The article opens with a humorous observation that in 50 years, people may reminisce about the days when Layer 1 transactions cost less than $100. This underscores a growing problem: Ethereum fees spike dramatically during high-demand periods like new mint launches or memecoin trends, making it impractical to scale to a global computer without Layer 2 solutions.
What Are L2s?
Layer-2s address the blockchain trilemma — the challenge of simultaneously achieving decentralization, security, and scalability. While Ethereum excels at decentralization and security, it struggles with scalability.
How they work: L2s bundle transactions into single data pieces sent to the mainchain, reducing required computing power. Rollups are like having an assistant who sorts and prepares all your paperwork to the degree where you (the L1) just have to sign the final version.
Two main types:
- Optimistic rollups: Assume transactions are valid by default, with a challenge period to prove dishonesty
- ZK rollups: Use zero-knowledge proofs to confirm computation compliance with consensus rules
Why Everyone Is Launching L2s
Multiple factors drive L2 proliferation:
- Increased modularity: Chain-building kits like OP Stack and Polygon CDK make development easier
- Specialization: Different L2s focus on specific areas — privacy, DeFi, compliance, gaming
- Geographic optimization: Similar to regional payment providers, L2s may localize by region
- Market opportunity: The free market creates competition and user choice
- Design flexibility: Decoupling execution from consensus enables innovation (example: Eclipse runs Solana’s Virtual Machine on Ethereum)
Examples of L2 Specialization
- Manta Network: Focuses on DeFi, particularly liquid staking derivatives
- Kroma: First OP rollup with validity proofs; strong Asian market presence and gaming expertise
- Etherlink: First enshrined L2 on Tezos with decentralized sequencing and censorship resistance
- NEON: Leverages Solana’s parallelization to overcome EVM’s sequential execution bottleneck
The Centralized Sequencer Problem
A critical issue emerges: most L2s use centralized sequencers, creating a single point of failure. Sasha from Etherlink notes: “So much TVL is in rollups with centralized sequencers when we are building a censorship-resistant future of finance.”
Sequencers’ role: They receive, organize, and execute transactions before block inclusion.
Alternatives exist: Some L2s use their underlying L1 for sequencing (NEON relies on Solana; Etherlink uses Tezos mainnet), though this reduces cost savings on Ethereum-based solutions.
Decentralizing Sequencers
Decentralization sits on most L2 roadmaps. Projects like Espresso and Astria develop shared sequencing solutions allowing multiple rollups to share a sequencing network.
Benefits include:
- Immutability
- Censorship resistance
- Resilience
- Reduced intermediaries
Future Outlook
The Dencun upgrade reduced L2 data storage costs, yet Base’s gas fees still reached $10 shortly after due to increased demand, suggesting blobs alone aren’t sufficient. Alternative data availability solutions like Celestia gain traction.
Emerging trends:
- Bitcoin L2 ecosystem growth
- Enshrinement (protocol-level integration)
- Centralized prover networks becoming shared infrastructure across ZK rollups
Recommendations for L2 Builders
The article concludes with practical advice from active L2 developers:
- Focus on solving genuine problems rather than following trends
- Consider Ethereum DA costs for projects with low traffic
- Prioritize decentralization in design
- Embrace the development journey