Ethereum 2 Rollup Centric

Resources

• “Scaling Ethereum in 2020 and Beyond” - Vitalik Buterin
• A rollup-centric ethereum roadmap

TL;DR

• Base layer scalability is still a few years into the future
• Rollups have advanced quickly
• Ethereum in short-medium term will focus on scaling that allows for increase how much data blocks can hold vs on-chain computation/IO operations (this is to give way to support centric future, see layer-2-scaling)
• A “phase 1.5 and done” future where the base layer focuses on just consensus and data availablility (i.e. data shards, not computation shards, see ethereum-2-sharding)

Adapting Infrastructure for Rollups

• ENS name support on L2
• L2 protocols built into wallets
• More work on cross-L2 transfers, making the experience of moving assets between different L2s as close to instant and seamless as possible

Economic Sustainability Benefits of Rollup-Centrism

It’s an inescapable fact that a crypto project must be financially sustainable, and in 2020 this means millions or even tens of millions of dollars of funding. Some of this can be covered by common public-good-funding entities such as Gitcoin Grants or the Ethereum Foundation, but the scale of these mechanisms is just not sufficient to cover this level of funding. However, layer 2 projects launching their own token is sufficient - provided, of course, that the token is backed by genuine economic value (ie. prediction of future fees captured by the L2).

An important secondary benefit of a rollup-centric roadmap is that it leaves open space for L2 protocols, and these L2 protocols have the ability to collect fees/MEV 116 that can fund development, either directly or indirectly (by backing a token that funds development). The Ethereum base layer has an important need to be credibly neutral, making in-protocol public goods funding difficult (imagine ACD calls trying to agree on who deserves how much money), but L2s having their own public goods funding mechanisms (and/or contributing to Gitcoin Grants) is much less contentious. Leaving open this space can thus be a good strategic move for the long-term economic sustainability of Ethereum as a whole.

TPS Breakdown

It seems very plausible to me that when phase 2 finally comes, essentially no one will care about it. Everyone will have already adapted to a rollup-centric world whether we like it or not, and by that point it will be easier to continue down that path than to try to bring everyone back to the base chain for no clear benefit and a 20-100x reduction in scalability….This implies a “phase 1.5 and done” approach to eth2, where the base layer retrenches and focuses on doing a few things well - namely, consensus and data availability.