Vitalik warns: Layer 2 networks that don't meet standards by year-end will no longer be considered rollups
TechFlow Selected TechFlow Selected
Vitalik warns: Layer 2 networks that don't meet standards by year-end will no longer be considered rollups
Vitalik Buterin believes that if Phase 1 has not been achieved by the end of this year, it should not be considered a Layer 2.
Navigating Web3 tides with focused insightsOriginal author: CHRISTOPHER ROARK
Compiled by Alvis, Mars Finance
According to L2Beat, six Ethereum Layer 2 networks have reached Stage 1, while the majority remain at Stage 0.
Ethereum co-founder Vitalik Buterin stated on September 12 that he would no longer consider any network a "Layer 2" if it has not reached "Stage 1" by the end of this year.
"The era of rollups being glorified multisigs is coming to an end," he said, adding, "the era of cryptographic trust has arrived."
The question of whether a network qualifies as a Layer 2 is more than just a technical issue within the Ethereum community.
It determines whether the network relies on Ethereum's security and can therefore be trusted to safeguard users' funds, or whether it is a fully independent network whose security may or may not be reliable.
This issue came into sharp focus on June 2 when the decentralized finance protocol Velocore was attacked, resulting in a loss of $2.6 million.
Velocore operates on the Linea network, which claims to be an Ethereum Layer 2. However, the team quickly halted block production to prevent the attacker from withdrawing funds to Ethereum.
Critics argue that such a halt in block production should not happen if a network’s security truly depends on Ethereum—after all, authorities cannot pause Ethereum itself.
As a result of this incident, many critics have claimed that the Ethereum ecosystem is decentralizing too slowly.
A month before the Velocore attack, Buterin had already commented on the topic. He said all Ethereum Layer 2s must reach "Stage 1" by the end of 2024, and those that fail to do so should no longer be referred to as "Layer 2s" by the community.
But what exactly is Stage 1?
Stages of Decentralization
The term "Stage 1 Layer 2" originates from a post Buterin made on November 2, 2022, on the Ethereum Magicians forum.
In the post, Buterin argued that Ethereum Layer 2s are still in early development and cannot be expected to achieve full decentralization immediately.
Instead, developers should be given a grace period to fully develop their network components. Initially, these networks will be highly centralized. Over time, however, they should become fully permissionless and guarantee censorship-resistant transactions.
Stage 0 networks call themselves Layer 2s or "rollups," and publish a compressed version of all transactions to Ethereum.
In addition, the team provides a "rollup full node" that can independently verify the Layer 2 state as long as it has complete transaction data from both layers. As long as the team does not actively attempt to block users by publishing false state roots on Ethereum, users can exit the network without assistance from the team.
In Stage 1 rollups, the network smart contract on Ethereum includes a "fraud proof or validity proof scheme" that prevents developers from publishing invalid state roots.
If developers try to fraudulently withdraw funds that don't belong to them or block legitimate user withdrawals, these transactions would normally fail.
However, developers can override fraud proofs through votes from at least six out of eight members of a security council. This override exists in case developers discover bugs in the fraud proof system.
Additionally, at least three of the eight security council members must come from outside the development team, meaning the development team theoretically cannot unilaterally override these proofs.
Network upgrades must also be delayed for at least seven days before implementation unless approved by the security council.
In the two years since Buterin published his post, most networks claiming to be Layer 2s have remained at Stage 0 or lower, leading to criticism that the entire Ethereum ecosystem has failed to deliver on its promises.
Yet six networks have defied the trend and successfully advanced to at least Stage 1.
Networks That Have Reached Stage 1
List of L2s at Stage 1, source: L2Beat
According to research by blockchain analytics platform L2Beat, below is the complete list of networks that claim to be Layer 2s (L2s) and have reached Stage 1. The list is ordered by total value locked (TVL), with networks holding the most assets listed first.
Arbitrum One
Arbitrum One has entered Stage 1. The network is operated by 14 validators who use a set of fraud proofs to process withdrawals and deposits. If a validator attempts to submit a fraudulent transaction, Ethereum's smart contract will reject it unless these proofs are explicitly overridden.
Fraud proofs can be overridden by the 12-member Arbitrum Security Council. However, according to Arbitrum's documentation, no single organization may hold more than three seats on the security council—including the development team.
The Arbitrum Decentralized Autonomous Organization (ArbitrumDAO) can upgrade the network, but such upgrades face a delay of 12 days and 8 hours, whereas the council can perform upgrades instantly.
If the Arbitrum sequencer stops operating, users can directly withdraw from the Ethereum network, though withdrawals will be delayed by one day after initiation. According to L2Beat, if users disagree with an upgrade initiated by ArbitrumDAO, they have a two-day "exit window." If they exit during this period, ArbitrumDAO cannot stop them even if it becomes corrupted or compromised by attackers.
If users disagree with an upgrade executed by the security council, there is no exit window because council-led upgrades are nearly instantaneous.
Optimism
On June 10, Optimism entered Stage 1 with the implementation of its "Cannon" fault-proof system. On August 17, after a bug was discovered in the system, it reverted back to Stage 0. However, it re-enabled the fault-proof functionality on September 11 and is now back in Stage 1.
If Optimism validators attempt to process fraudulent transactions, the fault-proof system within Optimism’s Ethereum smart contract will reject them. Council votes can override these fault-proof mechanisms, but no single organization holds enough seats to do so without cooperation from others.
According to L2Beat, OptimismDAO cannot implement network upgrades without council approval. Once approved, upgrades are implemented without delay.
dYdX v3
dYdX v3 is a Stage 1 Ethereum L2, entirely separate from the Cosmos-based dYdX v4. It uses zero-knowledge validity proofs to ensure that all valid withdrawals are processed and invalid withdrawals are not.
dYdX validators can delay withdrawals by refusing to include them in transactions for up to 14 days. In such cases, users can initiate a "forced withdrawal" on Ethereum after the 14-day period to reclaim their funds.
Under normal circumstances, upgrades are delayed by 9 days; if designated as emergency upgrades by the priority controller, the delay is reduced to 2 days. L2Beat warns that if governance falls under malicious control, it could block withdrawals for 14 days and initiate a contract upgrade to take effect within 9 days.
Nonetheless, L2Beat still considers dYdX to be in Stage 1 because standard upgrades require a 9-day delay, exceeding the minimum 7-day requirement.
ZKsync Lite
ZKsync Lite uses zero-knowledge proofs to validate transactions. Under normal conditions, the team cannot process invalid transactions or prevent confirmation of valid ones.
If the team initiates an upgrade, it takes 21 days to take effect. If ZKsync validators refuse to include a user's withdrawal in a transaction, users can initiate a forced withdrawal on Ethereum and recover their funds within 14 days. According to L2Beat, the 21-day upgrade delay provides users with a 7-day "exit window."
ZKsync Lite lacks smart contract functionality; it is dedicated solely to crypto payments.
Besides these networks, L2Beat also lists DeGate v1 and Fuel v1 as having achieved Stage 1. In fact, these networks are considered "Stage 2"—fully decentralized—with a combined TVL of approximately $51 million.
Users who agree with Buterin's criteria should continue referring to the above networks as "Layer 2s" after January 1, provided they do not dispute certain analyses by L2Beat.
Four Major Layer 2s Not Yet Qualified
The top four networks currently not designated as Stage 1 by L2Beat either fail to meet one of the required standards or are still under evaluation.
All of these networks are already at Stage 0, so they still have a chance to reach Stage 1 by year-end.
Base
Coinbase's Base network does not run fraud proofs. It is part of the Optimism Superchain, where Optimism has already implemented fraud proofs. Therefore, implementing fraud proofs on Base would be straightforward, and it might enter Stage 1 before year-end. However, it has not done so yet.
Base network Stage 1 issue, source: L2Beat
Blast
L2Beat considers Blast a "Stage 0" network. Users can independently run Blast nodes to verify the validity of deposits and withdrawals. However, the software only issues warnings when a withdrawal is invalid. Users cannot withdraw funds against the wishes of Blast's governing authority.
Blast may release fraud proofs before the end of the year, in which case it could continue to be labeled a "Layer 2" in 2025. But currently, it does not meet all the criteria for a Stage 1 rollup.
ZKsync Era
According to Matter Labs, the network's developer, ZKsync Era uses zero-knowledge proofs to verify deposits and withdrawals. L2Beat is currently evaluating how the system works. ZKsync Era may already be in Stage 1 or could reach it very soon.
On September 12, the team announced a new governance system that designates "guardians" to protect users in the event of a governance attack. In the announcement, the team claimed it is striving toward full decentralization at Stage 2.
Nevertheless, L2Beat currently classifies ZKsync Era as Stage 0 because it has not completed its assessment of the network's Stage 1 components.
Starknet
Starknet has implemented zero-knowledge validity proofs in its smart contracts. However, these proofs can be overridden by whitelisted operators, and users cannot withdraw without permission from Layer 2 validators.
Since Starknet has already implemented validity proofs, applying the other Stage 1 network standards would be relatively simple. Therefore, Starknet could potentially enter Stage 1 before December 31, but it has not met the standards yet.
A few other networks with TVL below $600 million are still classified as Stage 0.
These include Mode, Lisk, Polygon zkEVM, Taiko, Bob, Loopring, Zora, Kroma, Kinto, Paradex, Boba, and ZKSpace.
All of these networks have reached Stage 0, and some have met at least one criterion for Stage 1. However, none have satisfied all requirements to reach Stage 1.
Scroll and Linea Are Below Stage 0
According to L2Beat, two networks with TVL exceeding $700 million claim to be Layer 2s but have not even reached Stage 0.
The first is Scroll, which has over $1.1 billion worth of cryptocurrency locked in its contracts. L2Beat states that Scroll "does not have available node software capable of reconstructing state from L1 data," so users cannot independently verify their transactions.
The second is Linea, with over $780 million locked in contracts. Like Scroll, Linea has not developed public node software allowing users to verify the validity of their transactions.
These networks both conform to and contradict Buterin's vision for what should qualify as a "Layer 2" by 2025.
Ethereum supporters may continue urging teams to make their networks more decentralized. If they don’t, they will increasingly stop calling them Layer 2s. Some networks will keep claiming they’re working toward it, while others will argue it doesn’t matter. Only time will tell which side prevails in the long run.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
@Cointelegraph
