Ethereum is winning L1+L2 is the future

Author: Blockchain cloth Taoist grunt, degate

I think the ending of the encryption industry in the financial field is to form a large -scale, efficient, and neutral asset platform, which is the “Internet financial center” that serves all mankind.I will explain the two articles in the upper and lower articles: 1) Why can only a blockchain with enough freight volume to build such an Internet financial center; 2) why the Internet financial center based on the blockchain isIt is particularly needed in our time, what it looks like in the future.

The Internet Financial Center is built on the blockchain agreement. It is the infrastructure of global finance. It reaches billions of directly and indirect users, and the size of the assets is at least hundreds of trillion US dollars.A variety of assets have been issued on the Internet Finance Center. Assets are on the blockchain, so naturally have the attributes of “necessary”, and the expenditure on the high -efficiency blockchain day and night: Transfer, trade (Trade), Because of mortgage, reserve combination, demolition division, derivative products for basic assets, and so on.

Why is the blockchain valuable?

Why is the blockchain valuable?This is a question that all crypto asset investors have asked.The answers recognized by the encrypted industry are: because of decentralization.I think this answer is correct, but when we talk about “decentralization”, what are we discussing?

In my opinion, “decentralization” is a means, and the purpose is “Trustless”.

So, what is trustworthy?

Talking first is trust.When you give others trust, you will give the other party to attack your “power”, and at the same time, you have positive expectations to the other party, thinking that the other party will not hurt you.People first deposit gold into the vanks in their hands, and the vault gives a deposit voucher. It is promised that as long as you have a voucher to get it, the vault will definitely return the gold to you.You gave the vault damage. The vault can now be you, and you have the ability not to pay back you gold, but you think it should be fine. The vault should return you.Later, everyone knew that the vault found that it was unlikely that all the reserved households came back to the gold at the same time, so they borrowed some gold out to earn interest, and finally developed into a “partial preparation” gold system.The bank’s crisis was performed again and again. In 1971, the commitment of the US dollar and gold exchanges was broken.The Mustang has entered the era of credit currency issued by fiat currency.

What is relief?Without trust is the power you don’t need to hurt your other party.Well, “trust -free service” is that you can still get the service without giving the service party to harm you.The blockchain provides a trusted service.In the blockchain world, as long as you have the private key yourself, no one can snatch or freeze your BTC or ETH; as long as the miner fee of the blockchain pays the blockchain, you will definitely send the coin to any address.Yes, no one can hurt you.These trusted value services are realized by excessive decentralization, and the core provided by the blockchain.Trust -free services are particularly suitable for applications in the financial field. Services include: issuing assets (BTC, ETH) in accordance with the rules agreed in advance; various consumption of assets, such as transfer, transactions, mortgage, and so on.

Malay’s traditional financial centers, such as New York, London, Singapore, are based on a strong basis, because in the traditional model, only a good foundation can provide sufficient trust: your bank has money, other money, others otherIf a person takes or freeze casually, they will be punished by law, so you believe they will not become.This is the rule of “do’t be evil”, which does not mean that their “Can”s former financial center can become” financial ruins “because they are capable of doing evil, just like today, just like todayThe transformation of Hong Kong is experiencing.

Trust is naturally fragile.You can usually not have any problems for a long time, but once something goes wrong, the party you trust may suffer huge losses, just like those who are “cut” in the bank crisis in 2013;People with gold exchanges (equivalent to); just like those who leave Hong Kong now cannot get their own nationality, and Hong Kong law regulations can be retrieved.

On the contrary, relief is naturally anti -fragile and strong, because there is no power to hurt the other party from the beginning.The blockchain has achieved the “cannot be evil” in the past. What gives it further is that it is “not knowing where Gao Ming is going” than them.Financial center.

The blockchain is 10 times better!

Peter Thiel mentioned in the book “From 0 to 1” that if a new product is more than 10 times better than old products, then this new product will sweep the market at a storm speed, and users will migrate on a large scale.In creating an Internet finance center, I think the blockchain is more than 10 times better than traditional methods: 1) In terms of trust, “relief” is more than 10 times better than “trust”; 2) creating addresses on the blockchain.Bifei to open a bank account to Switzerland is more than 10 times more easily; 3) The high -efficiency global financial platform established on the blockchain will have huge “network effects” and bring huge efficiency.It is more than 10 times better than traditional financial infrastructure.Do you have this feeling? After using the blockchain, you will never go back to use the bank?In response to why such an Internet financial center is built based on blockchain structure, and why it is the call of our time, I will be expanded in the (below) of this series of articles.Next discussion: Why is a blockchain based on Ethereum.

The blockchain that builds an Internet financial center must be: (a) enough decentralization; (b) to provide sufficient goods services.These two points must be satisfied at the same time, lack of one.With my foolish opinion, Ethereum is the only contestant in this appearance.

Must be decentralized enough?Looking back at the above discussion, decentralized attributes provide trust -free services, and trust -free services are the basis of why Internet financial centers.Why is trust, or “relief” is so important?

Imagine that if the Bitcoin blockchain is not decentralized, but runs on a centralized server, then::

• Satoshi Nakamoto will open an account on the Bitcoin network. When opening an account, Nakamoto will review the documents of the last user’s documents and family address certification.

• Nakamoto will ask you, where does your BTC come from?Please provide proof of funds!

• Nakamoto will apply to the governments to apply for a license license.

• Nakamoto will report various suspicious transactions to governments.

• Satoshi Nakamoto will provide tax -related information to the government.

• Nakamoto has to accept the instructions of various governments, freeze BTC, and sometimes transfer the frozen BTC to the designated account.

• Satoshi Nakamoto may receive instructions from the US government -please freeze the BTC of the Russian central bank.So what does Satoshi Nakamoto do?After all, Satoshi Nakamoto also applied for a license in Russia.

• Nakamototo received another instruction: Let’s do the “quantization” of BTC once, please help print 700 billion BTCs first, thank you.

Nakamoto realized that a server could not run the Bitcoin network.So, why is it obviously a decentralized network?Because decentralization is the “army”, it provides a similar “sovereign independence” for the blockchain network, so as to provide the neutral, independent, and expected security services for Internet financial centers.

Indeed, the blockchain network is very similar to the country, and it provides services to the government in some aspects, especially in protecting property rights well, which is more than 10 times.

First of all, let’s talk about why people need the government?What should the government do for people?In the 17th century, John Locke, the pioneer of Enlightenment, explained in the “Government Theory”: “Everyone has the right to natural rights, including life rights”, the right to survival, freedom, and property rights.Instead, it is born.Therefore, people want to transfer part of their own rights to the society, and to form the government to protect these natural rights; if a government deprives people of these rights, it is evil.”

Are there many government in the world?a lot of!And it has been changing over the past few decades, especially in protecting property rights.This is the background of the birth of Bitcoin. It is written on the creation block of Bitcoin: “Times 03/Jan/2009 CHANCELORORORORORORORORORORORORORORAUT for BANKS”, translated into Chinese: “Financial Minister in the bank second in the bank”The edge of the rescue”, this sentence is the title of the Times on January 3, 2009.

The independent space constructed by the blockchain can better protect property rights than the government because centralization provides a trusted one.The blockchain group decentralization node forms a “army” to build a long -term and continuous independent space for centuries. Here, a large -scale “Internet Financial Center” is born in a large scale.This independent space is independent of the government as the name implies, but it does not destroy the government and the order it has established. Instead, it is competitive. It provides more than 10 times good services and products in some aspects to establish better order.

The government does not like competition because no one likes to compete with themselves.The reason why Switzerland can maintain neutrality at the emergency is its unique geographical advantages and its own strong army. “Independence” has never been begging, but relying on its own strength to stand in the forest of the world nation.The same is true of blockchain.The blockchain where the Internet financial center is located must have enough centralization to achieve its own sovereignty and protect the economies of hundreds of trillion US dollars.Government) The cost of launching an attack is too large, so that they are willing to coexist. After all, the Internet Financial Center only provides competitive services, does not threaten the government’s own existence, nor does it undermine the order established by the government, just like now departure nowThe shore financial center is the same.

The blockchain of the second and third places hides under the aura of the first place. There are fewer military consumption in decentralized.It is lower than the first place, because the Internet financial center itself has a network effect, because all applications and all users are willing to harmonize on the same collaborative platform, which is the most efficient for the owner.When I started a business in Shanghai before, I could see four people a day. If I was not in Shanghai, I couldn’t do it.If 1.4 billion people in China can live in the same city without physical conditions, from the perspective of efficiency and collaboration, it is the best for ownership, but there is not enough “scalability” in the physical world. This isIt is also why I think the high throughput of the blockchain (ie: scalability) is essential for the construction of an Internet financial center and is tied with decentralized attributes.The gap between the first place and the second place in the chain may be the gap between Google and the second search engine.

The blockchain is a state -like existence, and its online public opinion is the state’s constitution.Different from the country, all behaviors on the blockchain must be reviewed by the “Constitution” of all the main points of consensus in real time.More than times.Blockchain, as a more efficient order model, builds the next generation of human system in some ways -does not depend on the government’s “decentralized system” to benefit the entire people.

How much centralization is needed?

If the external enemy forces want to attack the blockchain network, the attacker will launch an attack on the public’s “decentralized equity node”.For example, a state government requires frozen BTCs on a address, so the government must make more than 50%of the voting nodes of the Bitcoin network refused all “unreasonable” blocks.Any BTC transaction issued by this address.For another example, a large cross -border remittance company in order to prevent the transactions on Ethereum from the occurrence of potential competition, then it is necessary to provide more than one -third of the mainstream nodes of Ethereum to provide rejection services, so that Ethereum networks can never reach “the final” final “final” final”Finality).

There are several ways to launch these attacks, such as: 1) to send lawyers’ letters to the operator of the voting node (eh, the law can sometimes be formulated);Inject virus; 4) launch missiles to nodes; 5) close the entire Internet; and so on.

1) There are a large number of nodes. Even if a few are knocked down, it does not affect the overall operation of the blockchain network; 2) Nodes are born to find the real person behind them based on the “pseudonym system”, and send a lawyer letter to them and send them a lawyer and send them a letter of lawyers and send them a letter of lawyers and send them a letter of letters and let theman letters and send them a letter of letters and let them be a letter of lawyer and send them a letter of letters and let their lawyers.Not so easy; 3) nodes are distributed in different judicial jurisdictions in the world, and the laws in each region are different; 4) It is dynamic to become a voting node.

It can be seen that if there are enough decentralized nodes and the organization’s mechanism is good enough, it is not easy to defeat this “army”.If the motivation of the attacker is not strong enough and the importance of attack is large enough, then there is no reason to launch an attack.The motivation of attack is related to the scale of the blockchain economy itself, and it is also related to the adverse impact caused by the blockchain to the adverse impact of powerful potential attackers.For previous, the scale of the Internet financial center is large, which is equivalent to the need for more powerful “army” protection; for tonight, the blockchain practitioners will not actively irritate the powerful potential attackers. For example, I think the blockchain on the blockchainAnonymous service is unwise, because the existing national order has caused a huge impact, so it is likely to cause government people to attack.

So, is the degree of decentralization sufficient?Everyone’s judgment is different, and this threshold is dynamic and is related to the statistical degree of the external environment.

We know that the current external environment is not friendly. China has long banned all cryptocurrencies. Many people in the U.S. government do not like the crypto industry.Reluctantly passed the application of the BTC spot ETF.

In my opinion, dozens of nodes are definitely not enough to build an Internet financial center; a few are not necessarily enough; thousands of people are beginning to be reassuring.In addition to the number of nodes, the degree of decentralization is also very related to the nature of the node itself. For example, if the hardware requirements of the node must be a data center -level, even if there are thousandsBecause the privacy of nodes has almost no existence, and “soldiers” cannot fight guerrilla warfare.The Ethereum community believes that it is very important to allow ordinary people’s computers to run voting nodes. It is an important foundation for Ethereum to keep the centralization of the house.

Regarding how much decentralization is enough, another consideration is to prevent decentralization from doing evil and corruption.If the billions of people entrust the inherent property rights to 21 nodes and give it to these 21 nodes to dominate, how can we ensure that they will not be corrupted?How can we ensure that “we are not a person to be the people”?21 nodes will cooperate with some countries to achieve control of “capital outflows”. In fact, it is for you and my sweaty greed.
The greed of interests and power is the “initial setting” of evolution. From the Louis XIV of the Bourbon dynasty as the “Right” country “of the” King of the Sun “, to the maintenance of the revolutionary party leader of the Bourbon dynastyBerst’s personal dictatorship, then Napoleon, who realizes personal authority through the achievements of the Great Revolution, all declare human corruption.”Some of them are Robertspier and Napoleon. Therefore, we have to sacrifice a certain efficiency and take the democratic route of power balance. In the blockchain world, it is decentralized to allow such a” decentralized system “Essence

The amount of throughput is equally important!

To build the blockchain of the Internet financial center, it is enough to be decentralized, and it must be able to provide sufficient throughput services.However, before the second -level technology (Chinese is Layer2, hereinafter referred to as L2), the encryption industry once concluded that the “impossible triangle” was concluded.This assertion believes that it is impossible to reach the simultaneous scalability, decentralization, and security, and the three can only get the second.Obviously, safety cannot be concession, and scalability (ie: high throughput) and decentralization must be selected.Therefore, many blockchain has delayed compensation in the center to achieve performance. For example, the entire blockchain network now only relies on the focus of 21 and the disadvantage of the disadvantage. It has been discussed earlier. I think such a compromise has allowed themThe competition for the construction of the Internet Financial Center came out.

Many years ago, I thought that this “impossible triangle” was wrong, because it mistakenly assumed that each node must be verified one by one in the block, but in fact L2 technology broke the technology breakThis assumption.There are currently several types of L2 technology. In conceptual, fish and dragons are mixed. Some of them have deliberately steal concepts, interfere with audiovisual, and even derive other independent blockchain into L2 of Ethereum.In my opinion, L2’s judgment basis is very simple: the L2 system can eventually reach L1 (Layer1, the bottom blockchain) level in the design.L2 is the extension of L1. Whether or not to form an overall blockchain internal ecology with L1, if it is extended, it loses the most important “trust” attribute.It cannot provide independent space for the construction of an Internet financial center, nor can it be called L2, otherwise, logically, the centralized exchange can also claim to be L2, because you recharge (after changing the concept, renamed the bridge) to centralization to centralizationAfter the exchange, transfers and transactions can also be carried out.

Aside from those “αL2” systems that are claimed to be L2. In real L2 technology, my most important branch is RollUP technology.The working principle of Rollup technology is that a global transaction resource is compressed in the bookkeeping Rollup and upload it to the L1 blockchain.There are 2 Rollup technologies: Optimistic Rollup and ZK Rollup, they all break the so -called “impossible triangle” in their own ways.Optimistic Rollup has ended the verification work that needs Ethereum nodes. Anyone can launch a challenge to the status of the Optimistic Rollup transactions on Ethereum in a specific cycle (usually 7 days).The design mechanism has become an incentive for the success of challenges to get rewards, so as to correctly encourage positive public supervision and challenge any errors.In ZK Rollup, the cryptography of zero -knowledge demonstration naturally naturally after mathematics ZK Rollup, the state must be yes, and zero -knowledge proof technology can also make Ethereum nodes only need to spend very little computing resources.A transaction that is compressed by mainstream is quickly verified.I think the ZK Rollup technology is magical. In addition to extremely high compression efficiency, it has done clean things on extending L1’s relief attributes, without increasing the additional difficult safety assumptions.

“L1+L2” is the future!

In the long run, I think the future of Ethereum will be the combination of “L1 blockchain+and L1 -free L2 system” (hereinafter referred to as “L1+L2”), especially when ZK RollUp solves universal intelligence solved universal intelligenceAfter the contract platform technology.Such a combination provides not only the current degree of decentralization of Ethereum, but also provides high throughput services. It is the best choice to carry hundreds of trillions of dollars in Internet financial centers.

The prospect is bright, the road is twists and turns, and there is huge difficulty in the end of the deadly “L1+L2”. The most significant challenge is: 1) technical challenges; 2)give up.

L2Beat (l2Beat.com) 89 is a very useful website. Behind it is a young team with a clear belief in decentralized spirit and the concept of “relief”. The website comprehensively shows each L2 project (including “true L2In the case of “pseudo L2”), if you recognize and want to invest in the future like “L1+L2”, it is recommended to look at L2Beat often. It is very helpful.

We use the information displayed on L2Beat to sort out the huge challenges at this moment.The following screenshots show all 38 L2 projects currently running on L2Beat, and sorted from high to low with the standard evaluation of “Stage”.

First introduce the “Stage” evaluation system of L2Beat.L2Beat is based on 5 risk factors to judge the degree of completion of “trust”. L2Beat is called “maturity”.These 5 risk factors are (1) status verification (inspection of state invalid), (2) sorter failure (sorter failure), (3) proposter failure (chain person failure), (4) exit window (4) exit window (exit the window (The window period that the user follows), (5) data availability (the following figure is an example, only the 5 risk factors are evaluated as green, and the Stage 2 rating can be obtained. At presentDegate shown like this.

In the L2Beat’s “Stage” evaluation system, the artwork obtains the level of Stage 2, and the following requirements must be achieved: providing users with a trust window period for at least 30 days. As long as the user responds in the window, he can feel the Ethereum L1 L1″Trust -free” security guarantee.I think the criteria for judging are reasonable and in line with the current stage of L2’s overall ecological development. My appreciation of the L2Beat team is conducive to their pursuit of the concept of “relief”, and it is also conducive to their adherence to concepts.Not rigid. For example, they did not set the judgment standards of Stage2 as the user’s duration, because this is too inconsistent with the reality, and it may have adversely impact the development of the overall ecology of L2. After all, the L2 ecology is currently a period of rapid development.For example, Ethereum will implement EIP4844 in 2024. It will introduce a more cheap data type, called Blob Data. After implementing EIP4844, I expect the cost of use (ie GAS cost) for Rollup) can be reduced by at least 80%, but each of each of themIn order to be able to use the cheaper data service brought by EIP4844, the necessary conditions are not available to use the cheaper data service brought by EIP4844.Deployment, then the old RollUP system is abandoned. In the end, the construction of the old Rollup system is abandoned, and the price of the user’s assets to the new Rollup system is too much.Directed, and I think this is unfavorable for the overall L2 ecological development.Therefore, the current evaluation system of L2Beat is reasonable, which not only adheres to the idea, but also in line with the actual rigidity.

Now, let’s discuss the two challenges in the first challenge: why is it so difficult to achieve the L2 of “L1 -free equivalent” in technology?The core reason is that the L2 system is very complicated. The more complicated the system, the more complicated the system. The entrance to the safe operation is achieved, and the time required for safe operation is quite long.Moreover, whether it is Optimistic Rollup or ZK Rollup, it is a new technology, especially the zero knowledge used by ZK Rollup is very advanced in the password industry. In fact, the application of ZK Rollup is quickly promoting zero knowledge demonstration.Development in academia.In the L2 system displayed on the L2Beat, according to my initial implementation of ZK Rollup’s system Loopring, it has been experienced for at least 5 years since the project. It has achieved the DEGATE of STAGE 2 in 3 years.”Safety vulnerability bonus activities” continued.

Although there are obvious difficulties in technical, as I said earlier, I believe that the prospect is bright, because the mature “L1+L2” blockchain system will achieve hundreds of trillions of dollars, the Internet financial center that serves human beings.There are now 5 projects on L2Beat to complete Stage 1 or above. They are DEGATE, Fuel, Arbitrum, DYDX, ZKSYNC, and praise them.

The second big challenge is to abandon the concept of “relief”, that is, it cannot reach the L1 level “relief” in design. I call it “αL2”.I guess the biggest motivation here is to reduce GAS costs and provide cheaper services.Although cost is important, it cannot give up the most core value “relief” as the price. This kind of concession I think has passed the bottom line. The price is that these L2 systems cannot be part of the “L1+L2” exemption system, only “true L2″With the ability to carry hundreds of trillions of Internet financial centers with L1.In addition, “True L2” can also reduce costs through other ways. The biggest cost of “Zhen L2” is the data cost of the chain to L1. This part will be significantly reduced after the implementation of EIP4844 this year. I expect to reduce at least at least at least80%.

Recently, the blockchain field has set off discussions on the DA (data usability) layer. Some people recommend that DA services move out of Ethereum and use other cheaper data services.If the DA service is moved out of Ethereum, the Rollup system can still maintain the L1 -level “trust” attribute in design, and I raised Baidu in favor.In fact, there are indeed such solutions, and there are excellent teams actively exploring and practicing.However, in fact, recent discussions need to abandon the “relief” of L1α level, so that L2 is reserved to “L2” for the cost of the front.

I believe that all L2 people who do financial applications have a large -scale goal and eventually become an important member of the “L1+L2” system.It is not a gold necklace that will rust on the neck.I think the abandonment of “relief” will seriously hinder “αl2” as a large scale. Of the 38 L2 projects currently running on L2Beat, the size of “true L2” is more than 10 times the “αl2”.If you care, everyone wants to eventually make a “human mine”.

Summarize

To sum up, the dissertation discusses:

• Why is the blockchain valuable?Because of decentralization.

• Decentralization is the “army”, the purpose is to achieve “trust”.

• Only a strong “army” can provide protection for Internet financial centers.

• How many decentralizations are explained.

• Building the blockchain of the Internet financial center must meet (A) sufficient centralization; (b) provides sufficient goods services.At present, only Ethereum is the player at the same time.

• It explains how L2 breaks the “blockchain impossible triangle”.

• The judgment scores of “True L2” and “αL2” are given.Money is clever, and the market has chosen “True L2”.

In the next article, I will explain why the Internet financial center based on blockchain is particularly needed in our time. It is very marketable. What kind of child it will grow in the future.