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Ethereum's Layer 2 Networks Embrace Rollups for Enhanced Security and Decentralization

Coin WorldSunday, Jan 26, 2025 9:26 pm ET

1min read

Ethereum's layer 2 networks are exploring the implementation of based and native rollups to enhance security and connectivity, potentially at the cost of revenue. Executives from leading layer 2 networks, including Base, Arbitrum, and Optimism, have expressed their willingness to adopt these rollup models to improve collaboration between Ethereum's base layer and layer 2s.

Based rollups, proposed by Ethereum core developer Justin Drake, aim to return the block-building process to the base layer, improving the network's decentralization. This would involve all Ethereum validators participating in block-building, as opposed to the current centralized sequencers. Meanwhile, native rollups would enhance how transactions are executed on the base layer, making the network more composable.

While these rollups could bring more revenue back to Ethereum's base layer and potentially have a positive impact on Ether's (ETH) price, they would also mean that transactions are confirmed in 12 seconds instead of around 1 second on many Ethereum layer 2s. However, several layer 2 executives are also in favor of implementing "FABRIC," an infrastructure that would support based rollups and help address Ethereum's interoperability problems.

The shift towards based and native rollups reflects a broader commitment to decentralization, aiming to improve security and reduce fragmentation in Ethereum's ecosystem. While layer 2 networks may forgo fees for enhanced decentralization, the long-term benefits could significantly outweigh these costs, enhancing the overall value of the Ethereum ecosystem.

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