Ethereum’s evolving roadmap may lead to higher transaction costs as activity shifts back to layer one.
Key takeaways
- MegaETH leverages Ethereum for its superior blockchain execution environment.
- A stress test on MegaETH achieved 55,000 transactions per second.
- Layer two solutions that replicate layer one services face security challenges.
- Ethereum’s strength is crucial for the entire smart contract ecosystem.
- Ethereum’s scaling strategy is shifting from layer twos to enhancing layer one.
- Recent changes in Ethereum’s roadmap represent a logical pivot.
- Regulatory pressures are pushing some rollups towards centralization.
- Ethereum may return to higher transaction costs as activity shifts back to layer one.
- Current low transaction costs are due to activity migration to layer twos.
- The energy spent on layer two development is essential for Ethereum’s evolution.
- Layer twos evolved from sharding, allowing for diversity and experimentation.
- The zk-based optimistic fraud proof system ensures transaction correctness.
Guest intro
Lei Yang is cofounder and CTO of MegaLabs, the team building MegaETH, Ethereum’s high-performance Layer 2 with sub-10 millisecond block times and 100,000 transactions per second. He earned his PhD in Computer Science from MIT in 2024, with research on blockchain consensus and networking that achieved an end-to-end system at 80,000 transactions per second from 2018 to 2019.
Why MegaETH chooses Ethereum
-
— Lei Yang
-
— Lei Yang
- MegaETH achieved 55,000 transactions per second during a mainnet stress test.
-
— Lei Yang
- The stress test demonstrated MegaETH’s capacity for handling high transaction volumes.
-
— Lei Yang
- MegaETH’s performance metrics are reliable due to the mainnet environment closely emulating actual launch conditions.
-
— Lei Yang
The evolution of Ethereum’s scaling strategy
- Ethereum’s scaling strategy is shifting from relying on layer twos to enhancing the capabilities of layer one.
-
— Lei Yang
- The recent changes in Ethereum’s roadmap represent a logical pivot rather than a values pivot.
-
— Lei Yang
- The shift towards more centralized solutions by some rollups is a disappointing but understandable response to regulatory pressures.
-
— Lei Yang
- Ethereum will eventually see a return to higher transaction costs as activity shifts back to layer one.
-
— Lei Yang
The role of layer two solutions
- Building a layer two that replicates layer one services is technically uninteresting and poses security challenges.
-
— Lei Yang
- The energy spent on developing the layer two roadmap is not wasted but essential for Ethereum’s evolution.
-
— Lei Yang
- Layer twos evolved from the concept of sharding, allowing for greater diversity and experimentation in Ethereum’s ecosystem.
-
— Lei Yang
- Layer two solutions have built-in mechanisms to ensure censorship resistance and user exit options.
-
— Lei Yang
Economic sustainability in blockchain
- Chain fees are not a viable business model for Mega ETH.
-
— Lei Yang
- Economic sustainability for blockchain systems should prioritize user accessibility over short-term profit from fees.
-
— Lei Yang
- The current approach to blockchain revenue generation needs to evolve beyond simply launching tokens.
-
— Lei Yang
- The mechanism of earning yield from stablecoins on the Mageve platform allows for reinvestment into the chain without harming end users.
-
— Lei Yang
The future of rollups and governance
- Stage two rollups require a commitment to immutability in governance logic, which poses significant risks.
-
— Lei Yang
- Reaching stage two in rollups may take longer than previously expected, potentially beyond two years.
-
— Lei Yang
- Trusting the security council in stage one can lead to potential misuse of power.
-
— Lei Yang
- AI could play a crucial role in verifying software correctness, which is essential for reaching stage two.
-
— Lei Yang
The impact of AI on blockchain
- The next billion users of blockchain technology might actually be AI agents.
-
— Lei Yang
- The poor user experience in crypto for humans may actually benefit software agents.
-
— Lei Yang
- We should start prioritizing agent users in blockchain experiences.
-
— Lei Yang
- Agents can operate with unlimited energy to experiment with different transaction paths, unlike humans who may give up after a few attempts.
-
— Lei Yang
The role of proximity markets in blockchain
- Microscopic auctions in Ethereum’s block ordering are impractical for systems with very low block intervals.
-
— Lei Yang
- We believe that a proximity market model is more effective than microscopic auctions for transaction ordering.
-
— Lei Yang
- Collocating with the sequencer allows for optimized trading algorithms to operate with minimal latency.
-
— Lei Yang
- The incentive structure should encourage high-frequency traders to physically locate near the sequencer to enhance market liquidity.
-
— Lei Yang
MegaETH’s strategy for fostering innovation
- Mega ETH’s approach to fostering its own app ecosystem is essential to avoid redundancy across chains.
-
— Lei Yang
- Mega ETH is actively seeking founders to build unique applications to enhance its ecosystem.
-
— Lei Yang
- There is a significant brain drain in crypto, with many potential founders leaving for AI due to poor user experience.
-
— Lei Yang
- If we remain credibly neutral and do not actively encourage development, we risk ending up with no new applications.
-
— Lei Yang
The future of token distribution and ownership
- The current approach to token distribution in the market is flawed and inequitable.
-
— Lei Yang
- Price discovery has shifted from public to private markets, leading to unequal access for public participants.
-
— Lei Yang
- The traditional model of ownership in tech doesn’t apply to crypto, where users want to be owners of the applications they use.
-
— Lei Yang
- The approach of allowing users to participate in ownership has proven successful, as evidenced by high participation rates in funding rounds.
-
— Lei Yang
Ethereum’s evolving roadmap may lead to higher transaction costs as activity shifts back to layer one.
Key takeaways
- MegaETH leverages Ethereum for its superior blockchain execution environment.
- A stress test on MegaETH achieved 55,000 transactions per second.
- Layer two solutions that replicate layer one services face security challenges.
- Ethereum’s strength is crucial for the entire smart contract ecosystem.
- Ethereum’s scaling strategy is shifting from layer twos to enhancing layer one.
- Recent changes in Ethereum’s roadmap represent a logical pivot.
- Regulatory pressures are pushing some rollups towards centralization.
- Ethereum may return to higher transaction costs as activity shifts back to layer one.
- Current low transaction costs are due to activity migration to layer twos.
- The energy spent on layer two development is essential for Ethereum’s evolution.
- Layer twos evolved from sharding, allowing for diversity and experimentation.
- The zk-based optimistic fraud proof system ensures transaction correctness.
Guest intro
Lei Yang is cofounder and CTO of MegaLabs, the team building MegaETH, Ethereum’s high-performance Layer 2 with sub-10 millisecond block times and 100,000 transactions per second. He earned his PhD in Computer Science from MIT in 2024, with research on blockchain consensus and networking that achieved an end-to-end system at 80,000 transactions per second from 2018 to 2019.
Why MegaETH chooses Ethereum
-
— Lei Yang
-
— Lei Yang
- MegaETH achieved 55,000 transactions per second during a mainnet stress test.
-
— Lei Yang
- The stress test demonstrated MegaETH’s capacity for handling high transaction volumes.
-
— Lei Yang
- MegaETH’s performance metrics are reliable due to the mainnet environment closely emulating actual launch conditions.
-
— Lei Yang
The evolution of Ethereum’s scaling strategy
- Ethereum’s scaling strategy is shifting from relying on layer twos to enhancing the capabilities of layer one.
-
— Lei Yang
- The recent changes in Ethereum’s roadmap represent a logical pivot rather than a values pivot.
-
— Lei Yang
- The shift towards more centralized solutions by some rollups is a disappointing but understandable response to regulatory pressures.
-
— Lei Yang
- Ethereum will eventually see a return to higher transaction costs as activity shifts back to layer one.
-
— Lei Yang
The role of layer two solutions
- Building a layer two that replicates layer one services is technically uninteresting and poses security challenges.
-
— Lei Yang
- The energy spent on developing the layer two roadmap is not wasted but essential for Ethereum’s evolution.
-
— Lei Yang
- Layer twos evolved from the concept of sharding, allowing for greater diversity and experimentation in Ethereum’s ecosystem.
-
— Lei Yang
- Layer two solutions have built-in mechanisms to ensure censorship resistance and user exit options.
-
— Lei Yang
Economic sustainability in blockchain
- Chain fees are not a viable business model for Mega ETH.
-
— Lei Yang
- Economic sustainability for blockchain systems should prioritize user accessibility over short-term profit from fees.
-
— Lei Yang
- The current approach to blockchain revenue generation needs to evolve beyond simply launching tokens.
-
— Lei Yang
- The mechanism of earning yield from stablecoins on the Mageve platform allows for reinvestment into the chain without harming end users.
-
— Lei Yang
The future of rollups and governance
- Stage two rollups require a commitment to immutability in governance logic, which poses significant risks.
-
— Lei Yang
- Reaching stage two in rollups may take longer than previously expected, potentially beyond two years.
-
— Lei Yang
- Trusting the security council in stage one can lead to potential misuse of power.
-
— Lei Yang
- AI could play a crucial role in verifying software correctness, which is essential for reaching stage two.
-
— Lei Yang
The impact of AI on blockchain
- The next billion users of blockchain technology might actually be AI agents.
-
— Lei Yang
- The poor user experience in crypto for humans may actually benefit software agents.
-
— Lei Yang
- We should start prioritizing agent users in blockchain experiences.
-
— Lei Yang
- Agents can operate with unlimited energy to experiment with different transaction paths, unlike humans who may give up after a few attempts.
-
— Lei Yang
The role of proximity markets in blockchain
- Microscopic auctions in Ethereum’s block ordering are impractical for systems with very low block intervals.
-
— Lei Yang
- We believe that a proximity market model is more effective than microscopic auctions for transaction ordering.
-
— Lei Yang
- Collocating with the sequencer allows for optimized trading algorithms to operate with minimal latency.
-
— Lei Yang
- The incentive structure should encourage high-frequency traders to physically locate near the sequencer to enhance market liquidity.
-
— Lei Yang
MegaETH’s strategy for fostering innovation
- Mega ETH’s approach to fostering its own app ecosystem is essential to avoid redundancy across chains.
-
— Lei Yang
- Mega ETH is actively seeking founders to build unique applications to enhance its ecosystem.
-
— Lei Yang
- There is a significant brain drain in crypto, with many potential founders leaving for AI due to poor user experience.
-
— Lei Yang
- If we remain credibly neutral and do not actively encourage development, we risk ending up with no new applications.
-
— Lei Yang
The future of token distribution and ownership
- The current approach to token distribution in the market is flawed and inequitable.
-
— Lei Yang
- Price discovery has shifted from public to private markets, leading to unequal access for public participants.
-
— Lei Yang
- The traditional model of ownership in tech doesn’t apply to crypto, where users want to be owners of the applications they use.
-
— Lei Yang
- The approach of allowing users to participate in ownership has proven successful, as evidenced by high participation rates in funding rounds.
-
— Lei Yang
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Source: https://cryptobriefing.com/lei-yang-megaeth-achieves-55000-transactions-per-second-ethereums-scaling-strategy-pivots-back-to-layer-one-and-the-challenges-of-layer-two-security-bankless-2/
