Does ETH really need L2s?

[Abiky]

Gas fees are so cheap right now, compared to what they were in the ICO era of 2017. Fractions of a penny (USD), according to Etherscan. Vitalik and team continue to work on the main Ethereum blockchain, focusing heavily on the network's scalability. This, combined with lower market prices, resulted in lower gas fees.

That makes me wonder, does ETH need L2 networks? At this point, they seem highly-unecessary. Wouldn't you agree?

Your input would be greatly appreciated. Thank you very much.

[MAAManda]

That makes me wonder, does ETH need L2 networks? At this point, they seem highly-unecessary. Wouldn't you agree?

Yes, I agree. It's true that Ethereum (ETH) network fees were too high when they were experiencing transaction congestion, it was around $25 - $30+ at that time. But since the consensus transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS), those high fees have never happened again. L-2 solutions were really needed when network fees were high, but now they're no longer needed.

[Akbarkoe]

Gas fees are so cheap right now, compared to what they were in the ICO era of 2017. Fractions of a penny (USD), according to Etherscan. Vitalik and team continue to work on the main Ethereum blockchain, focusing heavily on the network's scalability. This, combined with lower market prices, resulted in lower gas fees.

That makes me wonder, does ETH need L2 networks? At this point, they seem highly-unecessary. Wouldn't you agree?

Your input would be greatly appreciated. Thank you very much.

Previously the presence of L2 was due to concerns about network costs and also very lack of scalability, with the main network costs cheaper or even not much different from the gass fee at layer two and the network speed is much better why should you use L2 right?
I agree with you, but this will only kill their layer 2 business which has improved the Ethereum ecosystem itself and we know that layer two ETH is very much so far.
 
The L2 developers whether they hate the policy or not I don't know, but it should encourage better innovation in the future.

[OmegaStarScream]

They used to be useful at some point, but you're right, probably not anymore.

- LRC? and all the hype because GameStop was going to use it? dead.
- ZkSync? 21M TVL. Dead.
- Linea? even though backed by ConsenSys (same company as MetaMask)... almost no one uses it anymore.
- Fantom (rebranded to Sonic)? 30m TVL..

Manta, Scroll, Mantle, etc. all of those chains which used to thave a lot of hype around them, barely anyone hears about them anymore.

Lots of other ones managed to raise seven or eight figures... with nothing to show for it.

- Arbitrum? we recently found out that they can freeze funds  

There are some other names that are strongly backed by CEXes or dapps (BSC, COinbase, Polygon, etc.) so I don't see them going anywhere anytime soon... but other than that, the vast majority of them should simply not exist in my opinion.

[MArsland]

Gas fees are so cheap right now, compared to what they were in the ICO era of 2017. Fractions of a penny (USD), according to Etherscan. Vitalik and team continue to work on the main Ethereum blockchain, focusing heavily on the network's scalability. This, combined with lower market prices, resulted in lower gas fees.

That makes me wonder, does ETH need L2 networks? At this point, they seem highly-unecessary. Wouldn't you agree?

Your input would be greatly appreciated. Thank you very much.

Previously the presence of L2 was due to concerns about network costs and also very lack of scalability, with the main network costs cheaper or even not much different from the gass fee at layer two and the network speed is much better why should you use L2 right?
I agree with you, but this will only kill their layer 2 business which has improved the Ethereum ecosystem itself and we know that layer two ETH is very much so far.
 
The L2 developers whether they hate the policy or not I don't know, but it should encourage better innovation in the future.

For now I agree because the fees are relatively cheap and affordable, but will this be consistent and has Ethereum truly solved scalability?
I'm also curious if returning to L1 will maintain low fees or if it will lead to congestion again. Perhaps that's where L2 comes in as an alternative to keep transaction fragmentation fast and cheap. While I don't deny that many L2 platforms are currently experiencing a downturn, losing users and/or declining TVL, only a few like Arbitrum, Base and Optimism are thriving.

[sergiorus]

Gas fees are so cheap right now, compared to what they were in the ICO era of 2017. Fractions of a penny (USD), according to Etherscan. Vitalik and team continue to work on the main Ethereum blockchain, focusing heavily on the network's scalability. This, combined with lower market prices, resulted in lower gas fees.

That makes me wonder, does ETH need L2 networks? At this point, they seem highly-unecessary. Wouldn't you agree?

Your input would be greatly appreciated. Thank you very much.

Not anymore. Back in the day they were indeed a saviour, offering the functionality of Ethereum for cheap amidst absolutely atrocious fees on Mainnet. Hence it also seemed fair that some of the leaders in this sector have raised 9 figures from various VC firms but as per usual, it turned out to be a short lived mania and many venture capital firms are basically wiped out losing 90% of their investments now (and still having them in ''vesting'').

Just recently I sent USDT on Mainnet with a tx fee of $0.02. No, we don't need L2 chains anymore and the market shows that.

[asriloni]

That's the main reason why Vitalik has said that L2 is not longer make sense when it comes to the vision of scalability. Since ETH has been scalling up, and it's costing us much more cheaper than what it used in the past. The existence of L2 rollup, which is focusing on the scalability is no longer needed.

However, it doesn't mean all of L2 are useless caused by some are still offering the feature that ethereum can't do it like a privacy-rollup. It means L2 such as Linea or other that offers specialized functionality that ethereum can't provide is still make sense to keep it up.

So the existence of L2 is still needed, but in term of a functionality that has not offered by L1.

[sergiorus]

That's the main reason why Vitalik has said that L2 is not longer make sense when it comes to the vision of scalability. Since ETH has been scalling up, and it's costing us much more cheaper than what it used in the past. The existence of L2 rollup, which is focusing on the scalability is no longer needed.

However, it doesn't mean all of L2 are useless caused by some are still offering the feature that ethereum can't do it like a privacy-rollup. It means L2 such as Linea or other that offers specialized functionality that ethereum can't provide is still make sense to keep it up.

So the existence of L2 is still needed, but in term of a functionality that has not offered by L1.

Native privacy is coming to Ethereum eventually anyway:
https://www.tradingview.com/news/u_today:e39300db6094b:0-ethereum-to-integrate-erc-5564-in-push-for-privacy/
https://intellectia.ai/news/crypto/new-proposal-for-ethereum-privacy-protocol

Private or not, all L2 chains will become useless. Inevitable.

[hugeblack]

Apart from providing significantly faster and cheaper transactions, L2 does not offer any serious solutions. For example, there are no L2 developments or solutions that focus on privacy or performing more functions. Therefore, I agree with you that L2 is no longer as important as it was in the past.

[o48o]

They used to be useful at some point, but you're right, probably not anymore.

- LRC? and all the hype because GameStop was going to use it? dead.
- ZkSync? 21M TVL. Dead.
- Linea? even though backed by ConsenSys (same company as MetaMask)... almost no one uses it anymore.
- Fantom (rebranded to Sonic)? 30m TVL..

Manta, Scroll, Mantle, etc. all of those chains which used to thave a lot of hype around them, barely anyone hears about them anymore.

Lots of other ones managed to raise seven or eight figures... with nothing to show for it.

- Arbitrum? we recently found out that they can freeze funds  

There are some other names that are strongly backed by CEXes or dapps (BSC, COinbase, Polygon, etc.) so I don't see them going anywhere anytime soon... but other than that, the vast majority of them should simply not exist in my opinion.

Hype isn't really significant measurement for anything. It's just a byproduct of mooning and it will die when bag holders give up.
I am astonished that even people who invested "fond out" that they can freeze funds only when it happens? Don't people do any research on the tech anymore?

Real issue is that there are very few things blockchain and smart contracts are good for, and only few projects can win that race. Best tech might not even be the one that gets adopted, because people often choose convenience over better (and in this case, more decentralized) tech.

[$crypto$]

Many L2 networks are slowly dying in the community, so now it is no longer a solution because the ETH network has returned to normal costs --- maybe in the past we could spend more than $30 to do a swap but now it is no longer like that, the scalability is much better.

zkSync and Linea are the most rumored good L2 network but now it seems that many do not make transactions on this network anymore, I don't know, we are now back to the beginning where ETH is much better than L2.

[jossiel]

They are no longer relevant and that's better for Ethereum itself.

Because before, the problem due to L2s, smart contracts, etc. It has made ETH transactions to be so expensive and unavailable to everyone.

It made the transactions so badly needed that we'll just pay for it to happen and not for us to do it out of our will because we're simply obliged of proceeding.

[AVE5]

Gas fees are so cheap right now, compared to what they were in the ICO era of 2017. Fractions of a penny (USD), according to Etherscan. Vitalik and team continue to work on the main Ethereum blockchain, focusing heavily on the network's scalability. This, combined with lower market prices, resulted in lower gas fees.

That makes me wonder, does ETH need L2 networks? At this point, they seem highly-unecessary. Wouldn't you agree?

That depends on the magnitudes of their differences at now when compared because, the Layer 2 network is a projection for users to process their transactions faster off from the Layer 1 networks.
The L2 network has also been of ease of the blockchain from facilitating on the Eths transactions that's beyond transactions speed but also transaction fees as that of L1 fees captures your interest.
I haven't done Eth transactions for a while since I'm mostly focused on holding now.
So now, despites how interesting the L1 network may seem now, the L2  can't be underrated on that cause because in a congestion network timeframe the L2 would be more convenient in the long term.

[nelson4lov]

L2s have now outlived their usefulness because the primary reason why we had L2 as a concept in the first place is because L2s are used to scale ethereum. However, I don't think we have reached the point where we can say that L2s are no longer needed because it is likely that Ethereum is not facing transaction bottlenecks like it did in the past because much fewer people are actually using the Ethereum Mainnet. For instance, I haven't used the ETH Mainnet for 6 months to 1 year. Imo if we switch back to Mainnet only right, we'll be right back where we started.

[TastyChillySauce00]

ETH is already good without L2 but I still like having L2 to anticipate when the fee spiked. Although ETH has been pretty consistent with its low fee, sometime there is fee spike like what happened right now.
This kind of fee spike makes me realize maybe having an alternative isn't so bad although I agree with the general opinion that most L2s are just plain useless and centralized except some.

[Ahli38]

The latest Ethereum Layer-2 network supported by Vitalik is Rise Chain. And the goal of this Layer-2 network isn’t just to solve Ethereum’s scalability issues. But it’s also to address scalability without significant security trade-offs (Source). I see that this Layer-2 network is still in the development phase with active network testing ongoing within its community. Its ecosystem is also quite active in several sectors. But this is just the latest information regarding Layer 2 on Ethereum. I personally believe that Vitalik still needs Layer 2 to support the main Ethereum network. And that is why he is still contributing to the development of rise chain.

[Abiky]

They used to be useful at some point, but you're right, probably not anymore.

- LRC? and all the hype because GameStop was going to use it? dead.
- ZkSync? 21M TVL. Dead.
- Linea? even though backed by ConsenSys (same company as MetaMask)... almost no one uses it anymore.
- Fantom (rebranded to Sonic)? 30m TVL..

Manta, Scroll, Mantle, etc. all of those chains which used to thave a lot of hype around them, barely anyone hears about them anymore.

Lots of other ones managed to raise seven or eight figures... with nothing to show for it.

- Arbitrum? we recently found out that they can freeze funds  

There are some other names that are strongly backed by CEXes or dapps (BSC, COinbase, Polygon, etc.) so I don't see them going anywhere anytime soon... but other than that, the vast majority of them should simply not exist in my opinion.

Arbitrum freezing funds? Would you mind sharing the source of such info? If this is true, then Arbitrum may not be "decentralized" as we thought it would be. It will be even worse in L2 chains backed by centralized exchanges. Coinbase's BASE network is one of them.

Besides the benefits of dirt-cheap fees and blazing-fast confirmation times, ETH-based L2s provide no value to the Blockchain. ETH remaining fast and cheap to use, could render L2s worthless. I guess the only L2s that will survive are those backed by CEXs. Only time will tell.

[Ahli38]

They used to be useful at some point, but you're right, probably not anymore.

- LRC? and all the hype because GameStop was going to use it? dead.
- ZkSync? 21M TVL. Dead.
- Linea? even though backed by ConsenSys (same company as MetaMask)... almost no one uses it anymore.
- Fantom (rebranded to Sonic)? 30m TVL..

Manta, Scroll, Mantle, etc. all of those chains which used to thave a lot of hype around them, barely anyone hears about them anymore.

Lots of other ones managed to raise seven or eight figures... with nothing to show for it.

- Arbitrum? we recently found out that they can freeze funds  

There are some other names that are strongly backed by CEXes or dapps (BSC, COinbase, Polygon, etc.) so I don't see them going anywhere anytime soon... but other than that, the vast majority of them should simply not exist in my opinion.

Arbitrum freezing funds? Would you mind sharing the source of such info? If this is true, then Arbitrum may not be "decentralized" as we thought it would be. It will be even worse in L2 chains backed by centralized exchanges. Coinbase's BASE network is one of them.

Besides the benefits of dirt-cheap fees and blazing-fast confirmation times, ETH-based L2s provide no value to the Blockchain. ETH remaining fast and cheap to use, could render L2s worthless. I guess the only L2s that will survive are those backed by CEXs. Only time will tell.

Perhaps this relates to the $71 million in funds that Arbitrum froze in connection with an exploit (Source). Those funds were the result of an exploit targeting the Kelp DAO. This action was taken as an emergency measure to prevent the attacker from accessing the funds, where Arbitrum froze them. And this action reportedly did not affect other users. I don’t think Arbitrum is fully decentralized given that they can freeze funds. And even so they need to take several further steps at the protocol level to be able to freeze those funds. Arbitrum does this through a vote that can be carried out by several Arbitrum token holders who have the authority to make decisions (Source). And this can be found in the Arbitrum DAO governance document (Source).

[MisFoxie]

I agree with you partially. When ETH gas  fee was high L2 was necessary at that time but now the gas fee is low L2 tokens aren't needed. And L2 token is also a part that help lowering ETH gas fee. Gas fee goes lower for many reasons and one of them is by lowering activity of ETH mainnet and that's what L2 network like Arbitrum, base and Optimism do. And I think the amount of L2 is enough more new one aren't needed.

[Abiky]

Perhaps this relates to the $71 million in funds that Arbitrum froze in connection with an exploit (Source). Those funds were the result of an exploit targeting the Kelp DAO. This action was taken as an emergency measure to prevent the attacker from accessing the funds, where Arbitrum froze them. And this action reportedly did not affect other users. I don’t think Arbitrum is fully decentralized given that they can freeze funds. And even so they need to take several further steps at the protocol level to be able to freeze those funds. Arbitrum does this through a vote that can be carried out by several Arbitrum token holders who have the authority to make decisions (Source). And this can be found in the Arbitrum DAO governance document (Source).

Even though the intentions were good, who's to say they won't arbitrarily freeze user funds in the future? They can do this if the government pressures them. Arbitrum should've just done a "rollback" of the chain. Just like ETH did during "The DAO" days. All with the consensus of the community, of course.

I bet other L2s aren't as "decentralized" as they claim to be. Perhaps, Polygon is the only one on the list that is decentralized. You can see why centralized L2s often offer cheaper fees and faster settlement times. It's because they've sacrificed decentralization and censorship-resistance. Either a chain sacrifices decentralization in favor of greater transaction capacity (scalability) or all the other way around. You can't have the "best of both worlds". At least, ETH's improved scalability will make L2s a thing of the past. It should only be a matter of time before this happens.