Cancun upgrade is approaching, is Layer 2’s Show Time coming?

Recently, layer2 finally broke the silence and was proud. Tokens such as $OP, $ARB, and $METIS shined brightly, just like the Show Time moment on the eve of the Cancun upgrade. . Why did the "competitive involution" of layer 2 really kick off after Cancun's upgrade? How will the market structure of layer 2 evolve after Cancun's upgrade? Next, let me talk about my views:

1) The implementation of the Ethereum Cancun upgrade EIP4844 Proto-Danksharding proposal will bring "quality" to the layer2 Rollup project boost. By introducing the new data structure of Blob space, it iterates the limitations of relying on calldata to store data in the past, and at the same time improves the data availability capability of the Ethereum main network. Compared with the full node storage structure of calldata, Blob is designed as temporary storage for some nodes. This can greatly increase the upper limit of data submitted by layer2 to the main network at a time and expand its TPS. At the same time, since it is only temporary storage, the data storage efficiency will be improved. Data storage costs have also plummeted. The improvement of DA capability is due to the temporary storage of 1 month, which is more than enough to cope with the 7-day fraud proof time window of OP-Rollup. As a result, the transaction volume layer2 submits to the main network in a single transaction will increase significantly, and the cost shared to a single user will also decrease significantly. Before the Cancun upgrade, layer2 boasted about how big its TPS was, but most of it was in a test environment. On the contrary, users intuitively felt the poor experience of gas consumption and wear and tear, which made everyone feel that layer2 was not worthy of its name. After the Cancun upgrade, layer2 players no longer have the performance bottleneck of the mainnet and can no longer use the mainnet limitation as an excuse. Hard indicators such as TPS and Gas will directly become a test and are also a key to layer2 reshaping the competitive landscape. This is why I have repeatedly emphasized that after the upgrade of Cancun, the competitive situation of layer 2 really kicked off; 2) After the upgrade of Cancun, the involution war in the layer 2 market intensified, and rookies frequently appeared to challenge the existing OP+ZK pattern. The issue of decentralization of Sequencer has always been the focus of market attention. As a result, everyone found that with OP-Rollup, which is strong in the layer 2 track, decentralized Sequencer has become a social consensus of "soft decentralization" in the nature of the Stack Alliance. Whatsoever, although everyone criticizes Optimism for not doing anything about decentralization, Optimism seems to be able to reverse the situation with the actual market success brought by OP-Stack. But, can you say that OP-Rollup is all about Rollup? Obviously not. A more reasonable market evolution trend is that the success of OP-Stack will be further amplified, and there will naturally be other successors to the gaps in OP-Stack.

In the past two days, @MetisDAO, the provider of layer2’s decentralized Sequencer solution, has performed exceptionally in the secondary market. 7D’s over 100% increase is very eye-catching, and its TVL is locked. The data also soared to 540 million US dollars in one fell swoop, approaching zkSync. Why?

The core business logic is very simple. Since OP-Rollup has stalled on the issue of sequencer decentralization, as a successor, it proposes a set of reasonable decentralization The Sequencer solution is its market space. Because the issue of Sequencer decentralization is related to the credibility of transactions submitted by layer 2 and the security of the main network interaction of layer 2 transactions. If we put aside the issue of "foundation", the upgraded TPS and Gas in Cancun Rates seem to have become "castles in the air". I do not deny the success of Optimism in Stack's strategy, but Sequencer's decentralization problem will always be solved by other game-breakers. Metis runs multiple Sequencer candidate nodes in the form of POS staking. The nodes compete for block rewards through an election mechanism. At the same time, evildoers will be punished by Slash. This POS consensus bundles each Sequencer as a stakeholder into a community of interests. The Metis Foundation uses Token incentives and spends 4.6 million $METIS tokens to incentivize Sequencer mining, new project deployment, and other subsequent ecosystems. Compared with Optimism, the market value of Metis is still low. Without a head-to-head fight with OP, the decentralized Sequencer alone can open up a vast market. Metis is just an eye-catching typical example recently. In my opinion, after the Cancun upgrade, the size of the layer2 market will further expand. The cutting-edge layer2 suppliers will try their best to steal meat from the mouths of the two giant crocodiles, OP and ZK. Do your best to take the layer 2 track to a new level. Of course, more opportunities will also be found in the cutting-edge layer 2.

3) layer2 gradually evolves into a modular system, the orthodoxy will be broken, and the chivalrous layer2 will be replaced by the generalized layer2. I have mentioned in many articles before that the core of layer2 is the DA capability of Ethereum. If the full nodes of the main network do not participate in the verification of layer2 data security, the main network will actually become a "bulletin board" and layer2 will not be able to Inherit the security of the main network. Therefore, those who rely on Ethereum DA are chivalrous layer 2, while those who escape the scope of Ethereum DA are general layer 2. (To be radical, you don’t need to recognize it as layer 2)

But when the layer 2 market reaches a certain scale, the purely chivalrous legitimacy of Ethereum layer 2 may be broken. . The reason is the same as OP-Rollup's Fraud proof, which proves that even if there is no actual battle-tested challenge, it can be selectively ignored by the market. Technology is only a part of business logic, and the market and ecology have the final say. For example, Optimism can always perform miracles in the name of optimism. This means that after the Cancun upgrade, third-party DA solutions will invade layer2, including @CelestiaOrg 's third-party DA solution, @EspressoSys 's shared Sequencer solution, etc. Although everyone is reluctant, the business logic of modular evolution will gradually break the line of defense that the Ethereum main network can maintain. The focus of OP-Stack stack promotion is to achieve shared Sequencer. The more strategic alliances OP has in the future, the greater the benefits it can capture through Sequencer. On the contrary, the interests it will be involved in from multiple parties will also become greater. This social consensus will become New constraints other than technology have stabilized Optimism in the position of a big brother;

The focus of the ZK-Stack stack is to implement a shared Prover system, and its own DA capabilities and third-party DA capabilities such as Celestia, of course, the limited DA capabilities of the main network, will fall within the scope of ZK's strategic enclosure. Its development focus is the new multi-chain ZK layout interface of layer3 Hyperchains. Who provides the DA is not critical. Their interests are oriented. In fact, they don’t care where DA is. The only one who cares about DA is Ethereum itself. Therefore, in the face of Celestia's continued grab for the DA market, Vitalik waved the flag for Plasma+ZK, but OP+ZK, which is busy with strategic expansion, does not care about this. They only care about how big the layer2 camp covered by their Stack strategy will be. After all, RaaS is It is the business end of layer2. All in all, the upgraded layer2 track in Cancun will be extremely exciting. Whether it is the frequent showing of new talents or the expansion of layer2's strategic boundaries, it will stimulate the layer2 market to move toward "diversification" and prosperity. The layer 2 track will eventually become a highly modular market that integrates ZK technology + OP framework + various DA solutions + various Sequencer services + various Gas fee models.