What would layer 3 of Ethereum look like? Vitalik Buterin has some ideas.

Ethereum creator Vitalik Buterin thinks that stacking rollups won’t scale Ethereum efficiently, but he still has some ideas about the future of Layer 3 scaling.

Vitalik Buterin questions the stacking of rollups

Layer 2 platforms are still in their infancy, but Vitalik Buterin is already thinking about scaling up to Layer 3.

In a blog post titled “What kind of Layer 3 makes sense?“Buterin reflected on how Layer 3 scaling solutions could help Ethereum process transactions more efficiently.

Ethereum’s mainnet currently has a throughput of about 15 transactions per second. During busy periods, users face network congestion and extremely high gas prices because their transactions cannot fit in the available block space. In November 2021, users paid as much as $62.11 for a token exchange – a transaction that currently costs about $1.36 to complete.

Layer 2 scaling solutions called “rollups“rollups” were designed to alleviate this problem. Rollups externalize the computational data of a transaction to another chain, and then publish an easily verifiable cryptographic proof of transaction on the Ethereum core network. This allows transactions to be aggregated and saves a significant amount of block space.

Buterin has previously stated that rollups could help Ethereum reach a throughput of 100,000 transactions per second. Arbitrum, Optimism, Starknet and zkSync are all examples of rollups.

However, rollups have limitations. Buterin stated in his last article that rollups in their current form cannot simply be stacked on top of each other due to data compression issues.

Buterin argued that “data can be compressed once, but it cannot be compressed again“. If a second compressor offers an advantage, the logic of a second compressor can usually be built into the first compressor, he said.

Layer 3 offers alternatives

Instead of stacking rollups, Buterin suggested assigning different objectives to Layer 2 and its potential Layer 3s.

In this case, Layer 2 would be used for scaling. Meanwhile, Layer 3 would support other functions such as privacy-oriented chains, non-EMV platforms, custom scaling solutions for specific applications, or validiums (which are another type of rollup).

Buterin also suggested that Layer 3 systems could be created by modifying the way rollups currently operate. Some rollups, called ZK-Rollups, have to check their own proof of state (a kind of cryptographic key).

Instead, Buterin argues for a new approach involving a “batch auditor contract” which specializes in verifying such evidence. This would significantly reduce the gas price for these scaling solutions without the need to build a full EVM system as an intermediate layer. In effect, the ZK-Rollups would become Layer 3; there would be no need to build Layer 3 above them.

Buterin also stated that no matter how the Layer 3 solutions are built, they will allow sub-ecosystems to evolve within Layer 2.

Indeed, cross-domain transactions could take place without necessarily having to go through Ethereum’s mainnet – meaning that transactions would become much cheaper. This would certainly be good news for Ethereum users.