The developer of Ethereum outlines why rollups may help Ethereum expand while maintaining its decentralization. According to CoinGecko statistics, Ethereum’s Ether, the second-largest cryptocurrency behind Bitcoin, broke the US$500 billion market value threshold for the first time this month. Scalability has been a critical concern for Ethereum as the number of apps and users continues to expand.
Layer 2 is the future of Ethereum scaling and the only secure method to do so while maintaining the decentralization that is at the heart of the blockchain, Ethereum founder Vitalik Buterin said today during a keynote at the 2021 Shanghai International Blockchain Week.
Scalability is built into the Eth2 roadmap, and although the early stages of Eth2 are nearing completion, Buterin noted that base layer scalability for apps would not arrive until the last major phase of Eth2, which is still years away.
With the Eth2 improvements occurring in stages, work has been done to make Ethereum more scalable, safe, and sustainable. In December, the Beacon Chain update became the first of the Eth2 upgrades, bringing staking to the Ethereum ecosystem. “The Merge” — the merging of the Ethereum main net with the Beacon Chain’s proof-of-stake system — will bring an end to Ethereum’s proof-of-work system in 2022. Sharding, a multi-phase update that would increase Ethereum’s scalability and capacity by distributing the network’s load among 64 new chains, is scheduled to begin in 2022, after The Merge.
Buterin admitted that scaling Ethereum was a pressing requirement, but that native scaling (sharding execution) would take a long time. Rollups — a Layer 2 solution that processes transactions outside of the main Ethereum chain (layer 1) but publishes transaction data on layer 1 — has already been created and might deliver a factor of 100 boosts in scalability.
Polygon Hermez, Loopring, ZKSync, Optimism, and Arbitrum One are all Layer 2 solutions that have been introduced. According to Buterin, the current cost of transferring ETH on Polygon Hermez is US$0.25, compared to US$6.84 for Ethereum.
The Ethereum ecosystem is fully committed to rollups as a scaling approach for the immediate and medium-term, according to Buterin, who added that optimistic rollups, which are simpler and easier to design, are likely to be favored in the short run.
However, in the long run, Buterin added, ZK rollups, which were more difficult but offered superior security, were likely to be favored. ZK rollups — which do computation off-chain and submit validity proof to the chain — are far quicker than optimistic rollups, which may take up to a week to complete.
Enterprise applications might potentially utilize ZK rollups — if the technology is mature — to benefit from cheap costs without the need for a separate private blockchain, Buterin said.
Despite advancements in technology and the migration of apps to rollups, there is still more work to be done. Buterin advised application developers to make a concerted effort to migrate to rollups as soon as feasible and securely. Non-financial apps, for example, may migrate to rollups in order to cut costs, since consumers were unwilling to pay them. Additionally, Buterin said that NFTs, the Ethereum Name Service (ENS), light-clients, and decentralized autonomous organizations (DAOs) might migrate to rollups.
Rollups compatible with the Ethereum virtual machine (EVM) enable scaling while protecting user experience, developer experience, and decentralization, Buterin noted. “Ethereum scaling is not just a notion; it is a well-defined roadmap, with many components already constructed, deployed, or under development.”
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