tl;dr: Designed to help scale Ethereum, will they just end up fragmenting it?

To use the Ethereum network, you need to pay “gas” in the form of gwei. Gwei are to Ether as cents are to dollars, except there are 1 billion Gwei in Ether.

Anyway, as the Ethereum network, which is limited to 15 Transactions per Seconds (TPS), has grown, the demand for space in a block (meaning your transaction has been accepted on the network) has increased.

To secure your place, like an auction for airline seats or any evaporating asset, you can pay more gwei, which is exactly what people have been doing.

The consequence, as the value of ETH, DeFi, and NFTs has exploded is that gas fees have as well.

Rise of the Layer 2s

To combat this, so-called “Layer 2” solutions have arisen to take some of the load off of the core Ethereum chain. These are a bit like covalent bonds that have their own world, but occasionally interact with the “main chain.”

The advantages of the Ethereum Layer 2 is that they are cheaper than Layer 1 in terms of gas, as you can see at the site, L2Fees.

Many dapps and projects have migrated to Layer 2 and/or built solely on Layer 2 in order to avoid the gas fees of Layer 1. This is a rational response.

Another rational response is to start building on different chains, like

• Solana (which has gotten a lot of attention)
• Arweave (where a vast majority of NFT data is actually stored)
• Cosmos (where I’ve heard of some gamers going)
• Polkadot/Kusama (with all kinds of activity), and
• Filecoin (which is getting a fair amount of start-up traction in some corners)

All in all, this is great for the development of the decentralized ecosystem

Breaking Composability

Where I get stuck (and perhaps it is because I don’t know enough) is what happens to so-called “atomic composability,” the ‘money legos” that smart contracts represent?

If one dApp is on Optimism, another is on Matic, and a third is on Arbitum (all Eth Layer 2s), how easy/difficult is is to leverage those pieces to build new decentralized applications?

I’m sure the answer will be “there will be bridges built between them” and I’m sure that’s true. There will be bridges built between them.

However, that just means there’s another layer of infrastructure (the bridge) that will need attention and upkeep.

I’m not a CompSci expert, but that feels like a risk to me.

Granted I’m biased on this because the Flow team, when I worked with them (and they did invent the NFT category/CryptoKitties after all), were so convinced of Ethereum’s inability to solve the scalability trilemma long-term that they built their own chain.

And I’m double biased because I’m an advisor to Radix, which takes a “one shardspace to rule them all” approach.

Layer 2 Today and Tomorrow

The existence of Layer 2s (and alternative Layer 1s) is a good thing-for the moment- as it increases usability by lowering costs. This allows more people to experiment with Web3 experiences and dapps.

But, I keep having this nagging feeling that there’s an Achilles heel to Ethereum. We just may not see it for a while.