Very few projects have come close to matching the security and decentralization of the Ethereum network. However, the inherent overhead of maintaining these two critical features has left Ethereum saddled with poor performance and prohibitively high costs. As a result, alternative layer 1 (L1) blockchains – which typically sacrifice security and decentralization to provide scale – have emerged to reduce Ethereum’s market share.
However, with Ethereum Virtual Machine (EVM)-equivalent scaling solutions that bring high performance and low transaction fees to Ethereum itself, the question is: Do we really need these alternative L1 networks?
Despite a difficult year for the industry, Ethereum remains as strong as ever
The risks of sacrificing security and decentralization have largely materialized with alternative L1s this year. These blockchains and their communities have been experiencing downtime, censorship, major hacks, and existential challenges caused by centralized token supply, meaning large chunks of tokens in the hands of malicious individuals. Meanwhile, the Ethereum ecosystem has had another good year.
For starters, we’ve seen the long-awaited upgrade to the Ethereum blockchain from proof of work proof of stake after their “Fusion” of September. This was important for multiple reasons, including that it led to a massive reduction in power usage from the grid. He also laid the foundation for new scaling solutions in the months and years to come.
Related: Post-Fusion ETH has become obsolete
There is also the fact that Ethereum is still the leading network when it comes to the large number of decentralized applications, platforms and services. non-fungible tokens (NFTs) implemented on it, acting as the go-to blockchain for all Web3 developers. Essentially, the market has not seen any of these competitors, often labeled “Ethereum killers”, actually “kill” Ethereum (or even harm it).
That said, it’s understandable why alternatives have proliferated in recent years. As it stands, Ethereum is deeply decentralized and secure, but it is also relatively slow and expensive to use.
Making Ethereum work
To mitigate the aforementioned challenges without significant trade-offs, Ethereum has now effectively ceded execution to Layer 2 (L2) solutions. Even Ethereum founder Vitalik Buterin has noted that layer 2 zero knowledge (ZK) Solutions are the future of Ethereum scaling. He also acknowledged that other improvements to Ethereum, such as sharding, will support this vision and make it more powerful.
ZK L2s can process a large number of transactions and automatically generate a mathematical proof of the validity of those transactions. That proof can then be sent to Ethereum and verified by its validators, thus effectively offering the same level of security as Ethereum. To make this advanced technology even more attractive, these tests do not have to reveal information about actual transactions, allowing for transaction privacy where necessary.
ZK L2s have been around for over a year now, but wider adoption has been hampered primarily by a suboptimal development experience. Due to efficiency and complexity limitations, ZK L2s have been using custom runtime environments instead of the well-known and widely used Ethereum virtual machine. After a lot of hard work and impressive engineering and cryptographic breakthroughs, the developers managed to create zkEVM, an EVM-compatible ZK L2.
This advanced technology allows all Ethereum projects to easily port existing smart contracts to a zkEVM L2 without modifying their code, thus removing the last barrier to broad adoption. Until recently, it was believed that fully featured zkEVMs were still three to five years away, but recent developments have considerably compressed that timeline, and the first practical implementation of the technology is already rolling out.
This is the key component that Ethereum has been missing to provide greater utility at scale. Decentralized financial services, NFT markets, and Web3 gaming are now feasible for regular use and global adoption. Better yet, when the next major Ethereum upgrades roll out, zkEVMs will only be able to operate even more effectively. All of this will further establish Ethereum as the blockchain of choice for all kinds of decentralized projects.
Do we need alternative layers 1?
With zkEVMs, there are no longer any barriers regarding scalability, security, decentralization, and developer experience. This then raises a fundamental question: Do we even need other L1 blockchains?
Ethereum already has the vast majority of Web3 applications built on top of it. All the other networks face a huge uphill battle if they hope to really compete with that. Even with a seamless network that addresses all scalability and security issues while remaining decentralized, any alternative L1 will still try to steer users away from an established solution that already works.
By providing immense scalability, zkEVMs can also be leveraged to redefine what is possible on Ethereum as a whole. Until now, prohibitively high transaction fees have incentivized applications that are computationally efficient or insensitive to fees, potentially leaving other innovative or major projects on the shelf due to these restrictions. In addition to scaling existing use cases, zkEVMs can breathe new life into these unexplored use cases, thus truly becoming the end of the Web3 infrastructure.
Mihailo Bjelic is the co-founder of Polygon. A graduate of the University of Belgrade, he previously worked as an IT engineer for more than 10 years creating technology products and platforms and founded or co-founded three start-ups.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.