Opinion by: Steven Pu, co-founder of Taraxa
The rollup-based layer 2s which are all the fashion at present are destroying crypto or, extra exactly, the very trustless nature of crypto, by quickly eroding its decentralized trustlessness.
Crypto’s uniqueness comes from its trustlessness, powered by the underlying infrastructure primarily in layer 1s. The one method to be actually trustless is to be absolutely decentralized, the place choices are made dispassionately by a big and randomized set of nodes from all the world over, operated and owned by individuals who, in mixture, have little to no connections.
That decentralization hinges on three pillars: inclusion, ordering and execution. A community is simply as decentralized as its weakest pillar. When any of them is handed to a single determination‑maker, the “trustless” label turns into a advertising stunt, and rollups fracture all three concurrently.
Rollups present no decentralized ensures on inclusion and ordering and, within the case of optimistic rollups, no assure on execution correctness both. Rollup L2s are completely a scourge to crypto.
Rollup L2s are quickly eroding belief in crypto
There are two broad kinds of rollup L2s at present: optimistic and zero-knowledge (ZK). Each are dominated by networks the place a single sequencer makes all the choices. Since having a single entity for this significant process is an issue, these rollups do make some feeble makes an attempt at implementing correctness, however solely by way of execution.
Optimistic rollups depend on a weeklong “problem interval,” a ticking clock that invitations chaos. Tens of millions of transactions will unwind if only one fraudulent proof sticks, locking capital and confidence for days.
For ZK-rollups, they do assure executional correctness by way of ZK-proofs.
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However an ideal proof of execution is ineffective when a lone sequencer can merely refuse, delay or reorder transactions to its benefit. With out public, immutable data of who tried to transact and when, censorship can’t be confirmed and, subsequently, can’t be punished.
If a community can’t assure transparency, equity and correctness for inclusion and ordering, what good is a assure on execution? Since you may solely execute what’s being included and ordered, execution basically relies upon upon inclusion and ordering. Not having any ensures on inclusion and execution makes ensures on execution untrustworthy.
Markets are noticing this. Liquidity is splintering throughout bridges that inherit every rollup’s weakest‑hyperlink assumptions. The ensuing net of custodial multisigs and emergency‑pause switches creates systemic threat that merchants at the moment are pricing into asset valuations. If the low cost for “sequencer threat” widens additional, Ether’s financial premium will undergo.
Decentralizing L2s merely turns them into L1s
A typical fallback counter to the truth that L2s are a centralized mess is that they’ll be decentralized at a future date. This can be a self-defeating argument.
In case you take an L2 and switch it into a very decentralized community of sequencers, whereby the sequencers collaborate utilizing a decentralized consensus to supply sturdy ensures on inclusion, ordering and execution, what do you get? You find yourself with an L1.
Anybody arguing that L2s can ultimately be decentralized is saying they’ll flip into L1s sooner or later, leaching liquidity, charges and complete worth locked (TVL) away from the L1 (principally Ethereum) they’re purported to assist scale.
The incumbents operating at present’s worthwhile single‑sequencer stacks would hardly see any incentive to dilute their energy.
The way in which to scale Ethereum is to… scale Ethereum
Ethereum doesn’t should be sluggish and costly. Many more recent consensus designs on mainnets will be referenced to enhance the community’s technical functionalities.
With a TVL quickly approaching $100 billion, it’s completely affordable that Ethereum builders can be additional cautious when implementing elementary adjustments to the community’s core structure. Nonetheless, energetic progress must be made towards scaling Ethereum itself, not solely centered on these parasitic L2s, that are role-playing as decentralized networks.
Funding key upgrades on manufacturing, execution and consensus would reinforce Ethereum’s neutrality, protect its charge income and restore person confidence with out the bridge-risk tax rollups imposed.
Let’s ditch the L2s and make scaling the Ethereum L1 a precedence.
Opinion by: Steven Pu, co-founder of Taraxa.
This text is for basic info functions and isn’t meant to be and shouldn’t be taken as authorized or funding recommendation. The views, ideas, and opinions expressed listed below are the creator’s alone and don’t essentially mirror or characterize the views and opinions of Cointelegraph.
