After years of improvement, Ethereum, the world’s largest smart contract platform, is expanding. But it doesn’t scale in the way most decentralization purists would like. Networks seeking to accommodate all users now rely primarily on off-chain solutions that use rollup technology to process more transactions and relieve the mainnet.
Ethereum Layer-2 Boom
The result is a boom in layer 2 platforms. According to L2BeatAll of these off-chain solutions that scale Ethereum manage over $37 billion in assets. The largest of them is Arbitrum, which controls more than $13 billion.
Despite the boom, problems with decentralization remain. Arbitrum, Base, and other layer 2s on Ethereum may be of interest, but most are not yet decentralized.
For example, if a developer fails to release a decentralized fault tolerance system or sequencer, it becomes a weakness in the broader Ethereum ecosystem.
According to public data, Arbitrum has a licensed defect prevention system in place, and Optimism was required to withdraw after the defects were revealed through an audit. In all Layer 2 settings, a fault-tolerant system exists to ensure that all transactions sent to the sequencer are valid, as if they were sent from the mainnet.
From defect prevention to batch processing, ordering is determined and confirmed on the mainnet. A fee is paid each time an Ethereum validator completes this batch of transactions.
Should L2 buy decentralization from mainnet validators?
The problem is that fees have fallen rapidly over the past few months since Dencun went live. This trend suggests that low gas fees may discourage validators in the rapidly growing Layer 2 ecosystem. While this is a concern, token terminal analysts be sure This is about to change.
According to their predictions, all Ethereum Layer 2 will eventually have to “buy” decentralization from mainnet validators. The good news is that there are many to choose from. According to Beacon ChineOver one million validators secure the blockchain.
Token Terminals could choose to build one, but they argue that creating a complex web of a decentralized network of layer 2 validators would be resource-intensive.
For this reason, it is possible to purchase decentralization from a subset of Ethereum layer 1 validators. If selected, these validators will negotiate better fees than the network offers, significantly increasing their profits.
At the same time, as demand for layer 2 decentralized solutions grows, the flow of validators will also surge.
Featured image from Canva, chart from TradingView