After being betrayed by Vitalik, L2 bots are rushing to shed their "cheap" label. What kind of restructuring will they undergo?

Author: Jae, PANews

As founders question their own ecosystem, a debate about the nature of scaling, the progress of decentralization, and future dominance is pushing L2 to a crossroads.

With Ethereum co-founder Vitalik Buterin raising sharp questions about the technical approach to scaling, the L2 ecosystem is experiencing a profound "identity crisis."

Related reading: EF slims down and gets warmer, L2 repositions itself, Vitalik's Ethereum "rebirth script"

Subsequently, the heads of projects such as Arbitrum, Optimism, Base, and Starknet spoke out, engaging in a heated debate about L2's value proposition, business model, and ecological philosophy.

Optimism: Acknowledging engineering obstacles and embracing modular transformation

As a pioneer in the Optimism Rollup field, Optimism's response appears pragmatic yet optimistic. Its co-founder, Karl Floersch, frankly stated that he is willing to accept the challenge of building a modular L2 stack that supports "full-spectrum decentralization".

While Optimism remains a staunch advocate of decentralization, Floersch did not shy away from the harsh realities. He acknowledged that achieving full decentralization for Optimism-based L2 systems still faces three major engineering challenges:

1. The withdrawal cycle is too long: the current fraud proof mechanism still requires a 7-day challenge period, which leads to low capital efficiency and detrimental user experience.
2. Stage 2 proof systems are not yet ready: the so-called "Stage 2 proof systems" on the market are not yet sufficient to securely manage hundreds of billions of dollars in assets without human intervention.
3. Lack of cross-chain application development tools: Developers lack standardized tools for managing multi-chain applications, making ecosystem integration difficult.

Optimism's choice is "deep modularity." Floersch supports the native Rollup pre-compilation scheme emphasized by Vitalik and plans to integrate it into the OP Stack. This essentially provides a "plug-and-play" foundation for all projects on the Superchain and will inherit the security of the Ethereum mainnet at a lower cost.

For Optimism, the way forward is no longer just providing an execution environment, but building a set of standardized protocol specifications with high interoperability. In this way, Optimism's competitive advantage will shift from gas costs to developer experience and network synergy, and its role will transform from a "scaling solution provider" to an "ecosystem standard setter".

Arbitrum: Firmly defends its expansion sovereignty, warns of the risk of "institution migration"

If Optimism represents moderate reformism, then Arbitrum represents hardline establishment.

Goldfeder's description of the "downgrade" of L2 scaling functions expresses a firm stance in upholding the view that scaling remains an unshakable lifeline of L2's value.

He emphasized that Arbitrum chose Ethereum as its settlement layer based on its extremely high security and reasonable settlement costs. This is a commercially optimal choice, not a technological appendage.

Goldfeder also refuted the argument that "L1 scaling can replace L2" with data. At peak transaction volumes, Arbitrum and Base have exceeded 1,000 TPS (transactions per second), while the Ethereum mainnet only achieved double digits during the same period.

Therefore, even with mainnet scaling, Ethereum's nature as a general-purpose settlement layer makes it difficult to meet the extreme concurrency requirements of application scenarios such as social networking, gaming, and high-frequency trading.

Even more threatening is Goldfeder's warning of "institutional migration." He points out that many institutions choose L2 due to the synergistic combination of Ethereum's security backing and L2's flexibility. If this symbiotic relationship breaks down, these institutions, in pursuit of performance sovereignty, are highly likely to migrate to independent L1 or other ecosystems.

This has transcended technical debate and escalated into an ecosystem game. Arbitrum's subtext is: denying the value of L2 scaling is weakening the overall appeal of Ethereum.

Base: Shedding the label of cheap Ethereum and pursuing application differentiation.

Base, incubated by Coinbase, offers a unique perspective that connects Web2 and Web3. Its co-founder, Jesse Pollak, agrees with Vitalik's view that L2 cannot simply be "a cheaper Ethereum".

With mainnet gas costs continuing to decrease, this kind of homogeneous price war has lost its strategic significance. Base will focus on developing differentiated features to build a competitive advantage, especially in user experience and product entry barriers.

1. Eliminating mnemonic phrases: Base is vigorously promoting the application of account abstraction and related standards, allowing users to manage their wallets directly through Face ID or Touch ID, eliminating the dependence on mnemonic phrases, and smoothing out the biggest barrier to Web3 usage. This user experience cannot be achieved by simply expanding the L1 underlying layer.
2. Deeply integrated privacy features: For enterprise and sensitive applications, it integrates lighter and more efficient privacy computing tools, allowing users to enjoy the transparency of blockchain while effectively protecting their personal data.
3. Incubate consumer-grade applications: Transform Base into a service layer for end users through consumer-grade application scenarios such as social networking, games, and content creation.

Overall, Base's strategic positioning is to become the "retail front end" of Web3, while Ethereum is content to play the role of the "settlement back end".

While focusing more on the application layer, Base has not neglected the security of the underlying layer. Pollak stated that Base is working towards "Stage 2," aiming to reduce its reliance on centralized sorters.

The Ethereum ecosystem is entering a period of adjustment, with L2 becoming more functionally differentiated.

Interestingly, among all the responses, StarkWare CEO Eli Ben-Sasson adopted the most detached stance, even carrying a hint of "prophecy." He implied that native L2 servers like Starknet, based on ZK (zero-knowledge proof) technology, naturally fit the "dedicated execution environment" described by Vitalik.

Ben-Sasson's perspective reveals a trend of the L2 ecosystem shifting towards a "multi-functional hub." While Optimistic Rollups are still struggling with decentralized proofs, ZK-Rollups are already prepared to handle complex computational demands that the mainnet cannot fulfill.

The Ethereum ecosystem will also undergo a more profound division of functions:

• L1: It aims to enhance its own capabilities by increasing and optimizing data availability through increasing the gas limit, providing a solid underlying security for the entire ecosystem.
• L2: Moving away from "homogeneous" competition, it evolves from a simple "low-cost branch" into a "dedicated environment" serving specific technological and commercial needs, such as large-scale full-chain games, complex logic computations, and high-performance transactions. Even if these application scenarios are technically feasible at L1, they cannot generate economic benefits.

This debate marks a major adjustment in the Ethereum ecosystem, and Vitalik's questioning will force the entire L2 track to undergo a revaluation.

Ethereum is evolving from a master-slave structure into a multi-polar, complementary matrix system. The era of homogeneous expansion has come to an end, and the era of differentiated innovation may have arrived.

For investors and developers, the evaluation criteria for L2 are also undergoing a qualitative change: whoever can create "uniqueness" that the mainnet cannot provide will have a ticket to the next five years.