Vitalik’s Ultimatum: Ethereum Layer 2s Must Reach Stage 1
Ethereum Layer 2s and Their Decentralization Journey
Ethereum co-founder Vitalik Buterin has issued a stern warning to networks claiming to be Ethereum Layer 2 (L2) solutions. He emphasized that networks must reach “Stage 1” by the end of the year to be considered true Layer 2s. This declaration marks a significant point in the evolution of Ethereum’s scaling solutions.
The Significance of Stage 1
The term “Stage 1” represents a crucial benchmark in the decentralization of Layer 2 networks. According to Buterin, a Stage 1 network should not merely be a “glorified multi-signature” system but should embody cryptographic trust. This distinction is vital because it directly impacts whether a network can be trusted to secure users’ funds by leveraging Ethereum’s security.
The Stages of Decentralization
Buterin’s framework for Layer 2 decentralization outlines several stages. In the initial Stage 0, a network calls itself a Layer 2 or “rollup” and posts compressed transaction data to Ethereum. Users can independently verify the network’s state and withdraw funds without the team’s help, provided there is no active interference.
Stage 1, however, introduces a more robust security mechanism. A network’s smart contract on Ethereum must contain a “fraud proof or validity proof scheme” to prevent developers from posting invalid state roots. If the developer attempts to commit fraud, these proofs should automatically block such actions.
Networks Achieving Stage 1
Research from blockchain analytics platform L2Beat reveals that six networks have already reached Stage 1. These networks, listed by total value locked (TVL), include:
Arbitrum One
Arbitrum One has achieved Stage 1, employing fraud proofs to process withdrawals and deposits. The network is overseen by a 12-member Security Council, which can override fraud proofs if necessary. However, no single organization can dominate the council, ensuring a level of decentralization.
Optimism
Optimism reached Stage 1 with its “Cannon” fault-proof system. Although it temporarily reverted to Stage 0 due to bugs, it has since re-enabled fault proofs and regained Stage 1 status. The Security Council oversees network upgrades, ensuring no single entity can control the process.
dYdX v3
dYdX v3, a separate network from its Cosmos-based counterpart, uses zero-knowledge validity proofs to ensure secure transactions. Validators can block withdrawals for up to 14 days, but users can initiate a “forced exit” on Ethereum to retrieve their funds.
ZKsync Lite
ZKsync Lite employs zero-knowledge proofs to validate transactions. The network requires a 21-day delay for upgrades, providing a seven-day “exit window” for users to withdraw funds if they disagree with any changes.
Networks Falling Short
Despite the progress, several networks have yet to meet the Stage 1 criteria. These include:
Base
Coinbase’s Base network, part of the Optimism Superchain, lacks fraud proofs. Implementing these proofs is feasible, given Optimism’s existing infrastructure, but it has not yet reached Stage 1.
Blast
Blast users can independently verify deposits and withdrawals, but the network does not allow withdrawals against the governing body’s wishes. Fraud proofs may be introduced by year-end, but currently, it remains at Stage 0.
ZKsync Era
ZKsync Era uses zero-knowledge proofs but is still under evaluation by L2Beat. Recent governance changes aim for full decentralization, but it is currently classified as Stage 0.
Starknet
Starknet has implemented zero-knowledge validity proofs but requires user permission for withdrawals. Achieving Stage 1 is within reach, but it has not yet met all criteria.
Networks Below Stage 0
Two networks with significant TVL, Scroll and Linea, have not even reached Stage 0. Both networks lack publicly available node software for transaction validation, making it impossible for users to independently verify their transactions.
The Road Ahead for Ethereum Layer 2s
As the deadline approaches, Ethereum supporters will likely continue to push for increased decentralization
