naive and simplistic resolution. After 15 years of ‘blockchain’, it is time we open our eyes and create a greater future. The scientific area of distributed techniques has already moved from the sturdy consistency idea of the Nineteen Eighties (which blockchains implement) to the sturdy remaining consistency mannequin of 2015 that unleashes parallelism and concurrency. Time for the web3 business to maneuver on as nicely, go away the previous behind and comply with future-oriented scientific progress.

The period of the L2 compromise is over. It is time to construct on a basis designed for the long run, from which the subsequent wave of web3 adoption will emerge.

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