Ethereum 2 - phase 2’s deployment, as of today, it’s still 2-3 years away optimistically speaking. The main concern, at present, is that Ethereum needs scalability urgently due to its increased use.
So the following idea was presented: “A rollup-centric approach to Ethereum’s development” which means a new focus and possibly a new roadmap to prioritize the use and development of L2 solutions specifically rollups on Ethereum.
Sharding was meant to become the chief means of scalability according to the proposed roadmap change that made Ethereum 2 possible. So instead of designing Serenity as a fork of the current blockchain, the Ethereum core developers decided to create a new blockchain from scratch that would include sharding and would finally help scale the Ethereum blockchain.
Unsurprisingly, results for homogeneous sharding in blockchains won’t come fast and possibly won’t be enough to scale the blockchain. So now the new proposal focuses on L2 channels, bridges across shards, diverse L2 to L2 transactions and even a potential development of an intermediate compiling language between the Ethereum Virtual Machine and Optimistic Virtual Machine so that compiled code could run across different L2 rollups and L1 contracts in an attempt to make them composable somehow.
By creating an ecosystem that prioritizes L2, Ethereum also opens the question: are the ideas about the One Blockchain To Rule Them All, an all-purpose smart contract platform or the Internet Computer that Ethereum presents itself as, really true? Specially when it needs off-chain processing (in the form of rollups) to process its own transactions even after the advent of Ethereum 2 – phase 2. Moreover, Ethereum 2 might need to use L2s to execute their smart contracts and even shards will need some type of L2 as well to connect to each other efficiently as cross-shard communication on Ethereum layer 1 contains a significant amount of friction.
As described by the rollup-centric plan: “a rollup-centric roadmap could also imply a re-envisioning of eth2’s long-term future: as a single high-security execution shard that everyone processes, plus a scalable data availability layer.”
Degrading the sharded layer 1 on Ethereum to a few data availability layers or maybe a single high-security execution shard plus a data availability layer opens the way for more computation, processing and dapps to be deployed on layer 2, on other blockchains and even on other blockchains’ L2 channels. Needless to say, L2 channels can connect to pretty much to everything depending on its design and are not blockchain specific. Let’s explore this idea with the phenomenon of Bitcoin on Ethereum.
Presently, Bitcoin is “wrapped” on Ethereum using several devices, the most commonly being custodial services either as a centralized party, semi-trustless (trustless design with root keys-address on critical points) or trustless multi-signatures addresses of some kind. The basic idea is that Bitcoin is locked and can’t be moved on the Bitcoin blockchain as long as it’s being used on the Ethereum blockchain. Once the owner of some of the wrapped version of Bitcoin on Ethereum decides to go back to using the Bitcoin token on the Bitcoin blockchain, the wrapped version get burned, transferred to a frozen state or contract or rendered immobile on the Ethereum blockchain so that no one else is able to use them unless new Bitcoin tokens get locked on the Bitcoin blockchain again. All this has been done on-chain on both chains.
New designs can take advantage of the newer rollup technology to make this process faster and cheaper by opening a channel, grouping transactions in a rollup and closing the channel after a while. But the design doesn’t have to stop there. Prioritizing L2 also means that off-chain computation can be used to allocate balances across multiple chains. Going back to the Bitcoin on Ethereum example, it could mean that an entire L2 system could combine Liquid or Lightning with Rollups.
But it also means that Ethereum is not the all-mighty – all-powerful technology that was once promised as it needs primarily off-chain computation and potentially other blockchains to fulfill the promise of becoming the all-purpose smart contract platform simply because most of this computation won’t happen on it rather it will happen outside of it. So the world computer won’t be Ethereum, it will be a densely populated network of blockchains and decentralized systems which Ethereum and its shards will only be a small part of.
Published by: Saxemberg on Oct. 5, 2020