Ethereum Foundation Announcement: Redefining the Roles of L1 and L2, Building the Ultimate Ethereum Ecosystem Together

Original Title: How L1 and L2s can build the strongest possible Ethereum

Original Authors: Josh Rudolf, Julian Ma, Josh Stark, Ethereum Foundation

Original Compilation: Chopper, Foresight News

The ultimate goal of the Ethereum Foundation’s Platform team is to drive Ethereum to achieve scalable expansion as a unified collaborative system, allowing all users to use it with peace of mind.

This article aims to share our perspective on the relationship between L1 and L2, elucidate the role of each layer, and how we (as an ecosystem) can leverage the advantages of L1 and L2 to create the most attractive platform for all users.

Some of these ideas are already quite clear, while others need to be validated through ongoing experimentation and iteration with the community and users.

TL;DR

Goal: All individual and institutional users should have clear pathways to utilize, expand, and benefit from the core attributes provided by Ethereum.

The best way to achieve this goal is to fully leverage the unique functionalities of each layer, reinforcing Ethereum’s core attributes and releasing meaningful value for end users through these attributes.

As the Ethereum ecosystem evolves, the roles of each layer also change:

• In the past: The primary mission of L2 was to assist Ethereum in scaling, with the second being to provide differentiated and customized space. Scalability was key.

• Today: The primary mission of L2 is to achieve scalability while providing differentiated features, services, customized solutions, marketing strategies, and control areas. Currently, the biggest drivers are differentiation, control, and innovation.

• L1 as a truly permissionless and highly flexible global settlement, shared state, liquidity, and DeFi hub. A powerful, scalable L1 layer that does not compromise on CROPS (Censorship Resistance, Open Source, Privacy, and Security) provides a better foundation for L2.

• L2 offers valuable new features, customization, and control to develop its own on-chain economy while extending Ethereum’s core attributes to more users. Strong L2 networks strengthen the Ethereum ecosystem and its focus.

• L2 encompasses all aspects and establishes differentiated binding relationships with L1 according to its needs:

  • Those L2s seeking the closest integration with L1 should strive for synchronous composability, complete interoperability, shared liquidity, and native Rollup mechanisms.

  • L2s with various business models or technical expertise will continue to play important roles in the ecosystem, providing exclusive capabilities that L1 cannot cover.

The Ethereum Foundation (EF) will continue to develop underlying technologies to help L2 seamlessly extend L1’s native features, securely bridging cross-layer and cross-chain liquidity and asset interoperability; at the same time, requiring L2s to be open and transparent, clearly stating their security attributes and verification standards.

In short, both parties play important roles, and their actions must align.

Introduction

Over the past five years, a vast L2 ecosystem has emerged around Ethereum L1. Various L2s inherit different native characteristics of Ethereum: some fully replicate decentralized architectures (such as Stage 2 Rollup), some inherit partial security features (such as Validium, Prividium), while others merely comply with general EVM standards (not strictly L2).

Many chains are still in development; they usually start as independent chains and gradually integrate deeply into the Ethereum L1 ecosystem. It is time for the Ethereum Foundation (EF) and the broader Ethereum ecosystem to update our understanding of the relationship between L1 and L2 networks. The last major update was five years ago when the Rollup-centric roadmap was first proposed as a way to scale Ethereum.

Since then, a lot has changed. The technologies that enable L2 to share Ethereum’s security and liquidity and interoperate with it have matured; the competitive differentiation and user value of L2 have become increasingly prominent; L2s have grown and nurtured independent community ecosystems; and the scaling roadmap for L1 has also evolved and become clearer.

The Ethereum ecosystem needs to acknowledge these changes and learn from past successes and failures.

In recent months, the future development direction of the relationship between Ethereum L1 and L2 has gradually become clearer:

• A thriving Ethereum ecosystem must be built on a strong L1 foundation.

• Ethereum L1 will achieve orders of magnitude expansion while maintaining the highest levels of security and decentralization, continuing as the core of the on-chain economy and the center of DeFi.

• In the future, there will be an ecosystem composed of independent and interoperable L2 chains that will offer higher levels of customization, control, and functionality that L1 cannot provide. These L2 chains choose to root themselves in the Ethereum ecosystem because it is the best option for their users, communities, or enterprises.

• L2 chains will both compete and collaborate to provide a variety of specialized block spaces, services, and assets.

This article aims to explain in more detail the symbiotic vision of L1 and L2 and to establish pathways for mutual promotion between Ethereum L1 and any chain that wants to root itself and become part of the ecosystem.

What roles do L1 and L2 play, and how do they work together?

Ethereum L1 is the world’s leading programmable blockchain, unmatched by any other blockchain in user adoption, developer ecosystem, decentralization, resilience against risks, and underlying stability. Ethereum L1 is the core of the DeFi ecosystem, aggregating the deepest liquidity across the network. Ethereum L1 now has a clear scaling path while maintaining decentralization and security. Thanks to the collective efforts of many teams within the Ethereum ecosystem, the development speed of zero-knowledge proof (ZK) technology has exceeded expectations.

In the coming years, we will be able to significantly increase the capacity of Ethereum L1 while adhering to its core values.

At the same time, no single public chain can meet the diverse on-chain economic demands of the global market. Even if Ethereum remains dominant in the future and its scaling capabilities increase by 1000 times, there will still be many different chains because they provide specialized and customized services that L1 cannot offer:

• Specialization for specific applications or use cases

• Non-EVM functionalities

• Additional privacy protections

• Pricing mechanisms or transaction inclusion logic

• Ultra-low latency or other ordering features

• Extreme scaling characteristics of L1 that cannot be matched

• Specialized economies, market entry strategies, and growth methods

• Modular designs to meet compliance or other business needs

• Other improvements or innovations that can iterate and deliver faster than L1

This provides an opportunity for L1 and L2 to establish a mutually beneficial relationship, allowing both to focus on complementary roles.

Why are other independent public chains willing to become L2s of Ethereum?

• Low costs. Compared to independent underlying public chains, L2 replicates Ethereum’s top security and decentralization at a very low threshold; building a global decentralized validation node is costly, time-consuming, and challenging. L2 can shift this responsibility to Ethereum L1, paying as needed without incurring high fixed setup costs.

• Users and developers. Achieving interoperability with the largest L1 and L2 cluster in the network allows access to more users and developers; with the maturity of zero-knowledge proof technology, real-time proofs, faster L1 finality, L2 settlement, and proxy infrastructure, interoperability and cross-chain user experience will accelerate development.

• Interoperability. When designed properly, L2 can securely access L1 assets and DeFi liquidity, user accounts on L1, and any services on L1, such as oracles and ENS.

• Marketing. Being part of the Ethereum ecosystem brings branding and reputation advantages; the Ethereum ecosystem has the best reputation, security record, and regulatory recognition among all L1s.

What can Ethereum L1 gain from this? Based on our experience and discussions with various stakeholders in the ecosystem, we believe that positioning Ethereum L1 at the core of the growing L2 network can strengthen Ethereum and ETH’s unique standing in the on-chain economy:

• Create demand for ETH and provide trust-minimized, secure bridging services between ETH and other assets. ETH plays the roles of value storage, currency, and more in the Ethereum network.

• Expand Ethereum’s network effects (e.g., EVM, developer education, developer tools, user onboarding, and interoperability between L2 layers)

• Solidify Ethereum’s important status as the core of a multi-chain ecosystem and the primary settlement and liquidity layer of the on-chain economy.

• Provide broader business expansion, growth, and marketing support for Ethereum.

• L2s help realize the core vision of the Ethereum ecosystem. They serve as distributed engines for Ethereum’s core attributes (security, resilience, and stability), maximizing the number of users who can derive sustainable value from Ethereum.

The Ethereum ecosystem should not take these advantages for granted. Some of these advantages remain contentious within the community, or require long-term theories to be validated through experimentation, measurement, and analysis. Ultimately, the relationship between L1 and L2 must be mutually beneficial to succeed. Over the past five years, this relationship has achieved many accomplishments and laid a crucial foundation for the future.

What does this mean for the future development of L2?

What does this new vision mean for L2-level users, their teams, and their communities?

Here are our suggestions:

• L2s should focus on strategies that complement L1 and achieve platform differentiation. Many L2s have successfully moved toward this vision. They achieve this by implementing innovative features, targeting specific use cases (such as application chains), providing new distribution methods, or adopting novel marketing strategies. This has helped them create unique communities and expand Ethereum’s features to millions of new users.

• L2s should have the right to achieve differentiation in various ways according to their own imaginations. We have seen differentiation emerging in scalability, trustlessness, privacy, enterprise compliance, industry sectors, community, and a range of technical innovations.

• L2s can choose to extend all or part of Ethereum’s attributes based on their goals. But they should ensure that users can easily understand the security attributes they provide and do not provide. L2s dedicated to minimizing trust should at least reach Stage 1 and pass the “exit” test, meaning that even in the presence of malicious actors or security committee failures, users can safely exit to L1. L2s that choose to be closest to L1 and fully inherit its attributes should strive toward these directions:

  1. Achieve Stage 2;

  2. Synchronous composability;

  3. Become native Rollups.

• L2s should continue to work on building broader interoperability and shared liquidity mechanisms to enhance the entire Ethereum ecosystem.

• L2s should operate transparently, clearly indicating their respective security attributes and their relationship with the L1 security layer to the ecosystem.

What contributions is the Ethereum Foundation making towards building such a world?

To realize the vision of the L1<>L2 relationship, the Ethereum Foundation is fully advancing the following work:

• We are committed to expanding both the L1 layer and the blob without sacrificing decentralization. Currently, the blob’s fill rate is only about 30%, leaving significant expansion space; if necessary, we can confidently expand the blob further.

• We particularly support those L2s that have or wish to deepen their capabilities in privacy, security, and trustlessness.

• The Platform team led by Josh Rudolf aims to improve the overall performance of the Ethereum platform and serve as an interface between L2s and the core protocol roadmap.

• Increase L1’s liquidity, making it easier for L2 to access liquidity (faster final confirmations, withdrawals, and deposits).

• Work closely with L2 teams to understand their needs and reflect them in protocol priorities, while clarifying the relationship between L1 and L2. To ensure this relationship functions effectively, we need to understand what works, what needs improvement, and collaborate. Our goal is always to clarify and strengthen the value proposition of being part of the Ethereum ecosystem.

• Invest in research and development to achieve “native Rollup” technology, which allows L1 to fully and trustlessly verify L2 chains, achieving synchronous composability and secure interoperability.

• We collaborate closely with L2Beat and other organizations to monitor and verify the security features of L2. We must rigorously and honestly assess the properties of L2 and their relationship with L1 security so that users and developers can make informed choices.

• Address the main drawbacks of a multi-chain ecosystem: fragmentation. We will work with the ecosystem (including various chains, wallets, and infrastructure providers) to build better interoperability solutions to resolve the issues of fragmentation in user experience and developer platforms. Now, with a clearer understanding of the relationship between L1 and L2, we can begin to address the fragmentation of Ethereum narratives.

We will work together to build a global, permissionless on-chain economy and provide the best platform for all users.