What are the advantages and disadvantages of using Ethereum as a layer2 scalability solution?

Author: Haotian

A friend asked me to analyze the newcomers outside the four major Layer 2 solutions, such as Linea, Polygon zkEVM, Mantle, and Metis. After a brief look, I found that the core differences of most Layer 2 solutions lie in two aspects: 1) Does Data Availability depend on the Ethereum mainnet? 2) How compatible is it with the EVM?

The equivalence of the EVM is easy to understand and determines the ease of transfer for developers. This article will explore what Data Availability is and why the DA layer is the core layer of Layer 2 from an educational perspective. What trade-offs have third-party DAs like Celestia and Eigenlayer made?

First, let’s explain what Data Availability means in simple terms.

Simply put, Data Availability refers to the availability of all historical data generated by the system in a blockchain network. Why is this important? Because blockchain is distributed, with records stored on different nodes. If certain key data is lost or hidden, the security of the entire system will be compromised.

For example, if the detailed information of a transaction is only known to some nodes and cannot be accessed by other nodes, the transaction cannot be correctly verified by all validators. Similarly, to query an account balance, all relevant historical transactions must be traversed to calculate the final result. If some transaction data is missing in the process, the balance result will be incorrect.

Therefore, Data Availability ensures that all nodes can access all historical data for correct verification and querying, ensuring that data in the blockchain system is not lost or hidden and that all nodes can access complete data. If the DA layer fails to function properly, for example, in the case of Optimism, its 7-day dispute period cannot proceed because if Calldata cannot be read normally before and after the batch, the Rollup contract cannot be confirmed. Ultimately, DA is to ensure the security of the blockchain ledger system.

Discussion on the pros and cons of using Ethereum as the DA layer for Layer 2

Using Ethereum as the DA layer for Layer 2 can indeed leverage Ethereum’s security and data integrity, which is its biggest advantage. Otherwise, Layer 2 transactions would have no constraints against malicious tampering and disorderly accounting, making it difficult for such Layer 2 networks to gain mainstream recognition. However, Ethereum itself has limited block capacity and transaction throughput, which may make it difficult to support high TPS Layer 2 networks in the long run.

This severe mismatch in capacity means that a large number of Layer 2 transactions are waiting in line for block confirmation, unable to complete DA verification in a timely manner. It also increases the competition for Ethereum block space by Layer 2, driving up gas fees.

Therefore, relying solely on the Ethereum mainnet as the DA layer will become a bottleneck for the development of Layer 2 in the long run. As a result, some mainstream DA solutions have emerged in the development of Layer 2:

1) Compressing state data to L1, such as zkSync, which submits zkSNARK proofs to the mainnet, with a large amount of original transaction data maintained by L2;

2) Third-party public chain platforms like Celestia provide DA layer solutions, where data is submitted to a third-party distributed network for verification and the resulting state is synchronized to L1;

3) After the Cancun upgrade, Blob additional storage space was added, encoded and verified using the KZB tool.

Trade-off of Third-party DA Modular Solutions

When it comes to third-party DA modular solutions, the most well-known projects are Celestia and Eigenlayer (as well as Ethstorage).

The Celestia network itself can handle a large volume of transactions, ensuring the effectiveness of DA for applications on layer2. It only uploads transaction states in batches to Ethereum, making it a highly modular and combinable DA solution;

Eigenlayer separates transaction processing and data storage. Transaction processing is done quickly in rollup, while complete data integrity is stored in a distributed network built by Eigenlayer. Rollup only uploads key data such as block headers and Merkle tree roots to Ethereum. When it needs to read complete data, the Rollup contract will read data from the Eigenlayer network in real-time.

Currently, both of these modular DA solutions are quite popular. For example, Celestia is used as the DA layer for application chains in the Cosmos ecosystem, such as Eclipse and Cevmos, while Eigenlayer is used as the DA layer for layer2 networks like Mantle.

It should be noted that modular DA solutions are a more forward-looking DA solution, as they embed third-party external consensus and do not directly rely on Ethereum for DA consensus, which is why some propose to remove projects that adopt third-party DA solutions from the layer2 ecosystem.

Essentially, it depends on whether you trust this type of externally embedded DA solution that can enhance capacity and performance. In my opinion, in the short term, Ethereum DA will definitely be more popular. However, in the long term, especially in the era of multi-chain applications, these third-party modular DA solutions may also emerge with strong consensus.

We briefly discussed the impact of Data Availability on layer2 systems. With the emergence of various layer2 solutions, the ideas and frameworks become clearer. The core difference between OP and ZK Rollup lies in the way they verify data state accuracy, while the use of third-party modular DA solutions is to address the capacity limitations of Ethereum as a DA. The Blob additional extension after the Cancun upgrade is a compromise solution.

Based on this premise, when looking at various cutting-edge layer2 solutions, the judgment criteria for the basic cognitive framework also become clear.

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