Solana co-founder Anatoly Yakovenko has once again criticized Layer-2 (L2) rollups, arguing that Layer-1 (L1) solutions like Solana already offer efficient, cost-effective, and secure scaling.
He believes L2s depend too much on the base layer for data availability and require complex mechanisms such as fraud proofs and multi-signature updates. He emphasized that Solana avoids these issues by having a separate execution and data layer within its L1 structure.
Solana competes with Ethereum L2s, not Ethereum itself
Yakovenko claims Solana competes with Ethereum’s L2 solutions rather than Ethereum itself. He questioned the need for multiple L2 networks, suggesting that one efficient L2 could handle all use cases. He believes the overproduction of L2s is unnecessary and leads to fragmentation. According to him, L2s are overly reliant on Ethereum while promoting their language ecosystems at the expense of the base layer.
He also dismissed concerns about Solana’s data generation, calling the 80 terabytes produced annually insignificant. He advised against launching L2s without a strong purpose, stating earlier this month that developers might as well “just launch a token” instead of creating a “valueless” L2.
Ethereum’s strategy faces questions as L2 networks grow
Ethereum co-founder Joseph Lubin recently presented a different perspective. He highlighted Ethereum’s commitment to L2 scaling at the Digital Asset Summit. He pointed to Linea, a product from ConsenSys, and Megadeth, which is expected to enhance speed and efficiency. He stressed that Ethereum’s security and the willingness of L2s to build on it provide significant advantages.
Ethereum’s March 2024 upgrade reduced L2 transaction fees by 95%, benefitting rollups but resulting in a sharp decline in base-layer revenue. By the end of the year, Ethereum’s base-layer revenue had dropped 99%. The network currently hosts over 140 scaling solutions and 60 rollups, raising concerns about fragmentation and whether Ethereum can maintain its dominant position.
Ethereum balance on exchanges. Source: ali_charts on X
Users have expressed concern about the absence of permissionless characteristics in the Ethereum network. A commentator on X complains that Ethereum users must complete Know-Your-Customer checks before acquiring ETH, so it has been granted permission. Both users and advocates of Ethereum took opposing views on this issue, with supporters explaining that their system maintains privacy elements and permissionless operation despite employing a consensus on the use of proof-of-stake.
Ethereum Faces Key Support Test
Ethereum approaches a vital support area where more than 3 million wallet addresses hold 6.12 million ETH across the price range of $1,886 to $1,944. ETH maintains a pricing value of $2,003, which draws substantial investor interest to this specific mark. Experts believe the ongoing support system will inhibit ETH from falling any lower.
On-chain data indicates that 70.43% of ETH holders are “in the money,” while 29.08% are at a loss. Most ETH holders are breakeven, meaning they have not seen significant gains. Meanwhile, a large amount of ETH has been withdrawn from exchanges. In the past 48 days, over 1.2 million ETH has moved off exchanges, bringing centralized exchange reserves down from 18.15 million to 16.97 million ETH as of March 22.