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When Vitalik Buterin, co-founder of Ethereum (ETH), announced the completion of the long-awaited Merge in September 2022, efficiency was the name of the game for blockchain innovation. In recent years, scalability has overtaken efficiency as the most pressing issue among the ‘big five’ challenges currently facing web3.
Prominent layer-1 chains are now giving way to a wave of emerging layer-2 solutions, which promise to propel the blockchain ecosystem to new heights. Dissimilar from the consolidated efforts that drove the Merge, though, this latest stage of blockchain development—coined “The Surge” in the Ethereum space—has given rise to a suite of issues. A new scalability paradigm, spearheaded by a constantly expanding galaxy of L2s, has led to a fragmented blockchain ecosystem characterized by multiple chains, each with its own rules, tokens, and transaction fees.
For some, participating in capitalism means believing that competition breeds success. But when it comes to blockchains, more isn’t necessarily better. Just as the tech shortcomings of the early internet made it challenging for newcomers to navigate websites, the complexity of managing multiple blockchain layers presents significant challenges for users.
If we are to steward web3 to mass adoption, the time has come to ask: how many layers are too many?
Challenges of a fragmented blockchain ecosystem
As we stack more layers onto our proverbial blockchain cake, challenges for both users and developers continue to arise in the form of hampered usability and stifled innovation. Although the Wild West of L2s feels like a net positive, as more complexities are piled on top of user experience, we risk our blockchain cake becoming nearly impossible to slice through.
Onboarding into web3 can be a daunting task in and of itself, so juggling various wallets, tokens, and fee schedules across chains to perform simple tasks leads to subpar or even arduous user experience. For many, a fragmented ecosystem makes the barrier to entry that much higher.
And the struggle faced by developers is quite similar. The complexity of working across multiple layers can mean slower build times and increased development costs. The lack of interoperability between an always-increasing number of chains further complicates project scopes, especially for teams endeavoring to build cross-chain applications. In the current L2 sector, progress is easily hindered when developers feel forced to navigate a convoluted landscape.
Layer 2s: A potential that’s lacking
Of course, this layer cake approach to scalability isn’t without its merits. There’s a rhyme and reason to the current disjointed system of L2 constellations dominating the blockchain sector.
On paper, L2 solutions offer substantial benefits, including enhanced scalability and speed. Offloading transactions from an L1 to an L2 means increasing the overall volume of transactions that can be processed by said L1. Following the reaction further, L2s can lead to faster and more cost-effective operations, enhanced security, and an extra layer of protection for sensitive transactions.
However, these benefits, as we’ve seen, may only outweigh the disadvantages for so long. Fragmentation creates a complex web that can feel overwhelming, especially as the landscape of L2 solutions continues to expand and a clear solution remains elusive.
A unified approach
Fortunately, there is a promising solution to the challenges presented by the L2 race—chain abstraction. By removing the complexities and overarching technicalities of the blockchain that regularly interfere with usability, chain abstraction can help maintain the broader benefits of decentralized technology while also lowering the barrier to entry to general consumers.
A solution that many proponents of mass adoption are already in support of, chain abstraction allows us to create a unified layer that communicates with multiple blockchains and simplifies user interactions. This approach allows users to manage their assets and execute transactions without needing to understand the intricacies of each underlying layer.
Of course, chain abstraction doesn’t simply exist on its own, which is where omnichain infrastructure comes into play. As a practical application of chain abstraction, omnichain infrastructure takes the concept further by empowering the creation of a cohesive, interoperable ecosystem that facilitates seamless interactions across various blockchains.
By powering fragmentation solutions such as seamless cross-chain transactions and secure and efficient verifications while incentivizing developer flexibility, omnichain infrastructure makes a simplified user-centric design possible and blockchain interactions more intuitive and efficient.
Multichain today, omnichain tomorrow
So, where do we go from here?
While it’s true that the proliferation of L2s has ushered web3 into an era of fragmentation, complexity still exists throughout the blockchain. Layers are to be found everywhere, both within and beyond the L1 and L2 paradigms. Ultimately, this convolution only becomes more rampant as legacy institutions and consumer interests lead to bursts of new innovation, new platforms, and new needs.
This is where our initial question comes back into view. Because for the majority of new users, anything beyond a single integrated layer might simply be too many.
If scalability is as important as most devs make it out to be (and spoiler alert, it is), we cannot glaze over the potential of omnichain infrastructure to aid in our mass adoption journey. By interconnecting products and blockchains, uniting data to create seamless experiences, and making the power of web3 easily accessible, we can fuel even the most ambitious endeavors.
