In the burgeoning landscape of blockchain technology, the need for scalability has never been more apparent. The events of 2017, when CryptoKitties crashed the Ethereum network, served as a wake-up call, revealing the limitations of the Ethereum Virtual Machine (EVM) amidst the growing adoption of decentralized finance (DeFi) and non-fungible tokens (NFTs). With over $100 billion currently locked in DeFi and an increasing number of NFT transactions, understanding these limitations is critical.
As the crypto community has sought solutions, layer 2 options emerged as a mechanism to offload transactions from the EVM and alleviate the strain on the network. However, this approach raises a crucial question: Have we been focusing our efforts in the wrong direction?
Layer 2s: A Temporary Fix?
Layer 2 solutions have been widely accepted as the panacea for the EVM’s scalability issues, claiming to enhance performance by processing transactions on secondary chains. However, evidence suggests that they merely act as a stopgap rather than a sustainable solution. Reports indicate the proliferation of layer 2 projects has become an overwhelming challenge, with new implementations appearing every 19 days in 2024. This rapid expansion may exacerbate existing issues rather than resolve them.
Centralization and interoperability issues are two primary challenges facing today’s layer 2 blockchains. Many rely on centralized sequencers that pose risks of censorship and transaction reordering. Furthermore, interoperability remains a persistent problem, as highlighted by Vitalik Buterin, which contributes to liquidity fragmentation and complicates the user experience.
Reevaluating Blockchain Performance Metrics
To truly address the scalability issue, it may be time to rethink how we measure blockchain performance. The industry has often relied on Transactions Per Second (TPS) as the standard of comparison. While TPS provides insights into throughput, it fails to account for the varying computational needs of different types of transactions. For example, a simple Ether transfer requires significantly less gas than an ERC-20 token transfer. As such, relying solely on TPS can lead to misleading conclusions about a blockchain’s capabilities.
A promising alternative is the “gas per second” metric, which evaluates the gas fees required for processing transactions, offering a more comprehensive view of network capabilities. Though establishing this standard across all chains will take time, it is a necessary step in advancing the blockchain industry.
The Unmatched Potential of Layer 1 Solutions
Layer 1 blockchains have often been overshadowed in the conversation surrounding scalability, especially with the roll-up-centric roadmap championed by many Ethereum developers. However, it’s imperative to recognize that Layer 1 solutions are the foundation of the entire crypto ecosystem and cannot be overlooked in our quest for scalability.
As the EVM currently grapples with congestion and high gas fees, it is crucial for Layer 1s to innovate and rebuild the EVM with a performance-first mindset. Approaches such as parallelization, alongside a reformed consensus mechanism and improved storage solutions, can pave the way for enhanced throughput, ultimately fostering a more developer-friendly environment and facilitating broader user adoption.
The Path Forward for the EVM
Layer 2 solutions have long been portrayed as the ideal solution for scalability; however, their shortcomings beg the question: Could the true answer lie within optimizing Layer 1 solutions instead? By embracing more accurate performance metrics and focusing on enhancing network capabilities, the EVM can reach unprecedented levels of scalability and efficiency.
The future of the EVM hinges on the industry’s commitment to continuous improvement and innovation. As we stand at the brink of this evolution, it is crucial for stakeholders to reconsider where their efforts are directed and the methods they employ in pursuit of true blockchain scalability.
Opinion by: Jay Jog, co-founder of Sei Labs.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
