Key Points
The Ethereum (ETH) ecosystem has been heavily dependent on L2 solutions since adopting a layer 2-centric approach.
Yet, these solutions are finding it hard to compete, especially against alternatives like Solana (SOL).
Solana has been a favorite during the recent meme coin craze due to its low fees, high transaction speed, and user-friendly nature.
Challenges with Ethereum L2 Solutions
Many meme coin projects have chosen Solana over Ethereum L2s due to several factors.
These include lower transaction costs, high throughput from Solana’s multithreaded architecture, and a better developer experience.
Scalability is crucial as it determines the number of transactions a blockchain can process.
This is vital for projects like meme coins, which need to handle a high volume of transactions while keeping fees low.
Without scalability, these projects cannot flourish.
Ethereum’s L2 solutions, however, are not meeting these needs.
Ethereum’s architecture has inherent limitations, with its founder, Vitalik Buterin, admitting that Ethereum was not designed for scalability.
One key limitation is the lack of multithreading in the Ethereum Virtual Machine (EVM), which can only process one transaction at a time.
In contrast, Solana’s multithreaded architecture allows it to process multiple transactions simultaneously.
Most L2 solutions inherit Ethereum’s single-threaded EVM design, resulting in low efficiency.
Another major issue is the unstable fees during periods of high network activity, which is problematic for fee-sensitive applications like meme coins.
Furthermore, the lack of interoperability between different L2s limits the potential of L2 scalability.
To further scale, L2s need to enhance interoperability and diverge from Ethereum’s single-threaded EVM design.
Ethereum’s L1 needs to support interoperability among L2s, and the recent ERC-7786: Cross-Chain Messaging Gateway is a step in this direction.
Architectural updates, such as adopting parallel execution, may require a complete overhaul of the EVM, but the potential scalability gains make it a necessary step.
Ethereum’s L2 solutions face significant challenges in delivering the scalability and cost-effectiveness demanded by applications like meme coins.
To stay competitive, Ethereum L2s need to address these architectural limitations, enhance interoperability, and embrace innovations in blockchain design.
This is crucial for Ethereum L2s to achieve the scalability needed to support widespread adoption and fend off competition from emerging blockchains like Solana.
Laurent Zhang is the president and founder of Arcology Network, a revolutionizing Ethereum layer-2 solution.
He has an extensive background in executive leadership and innovation, and holds a degree from Oxford Brookes University.
Laurent has over a decade of experience in science, research, engineering, and leadership roles.
He has been the president of Arcology Network since 2017, envisioning a future where blockchain technology reaches its full potential.