Ethereum Co-Founder Vitalik Buterin Shares Vision for Layer 3 Protocols

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While Ethereum-based layer 2 solutions are focused on hyperscaling the network, Ethereum co-founder Vitalik Buterin believes that layer 3s will serve a completely different purpose – providing “customized functionality”.

Buterin shared his thoughts in a Sept. 17 post, giving three “visions” of what layer 3 will be used for in the future.

The Ethereum co-founder said that a third layer on the blockchain only makes sense if it offers a function other than layer 2s, which have mainly been used to improve scaling via Zero-Knowledge (ZK) Rollup technology.

“A three-tier scaling architecture that consists of stacking the same scaling scheme on top of itself generally doesn’t work well. Rollups on top of rollups, where the two layers of rollups use the same technology, certainly not.”

However, “a three-layer architecture where the second layer and the third layer have different purposes can work,” Buterin says.

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One of the use cases of layer 3 would be what Buterin describes as “custom functionality” – referring to privacy-based applications that would use ZK proofs to send privacy-protecting transactions to layer 2.

Another use case is “custom scaling” for specialized applications that do not want to use the Ethereum Virtual Machine (EVM) to perform calculations.

Buterin also said layer 3 can be used for “weakly trusted” scaling via Validiums, a ZK-proof technology. Buterin said this could benefit “enterprise blockchain” applications by “using a centralized server that runs a validium prover and performs regular hashes to chain.”

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But Buterin added that it is still unclear whether layer 3 structures will be more efficient than the current layer 2 model when it comes to building custom applications on Ethereum.

Layer-2 versus Layer-3 network architecture. Source: StarkWare.

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“A possible argument for the three-layer model over the two-layer model is: a three-layer model allows an entire sub-ecosystem to exist within a single rollup, allowing cross-domain operations within that ecosystem to take place very cheaply, without having to go through the expensive layer 1.” said Buterin.

But Buterin said that because cross-chain transactions can be done easily and cheaply between two tier 2s committed to the same chain, building tier 3s doesn’t necessarily improve network efficiency.

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Buterin’s comments about possible layer 3 use cases come as StarkWare’s newly produced recursive validity proofs may seem to have put an end to concerns about Ethereum’s scalability.

Declan TBEN, the product manager at Ethereum software company ConsenSys, recently told TBEN that “with recursive rollups and proofs, we can theoretically scale infinitely.”

These recursive proofs have been well tested in production, with StarkWare co-founder Eli-Ben Sasson recently telling TBEN that his recursive proofs have rolled up as many as 600,000 NFT coins in a single trade on Immutable X, and that 60 million trades soon pointed to the card “with more engineering and tweaking.”