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On managing tradeoffs between Layer 1 and Layer 2 innovations

Vitalik Buterin
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Making changes to the base layer of the blockchain (layer 1) can be functionally beneficial in the short term. However, in the long term, large amounts of protocol changes to layer 1 could lead to political uncertainty and centralization, two things that completely contradict what makes a blockchain a blockchain.

Effects of Changing Layer 1

Short-term Pros: - Building within the base layer can help grow the block size and increase its scalability. - The base layer becomes more stabilized as it is developed. Long-term Cons: - Building into the base layer itself would create a high level of governance overhead. - Platforms would have to continually discuss and coordinate new technological changes. - Blockchains would have to consider adopting activist governance.

Long-term Benefits of Changing Layer 2

  • Building on top of the base layer with layer 2 never alters the blockchain itself. 
  • Developing layer 2 always for greater flexibility scalability, privacy, and versatility

Techniques to Develop Layer 2

  • Cross-shard transactions
  • Asynchronous Cross-shard Communication
  • Cross-shard Yanking
  • Synchronous Execution Schemes
  • Execution Engines

Necessary Short-term Changes to Layer 1

Layer 1 can still improve by: 1. Reducing latency 2. Developing the minimal level of complexity 3. Stabilizing to allow for layer 2 developments

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