Empowering Blockchain’s Future with Layer-2 Rollup Decentralisation

It is rumoured that the complete decentralisation of Ethereum layer 2s is expected to occur within a few years. However, several elements, including the need to apply user experience and security enhancements, have hampered the aim of decentralisation. The teams said these networks are already decentralized, and “Stage 2” will be attained shortly.

“Stage 2 decentralization” is the last stage of Ethereum founder Vitalik Buterin’s set of layer-2 decentralization benchmarks. It is also known as “complete decentralization since it would theoretically make censorship almost impossible on the networks.

Ethereum layer 2s are networks that aim to scale Ethereum by compressing and confirming Ethereum transactions on distinct networks.

According to Linea founder Nicolas Liochon, most L2s should have attained Stage 2 of decentralization within the next two years.

“Rollups prioritized other important upgrades which directly impact the user experience and security,” Liochon stated. “For example, the Dencun upgrade has lowered costs by an order of magnitude for users.”

Although these improvements have been implemented, advancement toward Stage 2 “has started.” Liochon claims that the project intends to release a testnet that includes fresh decentralizing capabilities “in the coming months.”

Anthony Rose, the chief technical officer of zkSync developer Matter Labs, anticipates the dominant L2s entering Stage 2 “over the next two to three years.”

Rose hopes for some space consolidation. More than 20 L2s have combined in total value locked (TVL), right now. In the future, though, “we will see a rather small number of very large networks.” These networks will consist of several distinct chains, most of which will be dispersed.

“These systems can leverage some things to perform, so I think we will see the big ones that exist today, such as stage two, disposing of their training wheels over the next two to three years.”

The Phases Of Decentralisation

From Buterin’s November 2022 post, “Proposed milestones for rollups taking off training wheels,” the idea of “stages” of decentralization originates In the essay, Buterin proposes that, as long as layer-2 rollups aim toward decentralizing over time, they could debut with temporary “training wheels,” in the form of centralized control.

Buterin noted three phases of decentralisation. If a network is to be characterized as such, it must offer tools capable of independently computing the state of a “Stage 0 roll-up.” Still, the development team can restrict Ethereum withdrawals by uploading bogus state roots, hence sensitizing transactions.

The network must have included fraud or validity proofs in its Ethereum smart contracts if it is to be labelled as a “Stage 1 roll-up”. Consequently, the sequencer of the team cannot publish bogus state roots since these will be deemed invalid.

Stage 1 networks are permitted, in the meantime, to have a security council capable of superseding legitimate transactions. Executing an override calls for the council to act explicitly, and only with six of eight votes from it can this be accomplished. Two minimum council members do not have to be from the development team.

The security council cannot supersede the network’s fraud proofs in a Stage 2 roll-up unless these proofs contradict one another or unless the network has not transacted for at least seven days. Based on Buterin’s standards, the blockchain analytics tool L2Beat routinely assesses and ranks L2 networks.

Conclusion

In conclusion, the journey towards decentralization for Layer-2 (L2) scaling solutions is well underway, marked by significant advancements and future aspirations. According to industry leaders like Linea founder Nicolas Liochon and Matter Labs’ Anthony Rose, key L2 platforms are progressing toward Stage 2 decentralization. Recent upgrades, such as the Dencun protocol’s cost reductions and enhanced user security, underscore the progress made. The path forward involves the rollout of testnets with expanded decentralizing capabilities, anticipated within the coming months. As more L2 networks consolidate and evolve, the vision of fewer, more robust networks comprising various interconnected chains appears increasingly likely, signalling a maturing landscape poised for continued innovation and scalability in blockchain technology.