In the first half of June 2024, slightly over 50% of all transactions on Ethereum were conducted on layer-2s (L2s). This marked the first time that Ethereum (ETH) L2s had surpassed layer-1s (L1s) in terms of transaction volume.
The implementation of the Dencun (EIP-4844) upgrade, which focuses on rollups, played a crucial role in driving the growth of Ethereum L2s. Following the mainnet launch of EIP-4844, the total value locked (TVL) in the L2 ecosystem reached an all-time high of $48.2 billion, with over 90% of this TVL contributed by rollups.
While Dencun offers improved data accessibility for rollups, it does not address their inherent issues. Many rollups still rely on centralized sequencers to achieve higher throughput and performance, compromising the decentralization principles of blockchain and exposing users to potential censorship and security risks.
The increasing preference for L2s over L1s by users has raised the urgency for addressing the decentralization of sequencers in rollups. The recent exploit on Linea, a zkEVM rollup, resulting in a loss of over $2.6 million in ETH, highlighted the importance of decentralized sequencers and the dangers of centralized decision-making within the ecosystem.
It is imperative for the L2 space to prioritize the decentralization of sequencers to ensure the security and integrity of the network. While the journey towards full decentralization may present challenges, it is essential for the long-term sustainability and growth of the ecosystem.
The shift towards decentralized sequencers not only enhances network security but also fosters deeper community engagement and introduces innovative revenue streams for users. By aligning the goals of short-term investors and long-term contributors, sequencer decentralization can create a more sustainable and prosperous environment for all stakeholders.
The current availability of technical solutions, such as liquid staking tokens (LSTs), and the emerging trend of Bitcoin L2s offering mining rewards through decentralized sequencers, underscore the urgency for the L2 space to embrace progressive norms and prioritize decentralization.
In conclusion, the L2 space must transition from short-term gains to sustainable, long-term innovation, embracing decentralization as the cornerstone of its future. Every stakeholder and rollup project must work in unison to achieve a more decentralized and secure ecosystem, ensuring the collective growth and prosperity of the entire community.
Tom Ngo, the executive lead at Metis, an Ethereum layer-2 blockchain, is a guest author for Cointelegraph. This article is intended for general informational purposes and does not constitute legal or investment advice. The views expressed are solely those of the author and do not necessarily reflect those of Cointelegraph.