Vitalik's Wuzhen Speech Full Text: Layer 2 Is the Future of Ethereum Scaling
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Vitalik's Wuzhen Speech Full Text: Layer 2 Is the Future of Ethereum Scaling
Vitalik said that in the short term, Optimistic Rollup is a viable option, but in the long term, I prefer ZK Rollup.
Navigating Web3 tides with focused insightsSpeaker: Vitalik Buterin, Ethereum Co-Founder
Source: ChainNews
On October 26, the seventh Wanxiang Blockchain Global Summit was held at the W Hotel in Shanghai's Bund. Ethereum co-founder and chief scientist of Wanxiang Blockchain Labs, Vitalik Buterin, shared his insights via live stream on the current hot topic of Layer 2 scaling. Below is the full transcript of his speech:
Recently at the Wanxiang Summit, as well as many other conferences, I've repeatedly emphasized one key theme: scalability. Scalability is one of the greatest challenges facing the blockchain industry. Today’s biggest challenge lies in the fact that while blockchains are effective at decentralization and security, they can only handle a very small volume of transactions—meaning their TPS (transactions per second) is extremely limited. A few years ago, this state of affairs didn’t pose much of a problem because there were relatively few blockchain users. But now we're seeing growing demand from an increasing number of people who want to use blockchains, and more people than ever wish to do increasingly complex things on-chain. New applications such as DeFi and GameFi have emerged, creating diverse use cases that people want to realize. This means blockchains must scale to provide sufficient space for all these applications.
There is a simple way and a difficult way to achieve blockchain scalability. The simple approach involves increasing parameters like block size and gas limits so that the network can process significantly more transactions. However, while this method appears straightforward, it comes with a major drawback: sacrificing decentralization. Such scaling creates massive systems where each individual node must process large volumes of data. These systems risk losing decentralization, since very few people would be able or willing to run such large nodes.
The other, more sustainable approach to blockchain scalability is Layer 2 technology. Layer 2 encompasses various techniques—including lightning networks—and some applications already utilize state channels or other solutions.
The most general-purpose technology we see today is Rollups. The concept behind rollups has existed in different forms since 2014 and matured around 2019. In 2019, I published a blog post—as shown in this slide—outlining a roadmap centered on rollup-based scaling. I wrote then that we need scalability, but native Ethereum scaling through execution sharding (where each shard processes transactions independently) would take a long time due to significant technical hurdles. Therefore, we’d have to wait years before achieving native execution sharding on Ethereum. For now, our solution is rollups. We’ve already seen multiple rollup projects emerge in the market. It's clear that rollups work, are versatile, and can dramatically improve scalability—by at least 100x currently. Data sharding is a simpler form of sharding: instead of building powerful shards capable of processing transactions, we build shards that simply store and verify data. This is a more achievable version of sharding.
With such data sharding, we can further boost rollup scalability by another 100x. Everyone knows that rollups enable scaling—we all understand this intuitively. For Ethereum, rollups are the only viable path to scalability.
The difference between last year and this year is notable. Last year, most rollup-based scaling efforts were still theoretical. While Loopring already existed, few others did. But this year, many rollup projects have launched their mainnets, offering transaction fees far lower than those on Ethereum. I believe these costs will continue to decline, and I’ve seen numerous optimizations aimed at reducing the amount of on-chain data storage required. By minimizing the data stored on-chain, we can further reduce the gas fees associated with rollup transactions. For example, Loopring employs many optimization techniques and is already at least 30 times cheaper than Ethereum.
Projects like Arbitrum One and Optimism currently don't implement any advanced optimizations, but they are actively working toward them. Once they adopt these optimizations, both rollup solutions will become even more cost-effective. Thus, with such rollup designs, transaction fees can drop significantly—already much lower than last year’s levels—and if sharding is implemented, fees could fall even further.
Today, we observe a wide variety of rollup technologies, each composed of multiple technical components. Currently, two primary branches dominate: Optimistic Rollups, which rely on fraud-proof security models, and ZK Rollups, which use zero-knowledge proofs. Each has distinct advantages. Optimistic Rollups are technically simpler and thus easier to build, especially for general-purpose applications like Ethereum smart contracts. ZK Rollups are more complex but offer stronger security and support instant withdrawals, unlike Optimistic Rollups, which require a one-week waiting period for withdrawal finality. Technically speaking, ZK Rollup technology isn’t yet fully mature, but I believe within a few years, ZK Rollups will support a complete version of the Ethereum Virtual Machine (EVM), making them widely usable. In the short term, Optimistic Rollups are a practical choice; in the long term, I favor ZK Rollups. Once data sharding becomes available, ZK Rollups will unlock additional applications. I’m also considering enterprise use cases—once ZK Rollups mature, enterprises won’t need private chains. They can simply use ZK Rollups connected to Ethereum, maintaining low costs while gaining interoperability with the broader Ethereum ecosystem and benefiting from public chain security.
This technology has made significant progress, with many projects gradually migrating their applications onto rollups or planning how to build new ones on rollups. Still, much work remains—especially regarding application design and infrastructure development.
If you’re an application developer, you should proactively explore how to migrate your app to rollups as quickly and securely as possible. Migration is particularly important for non-financial applications, where lowering fees is critical because users are generally unwilling to pay high transaction costs. Additionally, many applications aim to function as part of a larger ecosystem, allowing users to interact across platforms. Take Dark Forest, for instance—a fully trustless game built on Ethereum. It currently runs on testnets and could eventually move to a rollup. NFTs can also transition to rollups. Infrastructure components, financial services (such as crypto payment apps), and DAOs can all be migrated to rollups soon.
Migration paths vary significantly depending on the application. Each project must decide whether to fully migrate to a single rollup, support multiple rollups, or remain on Ethereum while connecting to rollups via cross-chain bridges. There are many architectural options, each requiring careful consideration. Next, I’ll discuss a core component of the ecosystem: infrastructure.
For users, infrastructure is crucial. ENS (Ethereum Name Service) serves as Ethereum’s decentralized domain name system. ENS is a vital piece of infrastructure. Many Ethereum users, including myself, own ENS domains—I even use mine for my personal blog, which you can visit. In the future, I expect ENS adoption to grow steadily. Currently, ENS faces a challenge: all its functionality operates solely on the Ethereum mainnet, leading to high transaction fees—a key infrastructure challenge we face today. Migrating ENS to rollups offers a promising solution to this issue.
The second key infrastructure component is light clients. To make Ethereum truly decentralized, we need secure light clients—not just for accessing the Ethereum mainnet, but also for interacting with cross-chain bridges and rollups. This would allow seamless movement between rollups without long delays.
EIP-3668 enables ENS and other applications to migrate to rollups. This is a general-purpose proposal allowing Layer 1 smart contracts to specify where secondary-layer state information should be fetched and verified. It allows untrusted light clients to validate Layer 2 data. With ENS, you can register a domain and update it on Layer 2. Regardless of which Layer 2 it resides on, users can access this information using standardized software. This vision is highly exciting.
Light clients enable nodes to verify blockchains without running full clients or validating every transaction. Light clients are essential for achieving decentralization in the blockchain ecosystem. What we’re doing now—through the PoS upgrade—is enhancing support for light clients so they perform equally well under both PoS and PoW. An algorithm allows light clients to verify blocks secured by committee signatures, enabling secure, trustless access to the blockchain without relying on centralized servers. However, the light client system itself needs further expansion to support integration with rollup systems. This is critically important. We must preserve decentralization and continue advancing this upgrade across all Layer 2 protocols.
To conclude:
Layer 2 is the future of Ethereum scaling. Using Layer 2 to scale Ethereum is currently the safest solution. Preserving network decentralization while achieving functionality is essential, because decentralization is the core principle of blockchain.
EVM-compatible rollups are now available, delivering strong scalability without compromising performance. They maintain existing user and developer experiences. Developing on rollups is essentially the same as developing on Ethereum, with only minor differences—such as variations in block production and bundling methods. Since the virtual machine remains compatible with the Ethereum VM, all Ethereum capabilities are preserved, along with its crucial attribute of decentralization.
At the same time, we must continue building out supporting infrastructure, enriching the ecosystem, and ultimately realizing Ethereum’s full scaling roadmap. We already have a clear development path, much of which has been implemented or is under active development. Looking ahead, I anticipate many more exciting achievements. I am deeply encouraged by the current state of the Ethereum ecosystem. Thank you.
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