Opinion by: Jay Jog, co-founder of Sei Labs 

When CryptoKitties crashed the Ethereum community in 2017, the business realized a tough lesson about blockchain scalability. Today, with over $100 billion locked in decentralized finance (DeFi) and tens of millions of non-fungible tokens (NFTs) being traded, that lesson is extra related than ever. The Ethereum Virtual Machine (EVM) — the engine that powers this exercise — is reaching its limits.

So far, the crypto group’s reply has been layer 2 options — separate chains that course of transactions and report again to Ethereum. But what if the group’s been searching for 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 “quick fix” as a substitute 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 a substitute of fixing them.

Layer 2 options include their very own challenges, primarily tied to centralization and interoperability. Many of at the moment’s layer 2 blockchains run with centralized sequencers that might expose the community to transaction censorship, transaction reordering and extra. Additionally, Vitalik Buterin acknowledged in a current weblog put up that layer 2s are struggling to take care of interoperability. This referred to as consideration to the disorganized state of layer 2s, additional contributing to liquidity fragmentation and a fancy person expertise. 

Recent: L2 gaming activity spikes in February, but wallets decline — Report

Advanced rollup designs have tried to repair these ache factors. Recently, there was a brand new design referred to as native rollups that’s making an attempt to sort out layer 2’s centralization points. Native rollups take worth away from tasks, which is able to 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 a substitute of trying elsewhere? Could there be a greater resolution? According to L2BEAT, it prices round $95.53 million yearly to run all the main L2s. Instead of spending more cash on constructing and operating extra L2s and interoperability options, why not give attention to refining the prevailing foundational layer? 

A extra correct various to TPS

To create essentially the most performant layer 1s, the business should first reevaluate the method to trace blockchain efficiency. Most blockchains give attention to throughput, utilizing transactions per second (TPS) to match chain efficiency. While many argue that reaching essentially the most vital 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 several types of transactions require totally 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 know a blockchain’s full potential. This is the place another efficiency metric referred to as “gas per second” emerges — a measure that evaluates the gasoline charges required to course of transactions, higher reflecting totally different transaction varieties. While 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 might be an extended course of however a vital step in blockchain’s evolution. 

Going again to the fundamentals: Layer 1s

The functionality of layer 1s has traditionally been neglected, as many Ethereum researchers centered on a rollup-centric roadmap. As the spine of the complete crypto ecosystem, layer 1s are the important thing to scaling the EVM. To remedy 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 subsequent era of customers. Approaches corresponding to parallelization will assist enhance throughput and, mixed with remodeling the EVM’s consensus mechanism and storage options, will set a brand new efficiency normal for the business and set up a extra developer-friendly setting for tasks.

The correct resolution to scaling the EVM 

For the previous few years, Layer 2s have been offered as the reply to offering the most cost effective and quickest method 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 is time to be open to adopting extra correct efficiency metrics and divert consideration to bettering community efficiency. These adjustments will pave the way in which for the EVM to attain 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 is dependent upon the business to construct. 

Opinion by: Jay Jog, co-founder of Sei Labs.

This article is for common info functions and isn’t supposed 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.

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