Do we really need so many Layer 3?

Author: Arrow@go2mars; Source: Author’s Twitter @ArrowCrypto_eth

We continue to talk about modular blockchain and Layer3. After discussing the solutions and mechanisms of Layer2 yesterday, I found that many people do not understand the impact of OP Stack on the Layer2 ecosystem. In fact, it can be called a “Chain SaaS” tool, creating (Layer2) chains as a service.

In NingNing’s long tweet “How long can L2s continue to fight for wool?” published by @OxNingOx, it clearly mentions that many project teams “develop 1 L2 based on OP Stack+targeting wool party”.

The description of this phenomenon is very realistic. After all, Optimism Bedrock, as the first implementation of OP Stack, has reduced the average Gas cost to 25% after the upgrade, which can effectively save users a lot of on-chain fees. More and more project teams are using this “one-click chain deployment” tool to build Layer2 chains.

Whether it is claimed to be done or already done, there are countless projects based on OP Stack, such as Base, Zora Network, opBNB, Worldcoin, Loot Chain, DeBank Chain, and many more emerging Layer2s that continue to be released. But do we really need so many Layer2s? At the same time, this question may also be asked about Layer3 in the future.

The role of Layer3 is to provide customized scalability, which is different from the general scalability of Layer2.

Let’s first talk about what Layer3 is. First, what is Layer2, then the next nested layer is Layer3. Essentially, Layer3 is also a scalability solution, and Layer3 is to Layer2 what Layer2 is to Layer1, continuing the nesting. What Layer3 does is to pack and compress data for Layer2, achieving cost reduction, efficiency improvement, and greater specialization.

Of course, according to this logic, it is possible to have L4, L5, L6, Ln, etc. in the future. However, in Layer3, due to the decrease in generality, simply stacking layers does not provide significant benefits in terms of scalability. Therefore, let’s temporarily focus on Layer3.

When discussing Layer3, let’s introduce some background first. The concept of Layer3 was first proposed by the StarkWare team in the article “Fractal Scaling: From L2 to L3”. StarkWare also proposed the concept of fractal scaling and conducted major organizational discussions on multi-layer architecture. StarkNet, developed by StarkWare, is a decentralized, permissionless ZK-Rollup (based on ZKP) that achieves exponential scalability using ZKSTARK technology without compromising privacy.

In this context, they believe that due to the cost/gas reduction and enhanced liquidity, users will mainly conduct business on Layer2 in the future. However, some special applications need to be customized, that is, to provide services through a separate new layer, Layer3, which is located between the underlying public chain and the middle layer protocol. The core point is: L2 is used for general scalability, and L3 is used for customizable scalability, thereby achieving exponential growth in scalability.

Three visions of Layer3:

① Layer2 is used for scalability, and Layer3 is used for custom functions, such as privacy.

②Layer2 is used for general expansion, while Layer3 is used for custom expansion.

③Layer2 is used for trustless expansion (aggregation), while Layer3 is used for weak trust expansion (verification).

In essence, under the concept of modular blockchain, what is done to Layer3 is the specialized layering based on Layer2. Layer3 will serve as a specific application chain that meets the different needs of different applications, such as privacy and efficiency.

Let me give you an example. On June 9th, I participated in the offline event Nautilus Chain & Stanford Blockchain Hackathon in Shanghai. The theme was “Exploring the Development of Layer3 Modular Blockchain,” which sparked my interest in Layer3.

Eclipse is a customizable modular rollup that is compatible with multiple Layer1 blockchains as Layer2. Celestia is the first modular consensus and data availability network that allows anyone to deploy decentralized blockchains quickly without the cost of bootstrapping a new consensus network. Eclipse is built on top of Celestia as a lower-level support, and conversely, Celestia builds modular blockchains based on the DA layer and provides support for Eclipse development tools.

Nautilus Chain is a modular blockchain built on Eclipse and Celestia, formerly known as Zebec Chain. Nautilus Chain is a custom modular rollup chain built with Eclipse, focusing on functional processing and improving customization efficiency.

Now let’s go back to the three visions of Layer3 mentioned earlier in italics:

①Layer3 is used for customized functionality: Nautilus Chain is designed for instances that emphasize data privacy protection, instances with high real-time response DEX, and instances with weak on-chain interactions in games, among others.

②Layer3 is used for custom expansion: Each function of Nautilus Chain has an independent data processing set and a separate interface with Layer2.

③Layer3 is used for weak trust expansion (verification): The verification function of Nautilus Chain is handled by the underlying layer.

As a concept application of modular blockchain, Layer3 has attracted attention due to its more focused development of customized functions.

In the future blockchain world, Layer1 may serve as the underlying public chain for verification, Layer2 for building the ecosystem and general scalability, and Layer3 for targeted expansion of specific functionalities, each performing its own role to reduce costs and increase efficiency.

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