Ethereum Foundation Post: Restructuring the Division of Labor Between L1 and L2 to Build Ethereum’s Ultimate Ecosystem
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Ethereum Foundation Post: Restructuring the Division of Labor Between L1 and L2 to Build Ethereum’s Ultimate Ecosystem
Five years of refinement: The Ethereum Foundation updates the Layer 1 and Layer 2 ecosystem positioning and top-level guidance.
Navigating Web3 tides with focused insightsBy Josh Rudolf, Julian Ma, and Josh Stark
Translated by Chopper, Foresight News
The Ethereum Foundation’s Platform team has one ultimate goal: to scale Ethereum as a unified coordination system so that all users can rely on it with confidence. This article shares our perspective on the relationship between Layer 1 (L1) and Layer 2 (L2), clarifies the role of each layer, and explains how we—as an ecosystem—can leverage the strengths of both L1 and L2 to build the most compelling platform for all users. Some aspects of this vision are already clear; others will be validated through ongoing experimentation and iteration with the community and users.
TL;DR
Goal: Every individual and institutional user should have a clear path to leverage, extend, and benefit from Ethereum’s core properties. The best way to achieve this is to fully utilize the unique capabilities of each layer—reinforcing Ethereum’s core properties and delivering meaningful value to end users through them.
As the Ethereum ecosystem evolves, so do the roles of each layer:
- Past: L2’s primary mission was to scale Ethereum; secondary goals included differentiation and customization. Scalability was paramount.
- Present: L2’s primary mission is to scale *while* delivering differentiated features, services, customization, go-to-market strategies, and control. Today, the biggest drivers are differentiation, control, and innovation.
- L1 serves as the truly permissionless, globally resilient settlement, shared-state, liquidity, and DeFi hub. A robust, scalable L1—one that preserves CROPS (Censorship Resistance, Openness, Privacy, Security)—provides a stronger foundation for L2s.
- L2s deliver valuable new functionality, customization, and control to grow their own onchain economies, while extending Ethereum’s core properties to more users. Strong L2 networks reinforce the broader Ethereum ecosystem—and its gravitational center.
L2s span the full spectrum, establishing differentiated relationships with L1 based on their specific needs:
- L2s seeking the tightest possible integration with L1 should strive for synchronous composability, full interoperability, shared liquidity, and native Rollup mechanisms.
- L2s with diverse business models or technical expertise will continue playing vital roles in the ecosystem, each delivering specialized capabilities beyond L1’s reach.
The Ethereum Foundation (EF) will continue developing foundational technologies to help L2s seamlessly extend L1-native properties and securely bridge cross-layer and cross-chain liquidity and assets. At the same time, EF requires L2s to operate transparently—clearly disclosing their security properties and verification standards. In short, both sides play essential roles—and must walk the talk.
Introduction
Over the past five years, a vast L2 ecosystem has grown around Ethereum’s L1. These L2s inherit different native properties from Ethereum: some fully replicate its decentralized architecture (e.g., Stage 2 Rollups); others inherit only partial security properties (e.g., Validium, Prividium); and some merely comply with generic EVM standards (and are not L2s at all). Many chains remain under development, often launching as independent chains before progressively deepening their integration into Ethereum’s L1 ecosystem.
It is now time for the Ethereum Foundation (EF) and the broader Ethereum ecosystem to update our understanding of the relationship between L1 and L2 networks. The last major update occurred roughly five years ago, when the rollup-centric roadmap was first proposed as Ethereum’s scaling path.
Since then, much has changed. Technologies enabling L2s to share Ethereum’s security and liquidity—and interoperate with it—have matured significantly. L2 differentiation and user value have become increasingly pronounced. L2s themselves have grown and matured, cultivating independent communities and ecosystems. Meanwhile, Ethereum’s L1 scaling roadmap has also evolved and become clearer. The Ethereum ecosystem must acknowledge these shifts—and learn from both past successes and failures.
Over the past several months, the future direction of the relationship between Ethereum’s L1 and L2 has come into sharper focus:
- A thriving Ethereum ecosystem must rest on a strong L1 foundation.
- Ethereum’s L1 will scale by orders of magnitude while preserving its highest levels of security and decentralization—continuing to serve as the core of the onchain economy and the heart of DeFi.
- A future ecosystem will consist of independent yet interoperable L2 chains offering higher degrees of customization, control, and functionality than L1 alone can provide. These L2s choose to root themselves in the Ethereum ecosystem because it represents the best choice for their users, communities, or businesses.
- L2s compete *and* cooperate to deliver a wide range of specialized blockspace, services, and assets.
This article elaborates further on this symbiotic L1–L2 vision and outlines a path toward mutually reinforcing relationships between Ethereum’s L1 and any chain seeking to root itself within—and become part of—the ecosystem.
What roles do L1 and L2 play—and how do they work together?
Ethereum L1 is the world’s leading programmable blockchain—unmatched today in user adoption, developer ecosystem, decentralization, resilience, and foundational robustness. It is the core of the DeFi ecosystem and hosts the deepest liquidity in the network.
Ethereum L1 now has a clear scaling path that preserves decentralization and security. Thanks to the collective efforts of many teams across the ecosystem, zero-knowledge (ZK) proof technology has advanced far faster than anticipated. In the coming years, we will scale Ethereum L1’s capacity by multiple orders of magnitude—without compromising its core values.
At the same time, no single public blockchain can accommodate the full diversity of global onchain economic demand. Even if Ethereum remains dominant and scales 1,000x, many distinct chains will still exist—because they offer specialized and customized services that L1 simply cannot match:
- Specialization for specific applications or use cases
- Non-EVM functionality
- Additional privacy guarantees
- Custom pricing mechanisms or transaction inclusion logic
- Ultra-low latency or other ordering characteristics
- Features requiring extreme scalability beyond L1’s capacity
- Specialized economies, market-entry strategies, and growth models
- Modular design to meet compliance or other business requirements
- Other improvements or innovations that can iterate and ship faster than L1
- …
This creates an opportunity for a mutually beneficial L1–L2 relationship—where each layer focuses on complementary roles.
Why would other independent public chains choose to become Ethereum L2s?
- Low cost. Compared to building an independent base-layer public chain, becoming an L2 replicates Ethereum’s top-tier security and decentralization at extremely low overhead. Building a globally distributed, decentralized validator set is expensive, time-consuming, and technically demanding. L2s can outsource this responsibility to Ethereum L1—paying only as needed, without large fixed infrastructure costs.
- Users and developers. Interoperating with the largest L1 and L2 cluster grants access to more users and developers. With maturing ZK proofs, real-time proving, faster L1 finality and L2 settlement, and proxy infrastructure, interoperability and cross-chain UX are accelerating rapidly.
- Interoperability. Well-designed L2s can securely access L1 assets and DeFi liquidity, L1 user accounts, and any L1 service—such as oracles or ENS.
- Marketing: Being part of the Ethereum ecosystem confers brand and reputational advantages. Ethereum boasts the strongest reputation, security track record, and regulatory recognition among all L1s.
What does Ethereum L1 gain? Based on our experience and discussions with ecosystem stakeholders, we believe positioning Ethereum L1 at the center of a growing L2 network reinforces Ethereum’s and ETH’s unique role in the onchain economy:
- Creating demand for ETH—and providing trust-minimized, secure bridging between ETH and other assets. ETH serves simultaneously as store of value, currency, and more within the Ethereum network.
- Extending Ethereum’s network effects (e.g., EVM, developer education, developer tooling, user onboarding, and interoperability across L2s)
- Solidifying Ethereum’s position as the core of the multi-chain ecosystem—and the primary settlement and liquidity layer for the onchain economy
- Providing Ethereum with broader business development, growth, and marketing support
- L2s advance Ethereum’s core vision. As distributed engines of Ethereum’s core properties—security, resilience, and stability—they maximize the number of users who sustainably capture value from Ethereum.
The Ethereum ecosystem must not take these advantages for granted. Some remain contested within the community—or are long-term hypotheses requiring empirical validation through experimentation, measurement, and analysis. Ultimately, the L1–L2 relationship must be mutually beneficial to succeed. Over the past five years, this relationship has achieved much—and laid critical groundwork for the future.
What does this mean for the future of L2s?
What does this new vision mean for L2 users, their teams, and their communities?
Here are our recommendations:
- L2s should focus strategically on complementing L1 and achieving platform differentiation. Many L2s have already successfully pursued this vision—through innovative features, application-specific chains, novel distribution methods, or distinctive go-to-market strategies. This has helped them cultivate unique communities and extend Ethereum’s properties to millions of new users.
- L2s should retain the freedom to differentiate in diverse ways, according to their own vision. We’ve already seen differentiation emerge across scalability, trustlessness, privacy, enterprise compliance, industry focus, community, and a broad spectrum of technical innovations.
- L2s may choose to extend all—or only some—of Ethereum’s properties. But they must ensure users can easily understand which security properties they do (and don’t) provide. Trust-minimized L2s should—at minimum—achieve Stage 1 and pass the “exit test”: even in the presence of malicious operators or a failed security council, users must be able to exit safely to L1. L2s aiming for maximum alignment with L1—and full inheritance of its properties—should pursue: 1) Stage 2; 2) synchronous composability; and 3) native Rollup status.
- L2s should continue building broader interoperability and shared liquidity mechanisms—to strengthen the entire Ethereum ecosystem.
- L2s should continue operating transparently—clearly communicating their security properties and their relationship to L1’s security layer.
What is the Ethereum Foundation doing to build this world?
To realize this L1<>L2 vision, the Ethereum Foundation is actively advancing the following initiatives:
- We are committed to scaling both L1 and blobs—without sacrificing decentralization. Blob utilization currently sits at ~30%, leaving enormous headroom; we can confidently scale blobs further as needed.
- We provide targeted support to L2s with existing or emerging expertise—or ambitions—in privacy, security, and trustlessness.
- Josh Rudolf leads the Platform team, whose mission is to improve Ethereum’s overall platform performance—and serve as the interface between L2s and the core protocol roadmap.
- We are improving L1 liquidity to make it easier for L2s to access liquidity (faster finality, withdrawals, and deposits).
- We collaborate closely with L2 teams to understand their needs—and reflect those needs in protocol priorities—while clarifying the L1–L2 relationship. To ensure this relationship functions effectively, we need to identify what works—and what doesn’t—and co-develop solutions. Our consistent goal is to clarify and reinforce the value proposition of being part of the Ethereum ecosystem.
- We are investing in R&D to realize “native Rollup” technology: L2s that L1 can fully and trustlessly verify—enabling synchronous composability and secure interoperability.
- We work closely with L2Beat and other organizations to monitor and verify L2 security properties. We must rigorously and honestly assess L2 properties—and their degree of alignment with L1 security—so users and developers can make informed decisions.
- We address the main drawback of multi-chain ecosystems: fragmentation. We’re partnering across the ecosystem—including chains, wallets, and infrastructure providers—to build better interoperability solutions that resolve fragmented user experiences and fragmented developer platforms. Now that the L1–L2 relationship is clearer, we can begin tackling the fragmentation of Ethereum’s narrative itself.
Together, we will build a global, permissionless onchain economy—and deliver the best platform for all users.
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