Do you ever read a sentence and think to yourself “How would I even begin to explain this to a nocoiner?” Not because they’re dumb – they’re not – but because crypto’s complex. Even industry experts may need to pause for a second before fully digesting a sentence like “Why scalability routes through Layer 3 in the post-ZK rollup era.”
It’s a valid phrase, however, for there’s no other way to get the point across as succinctly. Cos it’s true: now that Pectra’s done its bit to make Layer 2s cheaper and faster, if you’re trying to squeeze more juice out of your network, dapp, or protocol, the only viable option is to let L3 take the strain.
By passing the buck up a layer, your network can retain all the things it currently does well – active users; broad developer community; feature-rich DEXs – while benefiting from Layer 3’s core strengths.
We’ll get to Layer 3 in a moment, but let’s start at the bottom and work our way up, so we can crystallize the connection between Pectra, Ethereum, EVM Layer 2s, ZK rollups, and what lies beyond in Layer 3 land. Don your big brain hat, take a deep breath, count to your favorite hexadecimal number and let’s begin.
Pectra Picked Up the Baton
With Pectra now in the bag, things are looking rosier in EVM land. Not just on Ethereum, where the hard fork has introduced a host of enhancements, from higher staking limits for validators to gas abstraction for seamless onboarding, but also on Layer 2.
The key improvement that Pectra has added in the context of scalability is EIP-7691 which increases the number of blobs per block. A blob is basically a big chunk of data, often dispatched from a Layer 2 rollup, which has sent it to the main chain in a single batch for confirmation.
Thus, increasing the blobs per block on Ethereum primarily benefits EVM L2s such as Arbitrum and Optimism – as well as ZK rollups like Starknet and Polygon zkEVM. There’s a few ways in which Pectra’s blob fixes translate into lower fees and greater throughput on EVM rollups.
We probably don’t need to detail them all right now (though if you wanna geek out on blobs, the internet’s your friend), but broadly speaking, blobs make traditional data storage more expensive, pushing Layer 2s to use blobs instead, making transactions cheaper and more efficient, especially for ZK rollups.
For Layer 2s, Pectra has had the effect of reducing data availability costs, lowering transaction fees, and improving throughput. It’s particularly benefited ZK rollups such as Starknet which bundle transactions and submit validity proofs to Layer 1. Thanks to Pectra, they inherit lower data costs, making them more competitive for high-throughput applications.
But Pectra’s L2 benefits end there, because you can’t blob your way to even greater scalability; there’s a finite limit on the amount of blobs per block Ethereum can accommodate.
If you want to go faster, cheaper, and more throughputtier (throughputtier isn’t a word, but it really should be given some of the other words featured here that are not made up), you need to look elsewhere. And increasingly, projects working on L2 are looking up to L3 to alleviate their scaling woes.
Enter Layer 3
While L2s are intent on attracting as many users to their network as possible, L3s are playing a different game. They too want to serve as many users as possible, but are by and large not interested in doing so on their own turf. In most cases, you don’t need to bridge funds to an L3 to use it: it comes to you. Layer 3s are the Uber Eats of blockchain, bringing their consumables directly to your door.
Orbs encapsulates this model, providing existing networks with greater scalability by routing liquidity via its own L3. This is aggregated from multiple sources, improving pricing and reducing slippage for DEXs and preps protocols.
At the same time, it avoids adding additional onchain bloat for the networks where its liquidity is being directed. This allows DEXs to bypass the limitations of their native architecture by effectively gaining an expansion pack that enhances their ability to scale.
Rather than looking to replace Layer 2s, Orbs is intent on enhancing their existing capabilities. By acting as an intermediary execution layer, it’s able to handle complex logic and scripts, freeing native smart contracts from the burden associated with processing these. Basically, Orbs frees L2s from having to cook because it prepares takeout and delivers it directly to them.
It’s an ingenious way of leveraging Layer 3 technology to enhance the existing L2 landscape, but it’s by no means the only way of going about this. ZK Chains (formerly known as Hyperchains) are another smart approach whereby multiple instances of a zkEVM work in parallel.
These operate with a shared bridge contract on Ethereum’s L1 as well as native bridges between individual rollups, enhancing the overall efficiency of the network. As developer zkSync explains, “by leveraging efficient relayers and minimizing manual operations, transaction costs are kept low, akin to standard gas fees within a single chain.”
Another approach to scaling dapps, not just DEXs but gaming applications too, is demonstrated by Starknet with its Appchains. While described as “customizable L2s,” they operate as L3s in all but name since they’re designed to power specific applications, allowing configuration of block size, latency, and consensus mechanisms.
Or as developer Starkware describes them, “Appchains are another dish in Starknet’s extensive scaling buffet that brings another flavor to the range of Starknet’s scaling solutions, allowing dApps to optimize where and how they scale.”
When a popular dapp that’s seeing significant transaction volume switches to a dedicated Appchain, it no longer needs to worry about congestion and bottlenecks, caused by either its own users or other network users.
It’s essentially like receiving your own private motor lane that no other traffic can enter, while retaining the same connectivity to the national highway network. Not only does this allow dapps to scale, but it allows them to do so on their terms, precisely choosing the parameters governing their own Appchain.
Rollups Can Only Go So Far
Rollups such as Optimism, as well as ZK rollups like Starknet, have done a lot to help scale Ethereum. They’ve moved significant traffic away from Ethereum L1, and as a result fees there are significantly lower.
Instead, traffic has moved to L2, where throughput is higher, the fee environment is much more predictable, and bottlenecks – while not unheard of – are far less common.
Pectra has boosted these capabilities further, allowing ZK rollups to batch transactions even more efficiently which should serve to reduce fees slightly for L2 users.
For dapps that require further scalability, without downing tools and migrating to a different blockchain altogether, the next step for scaling is realistically L3. It’s the only viable means of extending the capabilities of what can be done on Layer 2 without rebuilding everything from the ground up.
By handling the heavy lifting, L3 technology eases the demands placed on native smart contracts, keeping computation costs to a minimum.
As a result, L2 dapps can enjoy the best of both worlds: the network effects of being deployed on a thriving decentralized blockchain coupled with the massive scalability that L3s, optimized for speed and throughput, can bring. Thanks to Layer 3, Layer 2 is a better place to play, trade, and build.
Also Read: Power of Robust Ecosystem: Why it Matters for Crypto Projects
