Future of Ethereum Layer 2 Blockchains: Only the Modular Will Survive, Asserts Manta Pacific Co-Founder
Summary:
Manta Pacific's co-founder, Kenny Li, predicts that only a few of the current 44 active Ethereum layer 2 blockchains will survive in five years, suggesting that the future is primarily reserved for modular blockchains such as Manta, Celestia, and Cosmos. Critics, however, argue that this prediction is a marketing stunt and the development approach or scalability does not determine a network's success. Austin Federa, Solana Foundation’s head of strategy, also asserts that modular and monolithic systems are mere software architecture choices, neither of which significantly contributes to a network's outcomes.
Within the current ecosystem of Ethereum's 44 active layer 2 blockchains, predictions suggest that only a handful will remain functional over the next five years, particularly modular blockchains, warns Manta Pacific co-founder, Kenny Li. At present, these networks host a total combined value of $36.92 billion, with Arbitrum leading the pack with a total value locked (TVL) of $14.5 billion.
However, Manta Pacific's COO, Li, asserts that the future is predominantly reserved for modular blockchains, such as Manta, Celestia, and Cosmos. The value and validity of these statements, however, have been questioned, with adversaries labeling them as merely a marketing tactic, and arguing that the structure rather than development strategy or scalability determines a network's success.
Drawing parallels between the influx of new layer 2s within the Ethereum network and previous Bitcoin and Ethereum network "forks," Li predicts a similar fate for the new layers, considering the failure rates observed with the forks. He elaborates on how minor alterations to existing technology were proposed to create improved versions of Bitcoin, although none of these Bitcoin forks had metrics or communities that could compete with Bitcoin itself.
As per Li, a similar incident unfolded with Ethereum in 2016 when new networks like EOS and NEO claimed to be a superior version of Ethereum by slightly modifying the existing Ethereum ecosystem. Li believes this attempt to make themselves "Ethereum killers" failed due to their monolithic construction, implying that they were resistant to new technology's rapid integration and adoption, which would have enhanced their performance over time.
Modular blockchains differentiate themselves by out-sourcing their primary tasks to external blockchains, which allegedly provides more design flexibility. Alternatively, monolithic blockchains manage all tasks within a single network layer. Austin Federa, Solana Foundation’s head of strategy, considers the comparison between monolithic and modular systems to be a marketing gimmick introduced by Celestia.
According to Li, Manta, launched on January 18th, could be considered Ethereum's first and most expansive modular layer-2 network as it uses Optimism's OP stack and relies on Celestia for data availability. As of now, Manta ranks fourth in terms of TVL among layer 2 networks, recently surpassed by Blast, which launched on March 1st.
Despite the contrasting architectures, Feder argues that there’s no need to make a distinction between the two approaches. He believes neither the so-called modular system nor the monolithic system significantly contributes to the success or outcomes of a given network. Rather, he insists, these are merely different choices in software architecture that in reality, are not that varied.
Published At
3/7/2024 6:34:08 AM
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