- Justin Bons discusses Ethereum’s scalability challenges and the proposed “shared sequencing” solution for L2 fragmentation and interoperability enhancement.
- The examination of shared sequencing hurdles includes coordination issues and existing L2 networks’ reluctance, while assessing its implications for Ethereum’s scalability efforts.
In the world of blockchain technology, Ethereum (ETH) has been a pioneer, enabling decentralized applications and smart contracts. However, the scalability limitations of the Ethereum network have long been a topic of discussion. To address this issue, Ethereum core developers have recently acknowledged the problem of fragmentation associated with layer two (L2) scaling solutions. In this article, we explore the proposed solution of “shared sequencing” and its implications for Ethereum’s scalability.
Understanding the Problem
Fragmentation refers to the challenge faced by L2 scaling solutions where different L2 networks operate independently, lacking interoperability and coordination. The proposed solution of shared sequencing aims to overcome this fragmentation issue by introducing a single sequencer that all L2 networks would agree to use. However, this approach raises concerns regarding coordination, power dynamics, and the willingness of L2 networks to relinquish control.
The Coordination Problem
Implementing shared sequencing relies on the unanimous agreement of all L2 networks to utilize a single sequencer. This presents a considerable coordination problem. It goes against human nature to willingly cede power and profit to a shared sequencer, especially when existing L2 ecosystems, such as Optimism and Arbitrum, have already established themselves with significant investments. These ecosystems were built upon the promise of L2 scaling, which adds resistance to change.
Mitigating MEV and Power Dynamics
Although techniques such as Priority-Based Scheduling (PBS) or transaction randomization can help mitigate the issues associated with Miner Extractable Value (MEV), the ability to censor, monitor, and privately order transactions still holds significant value, both real and perceived. Many L2 networks may choose not to surrender this power to a shared sequencer, making the problem seemingly unsolvable.
Competition and Interoperability
L2 networks already compete with one another based on network effects and unique offerings. Consequently, they are unlikely to embrace full interoperability with their competitors by utilizing a shared sequencer. Each L2 network is building its own shared sequencer, which ultimately brings us back to square one in terms of fragmentation.
The Direction of “Shared Sequencing”
In principle, shared sequencing is a step in the right direction as it “enshrines” more functions as part of the Layer 1 (L1) Ethereum network. It moves towards a sharded L1 approach to scaling rather than relying solely on L2 solutions. If Ethereum were to deploy enshrined roll-ups, it would be closer to achieving L1 scaling. However, the critical question remains: can this coordination problem be overcome effectively with a shared sequencer?
The Conflict of Interest
The conflict of interest arises from the fact that the two potential outcomes, shared sequencing and L1 scaling, are inherently opposed to each other. If the ETH community were to rally around the idea of shared sequencing, even refusing to use non-enshrined sequencers, there might be a possibility of success. However, this would require a small community to pivot against incentives in favor of ideology, which poses significant challenges.
The Weight of the L2 Ecosystem
The success of shared sequencing is further complicated by the immense weight of the existing L2 ecosystem. These ecosystems have a vested interest in pushing counter-narratives as L2 tokens and equity can introduce corrupting influences. Even if Ethereum manages to make a shared sequencer a shelling point for L2 networks, it does not solve the problem of varied trust trade-offs between L2s. Custodian L2s and administrative keys will still exist, adding friction to the user experience.
Advocating for a Monolithic Approach
Considering the challenges associated with shared sequencing and the trade-offs involved, a monolithic approach to L1 scaling appears to be a superior alternative. With a monolithic approach, all shards or threads remain identical to each other, without additional trust trade-offs. This approach aligns more closely with projects like DOT or ATOM, emphasizing app-chains, rather than NEAR or EGLD, which focus on monolithic sharding.
Conclusion
While appreciating the efforts of ETH core developers, including prominent researcher Drake Justin, who has taken an intellectually honest approach to solving the fragmentation problem, it is important to critically evaluate Ethereum’s current roadmap. Although progress has been made, and the community is closer to finding common ground, full L1 sharding remains a far superior approach, free from UX or trust trade-offs. The scalability challenge faced by Ethereum requires careful consideration, weighing the benefits and drawbacks of various solutions to ensure the long-term success of the network.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from cryptonewsbytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
