Ethereum Co-Founder Weighs in on L3 Debate, Shares Insights and Alternatives

Amidst ongoing discussions on Layer 3 networks in the Ethereum ecosystem, Vitalik Buterin, Ethereum co-founder, has weighed in, expressing his skepticism about their transformative impact on throughput. While acknowledging their potential to reduce fixed costs, Buterin suggests alternative approaches for achieving similar cost savings, citing a previous blog post outlining distinct iterations of Layer 3 solutions, ranging from specialized functionality to customized scaling and low-trust scaling.

Ethereum Co-Founder Weighs In on Layer 3 Debate, Offering Insights and Alternative Perspectives

In the ongoing discourse surrounding Layer 3 (L3) networks in the Ethereum ecosystem, Ethereum co-founder Vitalik Buterin has recently shared his perspectives, contributing valuable insights to the escalating debate.

Buterin's Analysis of L3 Solutions

In a recent X post, Buterin acknowledged that L3 networks do not miraculously enhance network throughput, despite their potential to reduce certain fixed costs associated with deposits, withdrawals, and batch publishing. However, he emphasized that there may be alternative, potentially more efficient techniques to achieve similar cost savings, referencing his blog post from nearly two years ago.

In that blog post, Buterin outlined three distinct iterations of L3 networks within the Ethereum ecosystem:

• Iteration 1: L3s for specialized functionality, while L2s (Layer 2) focus on scaling. This strategy avoids aiming for "scalability squared" and instead employs a single application-scaling layer within the stack, supplemented by additional layers tailored to specific functional requirements of different use cases.
• Iteration 2: L3 for customized scaling, while L2 provides general-purpose scaling. Customized scaling may involve specialized applications that perform computations via methods other than the Ethereum Virtual Machine (EVM) or rollups optimized for specific data formats and applications.
• Iteration 3: L2 for no-trust scaling (rollups), while L3 enables scaling with a low level of trust (Validiums). Validiums rely on a committee or trusted third party to provide data, but utilize SNARKs (succinct non-interactive argument of knowledge) for computation validation. Buterin underscores that Validiums, currently underrated, may prove highly suitable for certain enterprise blockchain applications due to their ability to efficiently handle data commitment using centralized servers.

Escalating Debate on L3 Solutions

Buterin's insights emerge amid growing discussions on the potential impact of L3 networks on the Ethereum ecosystem. Polygon Labs CEO Marc Boiron expressed a pessimistic view, suggesting that L3s could undermine the value of ETH and the L2s they build upon. He argues that the Ethereum ecosystem and the broader crypto space would not significantly benefit from these networks.

Emergence of Degen Chain as a Low-Cost L3 Blockchain

In parallel with the ongoing debate, the Degen ecosystem has launched Degen Chain, a low-cost L3 blockchain built on AnyTrust DA and Arbitrum Orbit. The project, positioned as a memecoin initiative on the Base network, has gained significant traction within the community, attracting approximately 100,000 active accounts within the first week of its launch. Transaction volume also surged, reaching nearly $100 million within 24 hours of its debut.

Conclusion

The layer 3 debate continues to gather momentum, with Ethereum co-founder Vitalik Buterin offering key perspectives and alternative approaches. While L3 networks may offer cost-saving potential, their ultimate value and impact on the Ethereum ecosystem remain subjects of ongoing discussion. The emergence of low-cost L3 blockchains like Degen Chain further adds to the dynamics of this evolving landscape, presenting both opportunities and challenges for the future of Ethereum scaling solutions.