Updated on January 9, 2023 12:50 PM
According to Vitalik Buterin, co-founder of Ethereum, layer 3s will aid in the purpose of offering customised functionality, whereas the goal of Ethereum-oriented layer-2 solutions has been to hyperscale the network.
Buterin described his three ideas for how layer 3s will be used in the future in a post. A third layer on the blockchain, according to Buterin, will only be useful if it can perform a different function from layer 2s, which have been used to boost scaling by utilising Zero-Knowledge (ZK) Rollup Technology.
What Kind of Layer 3s Make Sense? was a blog article written by Ethereum co-founder Vitalik Buterin while the community was still riding high after the Merge. describing his idea behind layer 3 protocols.
However, Vitalik Buterin asserts that you cannot add a layer on top of Layer 2 in order to boost scalability. Layer-3s are another option.
Buterin pointed out that there are a lot of challenges when stacking two layers with comparable designs on top of one another. For instance, it may be challenging to stack two layers due to data availability constraints and dependency on Layer-1 capacity for urgent withdrawals.
Rollups minimise the data that needs to be stored on the Layer-1 blockchain in order for a transaction to be accessible and verified.
Rollups, according to a prior statement by Buterin, might enable Ethereum to process 100,000 transactions every second. Rollups include systems like Arbitrum, Optimism, StarkNet, and zkSync, among others.
Rollups do have some restrictions, though. Buterin claimed in his most recent blog post that data compression concerns prevent rollups in their current form from being simply piled on top of one another.
Data "can be compressed once, but it cannot be compressed again," he claimed. According to him, the reasoning behind a second compressor can typically be applied to the first compressor if it offers an advantage.
In the first instance, layer-3s can be used for particular functions like privacy. In this case, increasing scalability would not be the objective. While a Layer-2 scales applications, a Layer-3 would give the customised functionality needed for varied use cases.
In the second vision, Layer-2 makes scaling possible for general purposes while Layer-3 provides tailored scaling through specialised applications. Layer-3 would not compute data using the EVM or rollups, whose data compression is tailored for certain data formats.
In the third vision, Layer-3s can offer weakly-trusted scaling thanks to Validiums, which uses SNARKs to validate computation. Here, data accessibility is handled by a reputable third party. Buterin claims that despite having a worse security grade than rollups, validiums are significantly undervalued and far cheaper.