Ethereum’s co-founder, Vitalik Buterin, recently reiterated his views on “Layer 3s” from a previous discussion 18 months ago, clarifying that Layer 3 technologies don’t inherently boost transaction throughput but can offer cost reductions in specific operations like batch processing and funds movements.
Buterin has raised concerns regarding the perception that Layer 3 architectures detract from Ethereum’s core value and its security framework.
Clarifying the Role of Layer 3
Buterin shared on X that there are less complex and potentially more efficient means to achieve cost savings similar to those promised by Layer 3 implementations.
In a detailed post, he proposed several frameworks for Layer 3. One approach suggests using Layer 2 for scalability enhancements while employing Layer 3 for specialized functional needs. Although this does not directly improve scalability, it enables applications to expand via Layer 2 technologies, with Layer 3 adapting to specific requirements of various applications.
Another framework posits that while Layer 2 provides general scalability solutions, Layer 3 is used for tailored scalability needs through specific optimizations like rollups, which are designed to streamline data for particular applications.
A third strategy designates Layer 2 for decentralized scaling and Layer 3 for semi-trusted scaling mechanisms. In this model, Layer 2 leverages rollups for scalability, whereas Layer 3 uses Validiums, which employ SNARKs for computational verification while depending on trusted entities for data availability. Although Validiums offer a more cost-effective solution, Buterin notes their security is not as robust.
Buterin expressed a preference for a tri-layered blockchain architecture, stating it allows for a unified ecosystem operation within a single rollup, facilitating cost-effective cross-domain interactions without the significant expenses tied to Layer 1.
Debate Over Layer 3’s Impact
The proposal of Layer 3 networks as a means to boost Ethereum’s efficiency and functionality has stirred debate. Critics worry about the effects on the network’s decentralization and security.
Polygon Labs’ CEO shared his reservations on March 31, stating their decision against pursuing Layer 3 development due to concerns over its necessity and potential harm to Ethereum’s intrinsic value. He pointed out the risk of Layer 3 networks compromising Ethereum’s security, painting a hypothetical picture where all Layer 3 solutions operate atop a singular Layer 2 infrastructure.
He argued that if Ethereum were to see diminished transaction fees and lack future revenue prospects, its valuation could suffer, potentially eroding validator confidence and undermining the network’s overall security integrity.