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Home»ETHEREUM NEWS»Is Ethereum Layer-2 the next scam haven? This co-founder asks the tough questions
ETHEREUM NEWS

Is Ethereum Layer-2 the next scam haven? This co-founder asks the tough questions

By Crypto FlexsDecember 21, 20233 Mins Read
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Is Ethereum Layer-2 the next scam haven?  This co-founder asks the tough questions
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Bartek Kiepuszewski, co-founder of L2Beat, a portal for tracking Ethereum layer-2 activity, is concerned about the security and consistency of existing off-chain scaling solutions, suggesting that without fraud protection there is room for fraud and irregularities to arise. .

Focus on optimism and manta: What is happening?

December 20 Go to X, Kiepuszewski observed Some layer 2 solutions, such as Manta and Optimism, use sequencers to publish data to Ethereum. However, without fraud protection, there is no way to verify that the data sequencers publish to the Ethereum mainnet is accurate or complete.

From the co-founder’s perspective, there are no layer 1 state or event changes each time the sequencer publishes a series of transactions to the mainnet. In Kiepuszewski’s assessment, this is a worrying issue that needs to be addressed to ensure that what is published is valid.

As an example, the co-founder cited recent transactions published by Optimism and MantaNetwork, two popular layer 2 scaling solutions for Ethereum. Kiepuszewski analyzed that Optimism recently sent an entire “chunk of data” containing all Layer 2 transactions.

“Data Blob” in Optimism Sequencer | Source: Etherscan

MantaNetwork, on the other hand, reportedly posted the “root hash of the data blob” to CelestiaOrg. The co-founder added that despite this work, the problem is that Ethereum cannot verify whether the hash is valid.

The co-founders argue that this could be the cause of the problem, as the lack of transparency into Sequencer’s operations is a huge concern, especially for users who track the mainnet but do not operate layer 2 nodes.

Ethereum Layer-2 controls billions of dollars without a functional anti-fraud system.

As it stands technically, the sequencer plays a critical role in ensuring that transactions submitted by users of layer 2 scaling platforms such as Optimism or Arbitrum are processed and valid before being sent to the Ethereum mainnet.

Arbitrum price upward trend on daily chart |  Source: ARBUSDT on Binance, TradingView
Arbitrum price upward trend on daily chart | Source: ARBUSDT on Binance, TradingView

However, while Ethereum layer-2 scaling solutions currently manage over $15 billion based on L2Beat data without public fraud protection, it is unclear what sequencers publish to the mainnet.

According to L2Beat data, Manta Network turned off its anti-fraud features while it was being developed at Optimism. At the same time, Arbitrum’s anti-fraud system is still not permissionless, as validators must be whitelisted.

The Ethereum layer lacks a perfect system |  Source: L2Beat
The Ethereum layer lacks a perfect system | Source: L2Beat

Most major layer 2 protocols, which collectively manage millions of dollars of total value locks (TVLs), do not have sequencers and public systems to monitor whether they are submitting valid details to the mainnet.

Featured image from Canva, chart from TradingView

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