Ethereum Layer2 Fragmentation Touted as the Future of Ethereum Blockchain

The crypto community widely acknowledges that the Ethereum blockchain is highly regarded, although it does have its imperfections. Most Ethereum Virtual Machine (EVM) developers agree that a fast and scalable execution layer at layer-1 (L1) would significantly reduce the necessity for layer-2 (L2) solutions. However, it is clear that the future of Ethereum is closely tied to the development and adoption of Layer 2 solutions.

Although L2s have proven to be effective in accelerating transactions, reducing gas fees, and increasing transaction volumes, these benefits have a downside. This downside is the fragmentation caused by multiple L2 blockchains operating independently.

There are currently 46 different L2 solutions ranked on CoinGecko’s list of off-chain vertical scaling protocols. These solutions are designed to enhance Ethereum’s scalability without compromising security or decentralization.

Nevertheless, the wide range of L2 options may lead to challenges in interoperability, isolated innovation, and unsatisfactory user experiences. When the original L1s were first launched, they faced various challenges, such as fragmentation issues, diverse consensus methods, distinct architectures, and performance limitations.

It comes as no surprise that Ethereum’s co-founder, Vitalik Buterin, expressed his support for the installation of an “enshrined ZK-EVM” upgrade for his blockchain in December. This is likely due to his experience with the challenges posed by the fragmentation of L1s.

Although zero-knowledge proofs (ZKPs) have existed for many years, their popularity has surged in the blockchain and cryptocurrency industry recently. ZK tech, using cryptography, allows two parties to reach an agreement on the validity of a claim without having to share any specific details about it.

On paper, the concept holds significant potential, accompanied by a considerable increase in intricacy. As an expert in the field, he suggests a rule change that involves the addition of a pre-state root and post-state root to every block that enters the consensus layer.

Each block is equipped with a unique cryptographic proof that verifies the validity of the transactions within it and accurately updates the state of the blockchain. This proof does not provide any additional information about the transactions themselves; it simply demonstrates their accuracy. In addition, users may have the option to utilize multiple proofs to enhance the overall security.

Nevertheless, implementing a rule change could pose significant difficulties for numerous Layer-2 developers and programmers on the EVM. They would face challenges in terms of compatibility, upgradability, and adaptability within their current systems. We’ll unlikely see an Ethereum with enshrined ZK-EVM anytime soon.

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To tackle fragmentation, end-users and developers must have a seamless and efficient method of sharing crypto-asset information between L2s without relying on the Ethereum L1.

Thankfully, a couple of L2 ecosystems prioritize providing exactly what you’re looking for. One of the most prominent ones is ZKsync’s ZK Stack, along with Polygon’s CDK. When a new blockchain network is deployed using one of these frameworks, it establishes a shared connection to Ethereum alongside other chains that utilize the same framework.

In addition, with the shared proof system among chains using the same framework, sending cross-chain messages more cost-effectively and efficiently becomes increasingly feasible, all while maintaining the security provided by the underlying Ethereum L1.

Ethereum Layer2 Fragmentation: What’s Next?

Currently, these ecosystems lack interoperability. In the field of cryptocurrency analysis, it is worth noting that ZK Stack chains can only be used in conjunction with other ZK Stack chains. In addition, even within a single ecosystem, the technology implementations, wallet integrations, and user interfaces are still in their infancy.

However, these L2 solutions are already a significant advancement towards a new era in blockchain technology. Developers can utilize them to delve into the various use cases and user experiences enabled by cross-chain communication that is safeguarded by Ethereum. With this new approach, users can now lock one crypto-asset as collateral on one L2 chain while borrowing another crypto-asset on another L2 chain. L2 solutions have taken over the responsibility of driving progress in the realm of decentralized applications despite Ethereum’s initial contributions.

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