How L1 and L2s can build the strongest possible Ethereum

The North Star of the Platform team is for Ethereum to scale as a cohesive system and enable confident adoption by all users. This doc is intended to share our perspective on the L1 <> L2 relationship, the roles of each layer, and how we (as an ecosystem) are leveraging the strengths of L1 & L2 to create the most compelling platform for all users. Some of this is already clear today, and some of this will need to be validated through ongoing experimentation and iteration with the community and users 🙏.

On the L1 + L2 relationship

TL;DR:

• Goal: all users (individuals and institutions) should have a clear path to leverage, extend, and benefit from the core properties that Ethereum provides.

  • The best path to getting there leverages the unique capabilities of each layer, reinforces Ethereum’s core properties, and unlocks meaningful value to end users through those properties.

• The role of each layer has evolved as the ecosystem has grown:

  • Previously: the primary objective of L2s was to scale Ethereum, and secondarily to give space for differentiation and customization. The biggest lever was on the scaling side.

  • Today: the primary objective of L2s is to provide differentiated features, services, customizations, go-to-market strategies, and zones of control, while also offering extra scale. The biggest lever today is around differentiation, control and innovation.

  • Role of L1: serve as a truly permissionless and maximally resilient global hub for settlement, shared state, liquidity, and DeFi.

    • A strong L1 that is scaling without compromising on CROPS (censorship-resistance, open source, privacy, and security) provides a better foundation for L2s

  • Role of L2s: deliver valuable new features, customizations, and control to grow their own onchain economies while also extending the core properties of Ethereum to more users.

    • A strong network of L2s reinforces the ecosystem and Ethereum’s center of gravity

• L2s are full spectrum and have a range of relationships with L1 depending on their needs

  • Relationship to L1: Those L2s seeking the tightest integration with L1 should push towards synchronous composability, full interoperability, shared liquidity, Stage 2, and mechanisms like native rollups.

  • Scope: Many L2s with a wide variety of business models and/or technical specialization will continue to play a major role in the ecosystem. All will offer things the L1 does not.

• The EF will continue to invest in technologies that allow L2s to more seamlessly extend the core properties of L1, and securely access liquidity/capital across L1 and other L2s. L2s should maintain transparency and verifiability of their security properties. In other words, both sides have an important role to play, and vibes should match substance.

Intro

Over the last 5 years an ecosystem of chains has grown up around Ethereum L1. There are many different properties these chains can choose to extend from Ethereum: some inherit full decentralization (e.g. Stage 2 rollups), some inherit a subset of the security properties (e.g. validiums, prividiums), and some simply build on the common EVM standard (without being an L2). Many are still under development, often beginning as independent chains and gradually integrating more deeply with Ethereum L1.

It is time for the EF and the broader Ethereum ecosystem to update our model of how Ethereum L1 and this network of L2s should relate to each other. The last time this happened was arguably 5 years ago, when the rollup-centric roadmap was first proposed as a path to scaling Ethereum.

Since then, much has changed. The technologies that allow L2s to share Ethereum’s security/liquidity and interoperate with it have matured and evolved. The competitive advantages of L2s and their value to users has become more clear. L2s themselves have grown and matured, becoming ecosystems and communities in their own right. And the L1 scaling roadmap has evolved and come into sharper focus. As an ecosystem we need to acknowledge what has changed and learn from our ecosystem’s successes and failures.

Over the last many months, a clearer vision for the future of the Ethereum L1 <> L2 relationship has come into focus:

• A thriving Ethereum ecosystem must be rooted on a strong L1 foundation.

• Ethereum L1 will scale by orders of magnitude, while retaining maximum security & decentralization, remaining the heart of the onchain economy and a hub for DeFi.

• There will be a growing ecosystem of independent and interoperable L2 chains, which will offer greater customization, control, and features the L1 cannot. These L2s put down roots in the Ethereum ecosystem because it is the best choice for their users, their communities, or their businesses.

• L2 chains both compete and cooperate (this is good and healthy) to offer a diverse range of specialized blockspace, services, and assets..

The goal of this document is to explain the L1 <> L2 vision in more detail, and lay out a path to building mutually-reinforcing relationships between Ethereum L1 and any chain that wants to put down roots and become part of the ecosystem.

What are the roles of L1 and L2s, and how can they work together?

Ethereum L1 is the world’s leading programmable blockchain. No other chain today comes close in terms of adoption, developer attention, decentralization, resilience, and hardness. Ethereum L1 is the heart of the DeFi ecosystem and features the deepest liquidity.

Ethereum L1 now has a clear path to scaling while preserving decentralization and hardness. ZK technology has accelerated faster than anticipated, due to the work of many teams across the Ethereum ecosystem. In the next few years, we will be able to scale Ethereum L1 by several orders of magnitude while staying true to its vision of a chain that does not compromise on its core values.

At the same time, any single chain will be unable to meet the diverse needs of a global onchain economy. Even in a future where Ethereum remains the world’s leading blockchain and scales 1000x, there will be many different chains because they provide specialization and customization that any L1 cannot:

• Specialization around specific applications or use cases

• Non-EVM features

• Additional privacy guarantees

• Pricing mechanisms or tx inclusion logic

• Ultra low latency or other sequencing properties

• Extreme scaling properties L1s cannot match

• Specialized economies, go-to-market, and growth approaches

• Modular designs that enable compliance or other business needs

• Other improvements or innovations that can be iterated and shipped faster than on L1

• Governance strategies to give stakeholders granular control over their own flexible execution environment on Ethereum

This presents an opportunity for Ethereum L1 and Ethereum L2s to build mutually beneficial relationships, each focusing on complementary roles.

Why should other chains want to be L2s on Ethereum?

• High security, low counterparty risk, and maximum decentralization at significantly reduced cost: L2s achieve maximum security & decentralization at much lower costs than alt-L1s. Building and incentivizing a global decentralized validator set is expensive, time consuming, and difficult. L2s can offload that responsibility to Ethereum L1, enabling them to “pay for usage” rather than pay the large fixed costs to build their own L1 validator network.

• Users and developers: L2s gain access to more users and developers through secure interoperability with the largest L1 blockchain and the largest network of L2 chains (interoperability and crosschain UX will accelerate thanks to ZK technology, real-time proving, faster L1 finality & L2 settlement, and maturation of agentic infrastructure).

• Interoperability: L2s, if designed well, can gain secure access to L1 assets and DeFi liquidity, user accounts on L1, and any services that live on L1, eg. oracles, ENS.

• Go-to-market: The branding and reputational benefits from being part of the Ethereum ecosystem, which has the strongest reputation, security track record, and regulatory acceptance of any L1.

How does Ethereum L1 benefit from these relationships? From our experience and discussions with stakeholders around the ecosystem, we believe that positioning Ethereum L1 at the centre of a growing network of L2s reinforces Ethereum and ETH’s unique role in the onchain economy:

• Creating demand for ETH, and providing trust-minimized, secure bridging between ETH and other assets

  • ETH functions simultaneously as a store of value, money, and an application throughout Ethereum.

• Extending network effects around Ethereum (e.g. EVM, developer education, developer tooling, user onboarding, and interoperability between L2s)

• Reinforcing Ethereum’s valuable position as the core of a multichain ecosystem, and the primary settlement and liquidity layer of the onchain economy

• Providing additional business development, growth, and marketing efforts broadly for Ethereum

• L2s help achieve a core vision of the Ethereum ecosystem. By acting as distribution engines (providing extra scaling) for Ethereum’s core properties (security, resilience, and hardness), they help to maximize the number of people who can get sustainable value from Ethereum

The Ethereum ecosystem should not take these benefits for granted. Some are debated within the community, or are long-term theses that need to be validated through experimentation, measurement, and analysis. Ultimately the L1 <> L2 relationship must be mutually beneficial for it to succeed. The first five years of this relationship have shipped many successes and key building blocks for the future.

What does this mean for L2s going forward

What does this new vision mean for L2s, their teams, and their communities?

Here are our recommendations:

• L2s should focus on strategies that are complementary to L1 and differentiate their platforms. Many L2s are already successfully executing towards this vision. Some have done this with innovative new features, by targeting specific use-cases (e.g. app chains), supplying new forms of distribution, or with novel go-to-market strategies. This has helped them create their own distinct communities and extended the properties of Ethereum to millions of new users.

• L2s should feel empowered to differentiate in any way they can imagine. We have already seen differentiation in scalability, trustlessness, privacy, corporate compliance, industry sector, community, and a range of technical innovations. Other use cases that can function well as L2s include public bulletin boards for cryptographic e-voting, and certificate transparency.

• It is a valid choice for L2s to extend all or a subset of Ethereum’s properties, depending on their goals. But they should make sure the security properties they do and do not provide are easily understood by their users.

  • L2s working towards trust-minimization should at least reach Stage 1 and pass the “walkaway” test, meaning users can safely exit to L1 even in the presence of malicious operators or security council failure.

  • L2s that choose to be closest to L1 and fully inherit its properties should push towards:

    • Achieving Stage 2
    • Synchronous composability (whether read-only eg. L1SLOAD / L1STATICCALL, or read-write), both at the protocol layer and at the application layer (eg. even if activity is on L2, do user accounts need to be on L2? Even if trades are on L1, do assets need to be issued on L2?)
    • Becoming a native rollup (allowing L2s to get rid of their security councils)

• L2s should continue to work on mechanisms for interoperability and shared liquidity more broadly, strengthening the system as a whole. We encourage teams to look into the Open Intents Framework and the Fast Confirmation Rule, explore designs that provide access to L1 capital without leaving the L2, and otherwise contribute to ongoing synchronous composability workstreams.

• L2s should continue to operate transparently, being clear with the ecosystem about their individual security properties and relationship to L1 (supported by L2Beat, playing an important role in making the L2 ecosystem transparent and ensuring it improves over time).

What the EF is doing to help build that world:

To achieve this vision of the L1<>L2 relationship, we know the EF has a role to play. Here’s what we are doing:

• Working to both scale the L1 and scale blobs without sacrificing decentralization or hardness. Today blobs are only ~30% full. There is a lot of headroom to grow, and we feel comfortable growing blobs much more if needed.

• Supporting L2s in particular who have or wish to deepen strong properties in core EF domains like privacy, security, and trustlessness.

• The Platform team, led by Josh Rudolf, to improve the Ethereum platform as a whole and serve as an interface between L2s and the core protocol roadmap.

• Improving liquidity on L1, and make it easier for L2s to access that liquidity (faster finality, withdrawals, and deposits).

• Working closely with L2 teams to understand their needs and reflect them in Protocol priorities, and bringing clarity to the relationship between L1 and L2. For this relationship to work, we need to understand what is working and what is not, and work together. The goal is to always clarify and strengthen the value proposition of being part of the Ethereum ecosystem.

• Investing R&D towards the technology that will enable “native rollups” — L2 chains that can be fully and trustlessly verified by L1, enabling synchronous composability and secure interoperability.

• Working closely with L2Beat and others who help to monitor and validate the security properties of L2s. We must be rigorous and honest about the properties of L2s and the degree to which they share in L1’s security, so that users and builders can make informed choices.

• Addressing the primary downside of a multichain ecosystem: fragmentation. We will work with the ecosystem (chains, wallets, infra providers) to build better interop solutions that fix UX and developer platform fragmentation. And now with a clearer vision for the L1<>L2 relationship, we can begin to address the fragmentation of Ethereum’s narrative.

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