Just over half of all Ethereum-based transactions took place on layer-2 solutions (L2s) in the first half of June 2024, marking the first time that Ethereum L2s surpassed layer-1 solutions (L1s) in terms of transaction volume.
The introduction of the Dencun upgrade (EIP-4844), which focuses on rollups, played a significant role in driving the growth of Ethereum L2s. Following the implementation of EIP-4844 on the mainnet, the total value locked (TVL) in the L2 ecosystem reached an all-time high of $48.2 billion, with over 90% of this TVL coming from rollups.
Despite the benefits of Dencun in providing more data to rollups, it does not address the underlying issues faced by these solutions. The majority of rollups still rely on centralized sequencers to achieve high throughput and performance, posing risks such as potential censorship, security vulnerabilities, and concentration of network value in the hands of a single entity.
Ethereum co-founder Vitalik Buterin has emphasized the importance of addressing these concerns, stating that complacency regarding sequencer decentralization is not an option as users increasingly favor L2 solutions over L1.
Lessons learned from the Linea incident, where users lost over $2.6 million in ETH due to a third-party exploit on the zkEVM rollup, underscore the urgent need for sequencer decentralization in L2 solutions. The decision to pause the sequencer and censor attacker addresses highlights the risks associated with centralized control in these systems.
Moving forward, it is essential for L2 projects to prioritize decentralization efforts to ensure the security and integrity of their networks. By embracing decentralized sequencers and incentivizing community participation, L2 solutions can enhance user trust, improve security, and foster long-term growth in the ecosystem.
As the industry continues to evolve, stakeholders must collaborate to embrace progressive norms and prioritize sustainable innovation over short-term gains. By working together to promote decentralization and community engagement, the future of L2 solutions can be built on a foundation of trust, security, and prosperity for all participants.