Prediction: How will the market landscape of Layer2 evolve after the upgrade of Cancun?

Haotian

23-12-26 16:35

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Original author: Haotian

Editor's note: Today, the native token METIS of Metis reached a price of $76, with a 7-day increase of 191.3%. In addition, the prices of tokens such as $OP and $ARB have also risen continuously. The silence of Layer for many days has finally been broken. At the same time, the upgrade of Cancun is coming, how will the Layer 2 pattern change afterwards? Regarding this, crypto researcher Haotian expressed his views on X, and BlockBeats has compiled them as follows:

Recently, Layer2 finally broke the silence and made a strong comeback, with tokens such as $OP, $ARB, and $METIS shining brightly, just like the Show Time moment before the upgrade of Cancun.

Why did the competition within Layer2 of the upgraded Cancun only truly begin after the upgrade, and how will the market landscape of Layer2 evolve after the upgrade? Next, let me share my thoughts:

1) Ethereum's KanKun upgrade EIP4844 Proto-Danksharding proposal has been implemented, which will bring a "quality" boost to Layer2 Rollup projects.

By introducing the new data structure of Blob space, the limitations of relying on calldata to store data in the past have been iterated, while improving the data availability capability of the Ethereum mainnet.

Compared to the calldata full node storage structure, Blob is designed for temporary storage of partial nodes, which can greatly increase the data submission limit of Layer2 to the main network in a single transaction, expand its TPS, and improve data storage efficiency while reducing data storage costs. The improvement in DA capability is due to the one-month temporary storage, which is more than enough to cope with the 7-day fraud proof time window of OP-Rollup.

The result is that the transaction volume submitted by Layer2 to the main network will significantly increase, and the cost per user will also decrease significantly. Before the Cancun upgrade, Layer2 boasted about its TPS, but most of it was in a testing environment. Instead, users experienced a terrible gas fee wear and tear, which made them feel that Layer2 did not live up to its name.

After the upgrade of Cancun, Layer2 players no longer have the performance bottleneck of the main network, and can no longer use the restriction of the main network as an excuse. TPS and Gas, these hard indicators, will directly become a test and a key factor in reshaping the competition landscape of Layer2.

This is exactly why I have repeatedly emphasized that the competition of Layer2 truly begins after the upgrade of Cancun.

2) After the upgrade of Cancun, the competition within the Layer2 market intensified, with new players emerging to challenge the existing OP+ZK landscape.

Regarding the decentralization issue of Sequencer, which has always been a focus of market attention, it was discovered that in the Layer2 track dominated by OP-Rollup, the decentralized Sequencer has become a social consensus of "soft decentralization" with the nature of Stack alliance.

Whatsoever, feel free to criticize Optimism's inaction problem in decentralization, but Optimism's market success with OP-Stack seems to be able to reverse the situation. However, can you say that OP-Rollup is all there is to Rollup? Obviously not. A more reasonable market trend is that the success of OP-Stack will be further amplified, and there will naturally be other relay players in the blank spaces of OP-Stack.

These days, the decentralized Sequencer solution provider @MetisDAO for Layer2 has performed extraordinarily well in the secondary market, with a staggering 7-day increase of over 100%. Its TVL lock-up data has also soared to $540 million, approaching zkSync. Why?

The core business logic is simple. Since OP-Rollup has reached a bottleneck in decentralizing the sequencer, proposing a reasonable decentralized Sequencer solution as a relay is its market space.

Because the decentralization issue of Sequencer is related to the credibility of submitting transactions on Layer2, as well as the security issue of Layer2 transaction interaction on the main network. If we ignore the "foundation" issue, the TPS and gas rates of the upgraded Kankan seem to be "castles in the air". I do not deny the success of Optimism in the Stack strategy, but there will always be other breakthroughs to solve the decentralization issue of Sequencer.

Metis uses POS staking to run multiple Sequencer backup nodes, and these nodes compete for block rewards through an election mechanism. At the same time, malicious behavior will be punished by Slash. This POS consensus binds each Sequencer as a stakeholder in a common interest community. The Metis Foundation uses token incentives, investing 4.6 million $METIS tokens to incentivize Sequencer mining, new project deployment, and other subsequent ecosystems.

Compared to Optimism, Metis has a lower market value and does not directly compete with OP. However, even by focusing solely on decentralized sequencing, it can open up a vast market.

Metis is just a recent eye-catching example. In my opinion, after the upgrade of Cancun, the market size of Layer2 will further expand. The new Layer2 suppliers will have to compete with the two giants, OP and ZK, and use all kinds of tricks to take a bite out of the Layer2 track and open up new horizons. Of course, there will be more opportunities in the new Layer2.

3) Layer2 gradually evolves into modularization, and orthodoxy will be broken, narrow Layer2 will be replaced by broad Layer2.

I have mentioned in several articles before that the core of Layer2 is Ethereum's DA capability. If the full nodes of the main network do not participate in the verification of Layer2 data security, the main network actually becomes a "bulletin board", and Layer2 cannot inherit the security of the main network. Therefore, those that rely on Ethereum DA are narrow Layer2, and those that escape the scope of Ethereum DA are broad Layer2. (Radically, it can also be not recognized as Layer2.)

However, when the Layer2 market reaches a certain scale, the pure narrow definition of Ethereum Layer2 orthodoxy may be broken. Just like the Fraud proof of OP-Rollup, which has not been battle-tested, can also be selectively ignored by the market. Technology is only a part of business logic, and the market and ecology have the final say, just like how Optimism can always work wonders in the name of optimism.

This means that third-party DA solutions, including @CelestiaOrg's third-party DA solution and @EspressoSys's shared Sequencer solution, will invade Layer2 after Cancun upgrade. Although everyone is reluctant, the commercial logic of modular evolution will gradually break the defense line that Ethereum mainnet can hold.

The key point of OP-Stack's stack promotion is to implement a shared Sequencer. The more OP strategic alliances in the future, the greater the benefits it can capture through Sequencer. Conversely, the multiple interests it receives will also increase. This social consensus will become a new constraint outside of technology, keeping Optimism in a dominant position.

The focus of ZK-Stack stack is to implement a shared Prover system, its own DA capability and third-party DA capabilities such as Celestia. Of course, the limited DA capability of the main network will also belong to the strategic scope of ZK. Its development focus is the new multi-chain ZK version map interface of Layer3 Hyperchains, and who provides the DA is not the key.

Their interest orientation determines that they don't really care about where DA is, and only Ethereum cares about DA. Therefore, in the face of Celestia's continuous grabbing of the DA market, Vitalik is shouting for Plasma+ZK, but OP+ZK, who is busy with strategic expansion, doesn't care about these things. They only care about how big the layer2 camp covered by their Stack strategy will be, after all, RaaS is the commercial endgame of layer2.

In summary, the upgraded Layer2 track in Cancun will be exceptionally exciting. Whether it's the emerging players frequently showing their prowess or the expansion of Layer2 strategic boundaries, it will stimulate the Layer2 market towards a "diverse" and prosperous direction.

Layer2 track will eventually become a highly modular market that integrates ZK technology, OP framework, various DA solutions, various Sequencer services, various Gas fee models, etc.