Ethereum Foundation: The Evolution of Ethereum L1-L2 Roles and Future Collaboration

Source: Ethereum Foundation; Compiled by Golden Finance

Key Points (TL;DR):

• Goal: All users (individuals and institutions) should have a clear path to utilize, expand, and benefit from Ethereum’s core properties.

• Best Path: Leverage the unique capabilities of each layer to strengthen Ethereum’s core attributes and unlock significant value for end users through these properties.

• Evolution of Layer Roles: As the ecosystem grows, responsibilities across layers are changing:

• Past: The primary goal of L2 was to scale Ethereum (Scaling), with differentiation and customization as secondary. The main leverage was in scaling.

• Present: The main goal of L2 is to offer differentiated features, services, customization, go-to-market strategies (GTM), and control zones, while providing additional scalability. Today’s greatest leverage lies in differentiation, control, and innovation.

• Role of L1: As a truly permissionless, highly resilient global hub, responsible for settlement, shared state, liquidity, and DeFi.

• A powerful L1 that scales without compromising CROPS (Censorship Resistance, Open Source, Privacy, Security) provides a better foundation for L2.

• Role of L2: To provide valuable new features, customization, and control, developing their own on-chain economies, while extending Ethereum’s core properties to more users.

• A strong L2 network can reinforce the entire ecosystem and Ethereum’s central focus.

• Full Spectrum Relationship of L2: Different L2s maintain varying degrees of relationship with L1 based on their needs.

• Relationship with L1: L2s aiming for tight integration with L1 should promote mechanisms like synchronous composability, full interoperability, shared liquidity, Stage 2, and native rollups.

• Scope: Many L2s with diverse business models or technical expertise will continue to play key roles in the ecosystem. All L2s will offer functions that L1 cannot.

• Ethereum Foundation (EF) Commitment: EF will continue investing in relevant technologies to enable L2 to seamlessly extend L1’s core properties and securely access cross-L1 and other L2 liquidity/capital. L2 should maintain transparency and verifiability of its security properties. In other words, both sides have important roles to play, and the “vibes” should match the “substance.”

Introduction

Over the past five years, an ecosystem of multiple chains has formed around Ethereum L1. These chains can choose to extend Ethereum’s different properties: some inherit full decentralization (like Stage 2 rollups), some inherit a subset of security features (like Validiums, Prividiums), and others are based solely on the general EVM standard (not L2). Many are still in development, initially as independent chains, gradually deepening integration with Ethereum L1.

It’s time for EF and the broader Ethereum ecosystem to update our model of how L1 and L2 networks relate. The last update was five years ago, when a rollup-centric roadmap was proposed as Ethereum’s scaling path.

Since then, the landscape has changed dramatically. Technologies enabling L2 to share Ethereum’s security/liquidity and interoperate have matured. The competitive advantages of L2s and their value to users have become clearer. L2s are also growing into independent ecosystems and communities. Meanwhile, Ethereum’s scaling roadmap has become more focused. As an ecosystem, we need to acknowledge these changes and learn from successes and failures.

In recent months, a clear vision for the future L1 <> L2 relationship has emerged:

1. A thriving Ethereum ecosystem must be rooted in a strong L1 foundation.
2. Ethereum L1 will scale by several orders of magnitude while maintaining maximum security and decentralization, always serving as the core of on-chain economy and DeFi hub.
3. An expanding ecosystem of independent, interoperable L2 chains will emerge, offering customization, control, and features that L1 cannot provide. These L2s are rooted in Ethereum because it’s the best choice for their users, communities, or businesses.
4. L2 chains will compete and cooperate (which is healthy and beneficial) to provide diverse specialized block space, services, and assets.

This article aims to detail the L1 <> L2 vision and pave a mutually beneficial path for any chain that wants to root itself and become part of the Ethereum ecosystem.

What are the roles of L1 and L2, and how do they collaborate?

Ethereum L1 is the world’s leading programmable blockchain. Today, no other chain matches it in adoption, developer attention, decentralization, resilience, and robustness. L1 is the heart of the DeFi ecosystem, with the deepest liquidity.

Thanks to efforts from multiple teams within the Ethereum ecosystem, ZK (Zero-Knowledge) technology has advanced beyond expectations. Ethereum L1 now has a clear scaling path that can increase capacity by several orders of magnitude without sacrificing decentralization, adhering to its uncompromising core values.

Meanwhile, no single chain can meet the diverse needs of the global on-chain economy. Even if Ethereum scales 1000x, many specialized and customized chains will still be needed because they offer features L1 cannot:

• Specialization for specific applications or use cases
• Non-EVM functionalities
• Additional privacy guarantees
• Pricing mechanisms or transaction logic
• Ultra-low latency or other sequencing properties
• Extreme scalability unmatched by L1
• Specialized economic models, market entry, and growth strategies
• Modular designs for compliance or other business needs
• Faster iterations and innovations than L1 updates
• Governance strategies enabling stakeholders to finely control their flexible execution environments on Ethereum

This creates opportunities for mutually beneficial relationships between L1 and L2, with each focusing on their complementary roles.

Why do other chains want to become Ethereum’s L2?

1. High security, low counterparty risk, and extremely high decentralization (at significantly lower costs): L2s achieve security at a fraction of the cost of competing L1s (Alt-L1s). Building and incentivizing a global decentralized validator set is expensive and difficult; L2s can outsource this responsibility to Ethereum L1.

2. Users and developers: L2s gain more users and developers through secure interoperability with the largest L1 and other L2 networks.

3. Interoperability: Well-designed L2s can securely access L1 assets, DeFi liquidity, user accounts, and various services on L1 (like oracles, ENS).

4. Go-to-market: As part of an ecosystem with the strongest reputation, security record, and regulatory acceptance, L2s can benefit from branding advantages.

How does Ethereum L1 benefit from these relationships?

1. Creating demand for ETH and providing trust-minimized bridges between ETH and other assets.

2. Enabling ETH to serve as a store of value, currency, and application asset simultaneously.

3. Extending Ethereum’s network effects (e.g., EVM, developer tools, user onboarding, interoperability between L2s).

4. Reinforcing Ethereum’s position as the core of a multi-chain ecosystem, the main settlement layer, and the liquidity layer.

5. Bringing broader business development, growth, and marketing to Ethereum through L2 efforts.

Recommendations for the future development of L2

What does this new vision mean for L2 teams and communities? Our recommendations are:

• Focus on complementary strategies: L2 should differentiate itself through innovative features, specific use cases (like application chains), or novel market strategies.

• Be bold in innovation: We’ve seen differentiation in scalability, decentralization, privacy, compliance, and community. Other promising use cases include public bulletin boards for crypto e-voting, certificate transparency, etc.

• Clear security declarations: L2 can extend some or all of Ethereum’s properties but must ensure users can easily understand what security it provides (and does not provide).

• Trust minimization: L2 aiming for trust minimization should at least reach Stage 1 and pass the “walkaway” test, meaning users can safely exit to L1 even if malicious operators or security committees fail.

• Tight integration pathways: L2s seeking full inheritance of L1 properties should push toward Stage 2, promote synchronous composability (e.g., L1SLOAD protocols or application layer interoperability), and become native rollups (eliminating the need for security committees).

• Promote interoperability: Encourage teams to explore “Open Intents Framework,” “Fast Confirmation Rules,” and designs that allow access to L1 capital without leaving L2.

• Maintain transparency: L2 should continue to operate transparently, clearly explaining its security properties.

What is the Ethereum Foundation (EF) doing?

To realize this vision, EF is taking the following actions:

• Scaling L1 and Blobs: Increasing capacity without sacrificing decentralization. Currently, Blobs are only about 30% utilized, leaving significant room for growth.

• Supporting core areas: Especially supporting L2s that aim to deepen work in privacy, security, and decentralization—EF’s core areas.

• Establishing platform teams: Led by Josh Rudolf, to improve the entire Ethereum platform and serve as an interface between L2 and core protocol roadmaps.

• Improving L1 liquidity: Making it easier for L2s to access L1 capital (faster finality, deposits, and withdrawals).

• Close collaboration: Working with L2 teams to understand their needs and reflect them in protocol priorities, clarifying the L1-L2 relationship.

• Investing in R&D: Developing “Native Rollups” so L2s can be fully and trustlessly verified by L1.

• Verifying security properties: Working with organizations like L2Beat to rigorously and honestly assess L2 security, helping users make informed choices.

• Addressing fragmentation: Collaborating across the ecosystem to build better interoperability solutions, improve user experience (UX), developer platforms, and begin addressing the fragmentation of Ethereum narratives.

Together, we will deliver a global, permissionless on-chain economy and the best platform for all users.