Opinion by: Jay Jog, co-founder of Sei Labs
When CryptoKitties crashed the Ethereum community in 2017, the business discovered a tough lesson about blockchain scalability. Right now, with over $100 billion locked in decentralized finance (DeFi) and thousands and thousands of non-fungible tokens (NFTs) being traded, that lesson is extra related than ever. The Ethereum Digital Machine (EVM) — the engine that powers this exercise — is reaching its limits.
To date, the crypto neighborhood’s reply has been layer 2 options — separate chains that course of transactions and report again to Ethereum. However what if the neighborhood’s been in search of solutions within the improper place?
Layer 2s are usually not the answer
Layer 2 blockchains have lengthy been touted as the answer to the EVM’s efficiency challenges, given their skill to dump the computational work from Ethereum to a secondary chain. Layer-2 options have confirmed to be nothing greater than a “fast repair” as an alternative of a everlasting resolution, as many hoped for. As Gemini reported, a brand new layer 2 appeared each 19 days in 2024, indicating that the aggressive panorama is creating extra issues as an alternative of fixing them.
Layer 2 options include their very own challenges, primarily tied to centralization and interoperability. A lot of at present’s layer 2 blockchains run with centralized sequencers that would expose the community to transaction censorship, transaction reordering and extra. Moreover, Vitalik Buterin said in a latest weblog submit that layer 2s are struggling to keep up interoperability. This referred to as consideration to the disorganized state of layer 2s, additional contributing to liquidity fragmentation and a fancy person expertise.
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Superior rollup designs have tried to repair these ache factors. Lately, there was a brand new design referred to as native rollups that’s attempting to deal with layer 2’s centralization points. Native rollups take worth away from initiatives, which can considerably deter adoption. Consequently, it’s uncertain that native rollups are the reply to all of Ethereum’s pressing issues.
With simply as many challenges because the EVM itself, why depend on layer 2s as an alternative of wanting elsewhere? May there be a greater resolution? In response to L2BEAT, it prices round $95.53 million yearly to run all the key L2s. As an alternative of spending more cash on constructing and working extra L2s and interoperability options, why not concentrate on refining the prevailing foundational layer?
A extra correct different to TPS
To create probably the most performant layer 1s, the business should first reevaluate the method to trace blockchain efficiency. Most blockchains concentrate on throughput, utilizing transactions per second (TPS) to match chain efficiency. Whereas many argue that reaching probably the most important transactions per second is the way in which to allow mainstream adoption for crypto, TPS sadly doesn’t permit for apples-to-apples comparisons since various kinds of transactions require completely different quantities of compute.
For instance, an Ether (ETH) switch requires 21,000 models of gasoline, whereas an ERC-20 switch wants 65,000, confirming that TPS conveys zero worth when monitoring mass transactions and community throughput.
A brand new standardized efficiency metric that higher displays community computing functionality should be developed to grasp a blockchain’s full potential. That is the place another efficiency metric referred to as “gasoline per second” emerges — a measure that evaluates the gasoline charges required to course of transactions, higher reflecting completely different transaction varieties. Whereas TPS is greatest served to evaluate easy ETH transfers, gasoline per second reveals the larger image by contemplating all computational efforts, even for complicated transactions.
Given the novelty of this metric, measuring gasoline per second throughout all chains will probably be a protracted course of however a vital step in blockchain’s evolution.
Going again to the fundamentals: Layer 1s
The potential of layer 1s has traditionally been missed, as many Ethereum researchers targeted on a rollup-centric roadmap. Because the spine of the whole crypto ecosystem, layer 1s are the important thing to scaling the EVM. To unravel EVM’s scalability problem, layer 1s should begin rebuilding the EVM from scratch with efficiency in thoughts above the rest.
The EVM faces extreme community congestion and excessive gasoline costs as quantity will increase. It’s time for layer 1s to scale to onboard the following technology of customers. Approaches akin to parallelization will assist enhance throughput and, mixed with remodeling the EVM’s consensus mechanism and storage options, will set a brand new efficiency customary for the business and set up a extra developer-friendly setting for initiatives.
The correct resolution to scaling the EVM
For the previous few years, Layer 2s have been introduced as the reply to offering the most affordable and quickest solution to execute transactions. Layer 2s are usually not what the EVM actually wants. From day one, Layer 1s have all the time been the true resolution to the EVM’s scalability downside.
It’s time to be open to adopting extra correct efficiency metrics and divert consideration to bettering community efficiency. These modifications will pave the way in which for the EVM to realize its highest potential, introducing ranges of scalability and effectivity by no means seen earlier than. The EVM is right here to remain, however its future will depend on the business to construct.
Opinion by: Jay Jog, co-founder of Sei Labs.
This text is for basic info functions and isn’t meant to be and shouldn’t be taken as authorized or funding recommendation. The views, ideas, and opinions expressed listed here are the creator’s alone and don’t essentially replicate or characterize the views and opinions of Cointelegraph.