Reassessing the Role of Layer-2 Solutions in the Ethereum Ecosystem
The year 2020 revealed a notable disparity between Ethereum’s market performance and stakeholder expectations, while the subsequent developments in 2021 highlighted a slower-than-anticipated progress toward rollup decentralization. These developments have necessitated a recalibration of the conceptual framework surrounding layer-2 (L2) solutions within the Ethereum ecosystem.
Vitalik Buterin’s recent discourse on Ethereum Research presents a candid assessment of this paradigm shift: the initial characterization of layer-2 blockchains as “branded shards” of Ethereum is no longer tenable, compelling the ecosystem to forge a new trajectory. This transition, however, should not be misconstrued as an abandonment of prior goals. Rather, it constitutes a redefinition of expectations and a more precise delineation of the various constructs that rollups are intended to fulfill.
The pressing inquiry now pertains to the revised job description for these rollups, given that the foundational premises underpinning the rollup-centric roadmap have diminished in robustness.
The Scarcity of Stage 2 Solutions
To elucidate the complexities surrounding rollup decentralization, L2BEAT has established a comprehensive framework categorized by Stages. This system delineates distinct phases of decentralization and governance:
- Stage 0: Represents an environment where foundational controls persist, and trust assumptions remain substantial.
- Stage 1: Indicates partial decentralization, characterized by enhanced escape hatches and proof guarantees but still subject to significant governance oversight.
- Stage 2: Signifies the milestone wherein critical safety properties are codified, thus eliminating reliance on discretionary actors.
The current distribution of value secured across the L2 landscape underscores this dynamic. According to L2BEAT’s rollup scaling summary, approximately 91.5% of the total value is concentrated in Stage 1 rollups, with Stage 0 capturing about 8.5%, while a mere 0.01% resides within Stage 2 frameworks. The leading three rollups account for approximately 71% of total value locked, suggesting that advancements toward Stage 2 are predominantly contingent upon decisions made by a limited number of prominent projects rather than emergent experimental chains.
A pivotal challenge lies in whether existing proof systems can be effectively modified and whether upgrades encounter significant delays and constraints. The prevalence of upgrade discretion among major rollups has hindered progress beyond Stage 1, exhibiting a lag that starkly contrasts with the optimistic projections held during the 2020-2021 period. Some projects have explicitly indicated their intention not to advance beyond Stage 1, citing both technical limitations pertaining to zkEVM safety and regulatory imperatives demanding stringent control measures.
This reflects a legitimate strategic choice for certain market segments but clarifies that such chains do not embody the notion of “scaling Ethereum” as initially envisioned within the rollup-centric roadmap.
Analyzing Changing Constraints
The original thesis articulated in the October 2, 2020 post titled “A Rollup-Centric Ethereum Roadmap,” presented on the Fellowship of Ethereum Magicians platform, outlined dire circumstances necessitating an all-in commitment to rollups as gas prices escalated and certain applications faced operational shutdowns. The conclusion was that base-layer scaling must prioritize data capacity for rollups while user activity increasingly shifts toward L2 solutions.
However, two empirical realities have since emerged:
- First, Layer-1 (L1) execution costs have significantly decreased. Current data from Etherscan indicates an average transaction fee hovering around $0.35, with gas prices plummeting to fractions of a gwei.
- Second, L1 execution capacity is on an upward trajectory; following community consensus in late 2025, Ethereum’s block gas limit was augmented from its longstanding cap of 30 million to approximately 60 million. This enhancement translates into roughly five million gas per second under optimal conditions.
This evolution indicates that the original premise—that “L1 cannot scale for most users”—is becoming less tenable in light of contemporary fee structures. Consequently, L2 solutions can now be viewed as a spectrum offering varying levels of security and autonomy rather than being limited to nearly identical “shards” competing solely on price.
Evolving Perspectives on Layer-2 Solutions
Buterin’s proposed recontextualization positions L2s along an expansive spectrum rather than confining them to a singular model. At one end lie chains that leverage Ethereum’s inherent security while presenting distinctive features; these may include privacy-centric architectures or non-EVM execution environments with ultra-low-latency sequencing capabilities. Conversely, at the other end are options characterized by varying degrees of connectivity to Ethereum—allowing users and applications to select solutions tailored to their specific requirements.
The new baseline criterion is explicit: any solution engaging with ETH or Ethereum-issued assets must achieve at least Stage 1 compliance. Otherwise, such platforms should be regarded as distinct Layer-1 entities equipped with bridging mechanisms. Moreover, differentiation will hinge upon providing unique value propositions beyond mere cost advantages associated with EVM compatibility.
The potential for enhanced interoperability may be facilitated through mechanisms still under exploration; for instance, a proposed “native rollup precompile” could allow Ethereum to verify standard zkEVM proofs directly within its protocol framework. Such advancements could pave the way for synchronous composability—enabling contracts across disparate rollups to interact seamlessly within singular transactions—although this remains largely theoretical at present.
Emergence of Defined Categories
If this reframing gains traction, it is anticipated that rollups will coalesce into more distinct categories:
- Settlement Rollups (Stage 2): These aim for maximal inheritance of Ethereum security through code-enforced guarantees with minimal discretionary governance. Their primary mandate is predicated on scaling Ethereum effectively.
- Regulated Execution Environments: These are designed with compliance and permissioning in mind and may deliberately choose not to progress beyond Stage 1 as part of their operational mandate. Such entities should transparently communicate their governance structure rather than misrepresenting their level of decentralization.
- Specialized Chains: These chains focus on optimizing for attributes such as latency or privacy while catering to non-financial use cases like social identity systems and AI applications. Their justification extends beyond EVM compatibility; they must deliver unique value propositions unattainable through other means.
Projects including Arbitrum One, Optimism, Base, zkSync Era, and Starknet will need to carefully evaluate their strategic positioning within these emerging buckets. The ecosystem possesses sufficient breadth to accommodate all three categories; however, the presumption that every L2 serves an identical purpose is rapidly diminishing.
Implications for Users and Developers
The evolving landscape necessitates that users become more discerning regarding trust guarantees associated with various solutions. Factors such as escape hatches, upgrade delays, proof mechanisms, and censorship resistance will emerge as critical differentiators between products rather than universally presumed attributes.
For developers operating within this domain, reliance on “cheap EVM” structures is increasingly commoditized. Distinction will pivot toward specialized offerings encompassing privacy enhancements, custom virtual machines tailored for specific applications, ultra-low-latency sequencing capabilities, or compliance-focused solutions contoured without disingenuous claims about “scaling Ethereum.”
A broader market narrative is anticipated; discussions regarding whether L2 solutions genuinely inherit Ethereum’s security will intensify amid increasing scrutiny from advocates of alternative Layer-1 platforms. Acknowledgment that many prominent rollups remain entrenched at Stage 1—exhibiting discretionary governance—will lend credence to these critiques.
A New Era for Layer-2 Solutions?
The prospect of an imminent layer-2 revolution within Ethereum appears unlikely; instead, what we are witnessing is a re-tiering of expectations and capabilities among these solutions. The former notion that L2s would manifest as uniform “branded shards” competing predominantly on cost has been undermined by evolving circumstances where L1 has become more affordable and scalable while L2s are diverging in both security models and use cases.
This new paradigm acknowledges an imperative reality: L2 solutions interfacing with ETH or Ethereum-issued assets should satisfy a minimum security threshold—at least Stage 1 compliance—and thereafter should strive for specialization alongside transparent communication regarding their trust models rather than presenting themselves as interchangeable commodities.
The introduction of native verification primitives alongside ongoing explorations into synchronous composability hints at future enhancements that could facilitate such differentiation; however, these remain aspirational outcomes rather than established functionalities at present.
The revised job description delineates clear expectations: provide credible security when managing Ethereum assets while aspiring to excel in specialized domains relevant to user needs—all underpinned by honest engagement with respective trust models.
