Who am I?

I'm DCBuilder, a blockchain researcher at Moralis, where I write about DeFi, NFTs, DAOs, L2s, MEV and other various topics pertaining to web3/crypto. I have been a front-end developer with an AI/ML background and have recently started the transition to full-stack blockchain development through an EthernautDAO mentorship with Austin Griffith. I'm a fellow member of Waifus Anonymous being an anime/manga enjoyoor and have a Kaneki (Tokyo Ghoul) pfp on Twitter.

Introduction

In this article, I’ll talk about L2s on Ethereum, the state of the current scaling ecosystem, and why I believe running L2s on top of Ethereum is the most economically and technically sustainable scaling solution long term.

Disclaimer: This article aggregates my thoughts, other people's resources, and miscellaneous technical information. It is not meant to be a concise summary of the ecosystem, but rather a more detailed and verbose overview of the current state and future feasibility of Ethereum L2 scalability.

To dive deeper, we need to get a few definitions and concepts out of the way.

TL;DR

To summarize this massive guide I will keep a running list of important points about the technology and its future outlooks:

• Users won't ever interact with Ethereum mainnet as this will only serve as the data availability layer for L2s
• Web3 applications' UX will have all complexities abstracted away
• Modular blockchains are the most economically and technically viable long-term scaling design option
• Currently, Ethereum is the dominant blockchain in the modular domain, as it has very strong security which will greatly increase with the switch to PoS
• Validity proofs are better than fraud proofs long-term
• The Volition L2 infrastructure (Validium + zk-rollup) is emerging as the golden standard for zkVM-based L2s
• Ethereum is also scaling as an L1 with data sharding, verkle trees, statelessness, and other changes
• L2s are on-pace to build a shared cross-L2 communication framework which will enable them to have shared liquidity and smart contract composability
• L2s use ETH for gas but are incentivized to create DAO governance tokens to decentralize operations over time
• The application design space is growing now that builders have more bandwidth and less execution layer hurdles to work with

What is an L2?