Vitalik Buterin Anticipates Likely Centralization in Ethereum Second Layers

Vitalik Buterin Anticipates Likely Centralization in Ethereum Second Layers

Key facts:
  • Second layers are required in Ethereum due to network congestion.

  • If the Ethereum base layer is strong, the risk of centralization diminishes throughout the ecosystem.

The Ethereum network has had a considerable increase in users in recent years. Tens of thousands of non-fungible tokens (NFTs), games play-to-earn, decentralized finance (DeFi) and dApps have made this blockchain their home.

But space is not enough for everyone. Ethereum is a congested blockchain which is evident, among other things, in the high rates that users who operate on this network must pay.

For this reason, escape routes are necessary. Alternative routes, outside the main chain, that allow you to continue operating in Ethereum at a higher speed and lower cost. These are the second layer solutions (rollups, for example) with which it is sought to increase scalability.

Side chains may also be mentioned. Polygon, for example, had considerable growth this year in the number of users driven by Ethereum’s high fees, as reported by CryptoNews a couple of months ago.

The co-creator of Ethereum and the main reference of the community around this blockchain, Vitalik Buterin, recently wrote a text where he envisions three possible scenarios on the development of these scalability solutions.

In one of them, scalability is achieved on the main blockchain itself; in another, there is a rollup dominant; and, the last one, is a future in which multiple rollups.

The 3 possible futures for the second layers of Ethereum

The first of them is him development of second layers that have a low consumption of computational resources to carry out the validation of the blocks.

“The transactions of a block are divided into 100 deposits. (…) Each participant is randomly assigned to one of the groups and a block is only accepted when at least two-thirds of the validators assigned to each deposit sign it ”, explains Buterin.

To this, fraud tests could be added, which allow each user to directly verify the validity of the block; availability sampling, to allow to verify the availability of blocks; and secondary transaction channels, to avoid censorship.

In that way a blockchain would be obtained in which the production of blocks is still centralized, but not the validation, which can be executed without the need to trust third parties. What Buterin calls “anti-censorship magic” also comes into play.

The second possible scenario that Buterin imagines is one in which some rollup in particular (for example, Arbitrum, Optimism, Zksynk, StarkNet, or the next to come) does a very good job and achieves the long-awaited 10,000 transactions per second, so that rollup monopolizes most of the market.

In this hypothetical scenario, explains the Russian-Canadian developer, “once again, we get a world where block production is centralized, block validation is done decentrally without the need to trust third parties, and censorship is still carried out. avoid.

The third and final future imagined by Buterin is one in which no rollup dominate the sceneInstead, all of them have the capacity to process hundreds of transactions per second. Would that be a future of rollups multiple for Ethereum.

In that case, explains the specialist, you would have everything: decentralized validation, robust resistance to censorship and distributed block production. But, although it seems the ideal scenario – since the “trilemma” of decentralization, scalability and security would be fulfilled – Buterin is not optimistic and believes that something like this could not be sustained over time:

The decentralization of block production may not last, due to the possibility of the MEV [siglas en inglés de «máximo valor extraíble»] cross domain. There are a number of benefits to being able to build the next block on many domains at the same time: you can create blocks that use arbitrage opportunities that are based on trading in two. rollups, or in a rollup and the main chain, or even more complex combinations.

Vitalik Buterin, co-creator of Ethereum.

That is, according to the vision of the creator of Ethereum, the market that would be generated around the production of blocks in second layers (for example, arbitrage opportunities) would lead to it being centralized again due to “strong pressures on the same people who control block production in all domains.”

Vitalik Buterin Anticipates Likely Centralization in Ethereum Second Layers
Vitalik Buterin believes that all three scenarios will lead to the same destination of centralized block production. Fountain: vitalik.ca.

Vitalik Buterin foresees high probability of centralization in second layers of Ethereum

Aware that “there is a high probability that the production of blocks in Ethereum will end up centralized”, Buterin explains what, according to him, is the best way to deal with this situation: “to ensure that the winners cannot abuse their power”.

For this, the computer scientist considers that it will be necessary to use techniques at the protocol level (that is, in the base layer of Ethereum). Among them he mentions the validation of the committee and the sampling of data availability in order to thereby achieve a certain “regulation” of the market. In other words, a strong Ethereum base layer will be what – for Buterin – will ensure the decentralization of the entire ecosystem.

Ethereum is open to all futures and you don’t have to commit to an opinion on which one will win. (…) Will users want to be in a single rollup? Ethereum, following its existing course, can be the base layer for that, automatically providing the anti-fraud and anti-censorship armor (…). Do users have a great need for variety [de rollups]? Ethereum can be the base layer of that too, and a very good one, as the common root of trust makes it much easier to move assets between rollups safely and economically.

Vitalik Buterin, co-creator of Ethereum.

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