The Path to Layer 2 Decentralization | Layer 2 Review
The Path to Layer 2 Decentralization | Layer 2 ReviewQuick Reads and Hot Links Covering the People and Projects Who Are Scaling EthereumDear Frens, It’s another week in web3 and one where we get to share the recent happenings in the Layer 2 ecosystem. L2s are a continuously growing solution to Ethereum’s scalability issues while inheriting its security. However, inheriting security means that on rollups, it is possible to use confirmation rules that have around the same security as Ethereum’s confirmation rules. To properly track these rules and the security they provide, L2BEAT introduced finality. Layer 2s are solving the scalability issues of the base layer, however, they developed issues of their own which still take their root from the blockchain trilemma — security, scalability, and decentralization. In this week’s editorial, we do a mini dive into decentralization, evaluating the landscape. All this boils down to the fact that we are still early, but we will keep moving towards the future we hope to create. Read on for the latest stats, proposals, and ecosystem updates from around Ethereum’s Layer 2. Contributors: Warrior, Tonytad, jengajojo, Boluwatife, Paulito, Kornekt, WinVerse This is an official newsletter of BanklessDAO. Please subscribe and share to help us grow our audience as we fulfill our mission to build user-friendly crypto onramps. 🗞️ Ecosystem Updates⛓️ Polymer Labs Raises $23M to Build Ethereum’s Interoperability Hub 🆕 OKX Ventures Leads Strategic Investment in Cross-Layer 2 Protocol Orbiter Finance 🔀 Animoca Brands Plugs Into LightLink Delivering Web3 Gaming UX to Web2 Users ➿ Immutable zkEVM Mainnet Early Access is Live ⚡ Gitcoin-backed Layer 2 network PGN is winding down 💱 Orbiter Finance Transitions from Bridge to Rollup 🔥 Hot NewsBAF X ARBThe Blockchain Acceleration Foundation (BAF) has announced a new partnership with Arbitrum, a leading Layer 2 scaling solution for Ethereum. 🎉 The partnership aims to drive global adoption of web3, explore cutting-edge projects, provide educational initiatives, and empower the community. As part of the collaboration, blockchain enthusiasts are encouraged to join Arbitrum's Ambassador Program. 🧑🏼🤝🧑🏽Ambassadors will represent Arbitrum globally, contribute to web3 evolution, and enjoy networking benefits. This alliance combines Arbitrum's groundbreaking technology with BAF's mission to empower the blockchain community. It has the potential to significantly advance Ethereum scalability and accessibility. The organizations promise more updates as they progress on this collaborative journey. Check for more information in the thread below. 🔥 🏛 Governance💬 Proposals in DiscussionArbitrumOptimism
PolygonThe Path to Layer 2 DecentralizationAuthor: Boluwatife In our previous newsletter issue, the editorial author spoke about some of the issues currently facing the Layer 2 ecosystem, chief among them being centralization. The editorial also touched on some of the efforts being put out by these L2 projects to achieve decentralization. In this editorial, we'll be doing a mini introduction to some of these decentralization efforts. Most L2 projects aim to remove central points of control over time. This shift involves:
Decentralization StagesThe "stages" framework created by L2BEAT provides milestones to evaluate this decentralization progress. According to the platform, projects are categorized into three maturity stages: Stage 0 - Full Training Wheels: Rollup run centrally by the core team with users able to withdraw via a bridge. Several rollup projects including Optimism fall in this category. Stage 1 - Limited Training Wheels: Proof system operational, but override mechanisms like security council remain in case of bugs. Some rollups in this category are Arbitrum and zkZync Lite. Stage 2 - No Training Wheels: The rollups are fully decentralized with permissionless fraud proofs and restricted emergency abilities. Only very few rollups fall into this category, one of which is DeGate V1 The stages clarify the extent to which rollups minimize trust in specific humans versus trust in code. However, this does not imply haste. Teams should decentralize at their own pace based on technical readiness. Vitalik’s proposed milestones for rollups inspired this framework. You can read more about it here. An Example From Arbitrum — The Way Forward?A sample Constitutional AIP from Arbitrum proposes changes to their security council to maintain a Stage 1 designation. Arbitrum has two multi-signature contracts, a 9/12 instant upgrade, and a 7/12 time-locked upgrade. The lower 7/12 threshold falls below Stage 1 requirements. Since both multisigs share members, the 7/12 can override the 9/12. So effective security is 7/12, risking a Stage 0 categorization. The AIP suggests either:
These changes would ensure Arbitrum stays decentralized but with safeguards against bugs. The AIP showcases rollups balancing decentralization with practical security tradeoffs. Evaluating the LandscapeAs solutions mature at different paces, the framework of the stages empowers users to assess projects based on their priorities. Some may favor convenience and favor more centralized networks initially, while others might strictly desire full decentralization. Over time, the aim is for rollups to approach the user experience of today's centralized services while strongly upholding key web3 ethos. No single rating system can satisfy all perspectives on this complex landscape. However, the idea of stages encourages constructive discussion on decentralization efforts. Rather than a simplistic ranking, projects can communicate nuances around their particular roadmap and risk factors. This will allow users to decide their comfort level with the tradeoffs. 📈 DataTotal Value Locked on L2s still holding just above $21 billion!Top Ten Projects by Total Value Locked:🔭 Project WatchArbitrumTop Projects by TVLOptimismTop Projects by TVLzkSyncTop Projects by TVLzkEVMTop Projects by TVL🔥 L2 Fees and Costs UpdateTransaction Fees as of February 1, 2024: |
Older messages
BanklessDAO: Fostering Community Collaboration | BanklessDAO Weekly Rollup
Saturday, January 27, 2024
Catch Up With What Happened This Week in BanklessDAO
Inclusive Consistency From Our Grants Committee | BanklessDAO Weekly Rollup
Saturday, January 20, 2024
Catch Up With What Happened This Week in BanklessDAO
A Peek Into the State of Ethereum's Layer 2 | Layer 2 Review
Thursday, January 18, 2024
Quick Reads and Hot Links Covering the People and Projects Who Are Scaling Ethereum
Marvel's Inspiring BanklessDAO Journey | BanklessDAO Weekly Rollup
Saturday, January 13, 2024
Catch Up With What Happened This Week in BanklessDAO
Clarifying the Bankless Brand | BanklessDAO Weekly Rollup
Saturday, January 6, 2024
Catch Up With What Happened This Week in BanklessDAO
You Might Also Like
Biden administration to veto overturning of controversial SEC crypto rules
Thursday, May 9, 2024
The controversial SEC bulletin impacts banks' ability to work with crypto. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
What Knowledge Is Required to Become a Web3 Developer?
Thursday, May 9, 2024
Author: Dapplink Translation: Wublockchain Original: https://mp.weixin.qq.com/s/TOFzUSsxODyR73ayGXl_ig 1. Preface With the development of Web3 to this day and the rising market value of industry
Reminder: Chainalysis And Tether Team Up To Combat Illicit Activity
Thursday, May 9, 2024
We bring you the top stories in crypto every week! Stories like... Monday May 6, 2024 Sign Up Your Weekly Update On All Things Crypto TL;DR Chainalysis And Tether Team Up To Combat Illicit Activity
SEC calls Ripple’s proposed stablecoin an ‘unregistered crypto asset’
Wednesday, May 8, 2024
Ripple's CLO Stuary Alderoty said the SEC filing was baseless. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Integrate BTC, cooperate with Pendle and MakerDAO Can Ethena become a new generation of stablecoin?
Wednesday, May 8, 2024
Author: defioasis By holding LST and an equivalent amount of perpetual contract short positions, Ethena has created a delta-neutral CDP, pioneering a new chapter in synthetic dollars . The yield on
DeFi & L1L2 Weekly - 🎉 Crypto.com Reaches 100M Users, BlackRock’s BUIDL Becomes Largest Tokenised Treasury Fund
Wednesday, May 8, 2024
Crypto.com hits new milestone with 100 million global users. BlackRock's BUIDL is now the largest tokenised treasury fund. Ethereum devs propose EIP-7702 to enhance externally owned accounts. ͏ ͏ ͏
DeFi & L1L2 Weekly - 🎉 Crypto.com Reaches 100M Users, BlackRock’s BUIDL Becomes Largest Tokenised Treasury Fund
Wednesday, May 8, 2024
Crypto.com hits new milestone with 100 million global users. BlackRock's BUIDL is now the largest tokenised treasury fund. Ethereum devs propose EIP-7702 to enhance externally owned accounts. ͏ ͏ ͏
Holy Grail! We’re live with a $100k prize pool 🏆
Tuesday, May 7, 2024
Swap, borrow, and stake to earn yield and get a chance to win a slice of the massive prize pool. Flipside Crypto Holy Grail! 🏆 Aptos Grail Tournament with $100k in prizes starts today! Keep doing what
US Bitcoin ETFs see record outflows as Hong Kong counterparts thrive
Tuesday, May 7, 2024
Hong Kong spot Bitcoin and Ethereum ETFs recorded significant inflows of more than $300 million last week. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
The Usage & Evolution of Decentralized Exchanges (DEX’s)
Tuesday, May 7, 2024
Checking in on liquidity pools, trading volumes and adoption across Ethereum DEX's ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏