Close Menu
  • Coins
    • Bitcoin
    • Ethereum
    • Altcoins
    • NFT
  • Blockchain
  • DeFi
  • Metaverse
  • Regulation
  • Other
    • Exchanges
    • ICO
    • GameFi
    • Mining
    • Legal
  • MarketCap
What's Hot

Can the Company Weather the Storm?

01/08/2026

Markets on Edge as Trump Vows to Hit Iran ‘Extremely Hard’

01/08/2026

USDH Deployer Moves $15M in HYPE to New Wallet, Sells 200,000 Tokens After Unlock

01/08/2026
Facebook X (Twitter) Instagram
  • Back to NBTC homepage
  • Privacy Policy
  • Contact
X (Twitter) Telegram Facebook LinkedIn RSS
NBTC News
  • Coins
    1. Bitcoin
    2. Ethereum
    3. Altcoins
    4. NFT
    5. View All

    Can the Company Weather the Storm?

    01/08/2026

    $35,000 Worst Case as Analyst Maps Levels for ETH, SOL and XRP

    01/08/2026

    Bitcoin Price Falls to $62,000 as Hawkish Fed Shift Raises Risk of Deeper Pullback

    01/08/2026

    Bitcoin tumbles toward $63K as strong jobs report reinforces hawkish Fed

    01/08/2026

    Arthur Hayes Adds $6.3M in ETH, Extending Recent Buying Streak

    31/07/2026

    Ethereum Could Hit $20K as Multi-Year BTC Base Completes: Analyst

    31/07/2026

    Bitmine Withdraws $14.6M in ETH from BitGo, On-Chain Data Shows Continued Accumulation

    31/07/2026

    Ethereum (ETH) Price Holds Descending Channel Support: Key Levels to Watch

    31/07/2026

    USDH Deployer Moves $15M in HYPE to New Wallet, Sells 200,000 Tokens After Unlock

    01/08/2026

    Zcash Shielded Supply Hits Record 5.1 Million as the Token Bucks a Weak Market

    01/08/2026

    Ripple CTO Emeritus Schwartz Reminds What Core Idea Was Amid Washington Expansion

    01/08/2026

    Ripple Execs Celebrate XRPL 14th Anniversary, Credit XRP Holders for Network’s Success

    01/08/2026

    Are NFTs Dead in 2026? What Happened to the Market

    29/07/2026

    NFT Gacha Protocol Fake World Assets Trails Only Sky in Ethereum Daily Revenue

    28/07/2026

    Tensor HQ Declares NFTs Are Forever as Community Engagement Grows

    26/07/2026

    Jupiter Gacha Hits $20M in Volume, Signaling Strong Collector Interest

    26/07/2026

    Can the Company Weather the Storm?

    01/08/2026

    Markets on Edge as Trump Vows to Hit Iran ‘Extremely Hard’

    01/08/2026

    USDH Deployer Moves $15M in HYPE to New Wallet, Sells 200,000 Tokens After Unlock

    01/08/2026

    AI Company Sues Town for Trying to Block Data Center Near National Park

    01/08/2026
  • Blockchain

    Trex Network Announces $100 Billion in Tokenized Assets Using Polygon

    01/08/2026

    MarsCat Partners with Cwallet to Expand Web3 Wallet Ecosystem

    01/08/2026

    NEAR Protocol Enhances 1Click Swap API with Confidential Intents

    31/07/2026

    Why Ondo Abandoned Its Blockchain to Build an Execution Network Instead

    31/07/2026

    LuLuFin and CreataChain Test Blockchain Integration

    31/07/2026
  • DeFi

    Morph Joins Bitget, Morpho, and Gauntlet to Offer Institutional-Scale DeFi Yield

    01/08/2026

    Why DeFi giant Aave is pulling the plug on six hyped blockchains making less than $5,000 a quarter

    01/08/2026

    Uniswap Launches Earn Feature for Onchain Deposits in USDC, USDT, and ETH

    31/07/2026

    Coinbase Wrapped XRP Expands DeFi Utility Through Doppler Finance on Base

    31/07/2026

    Aave is Gradually Removing 75 Low-Utilization Reserve Assets from its Platform! Here are the Details

    31/07/2026
  • Metaverse

    Is Solana Gaming Back? Kintara Activity Fuels Renewed Optimism in Onchain MMOs

    24/06/2026

    The Sandbox launches AI game engine ‘The Sandbox Studio’ for next-generation creators

    10/06/2026

    Meta commits $13M in funding for Oversight Board through 2028

    29/05/2026

    Why Animoca’s Yat Siu says the future is 100 billion AI agents

    07/05/2026

    ‘8,000 Jobs’—Polymarket Sees Tech Layoff Surge As Meta AI Push Bites

    18/04/2026
  • Regulation

    Markets on Edge as Trump Vows to Hit Iran ‘Extremely Hard’

    01/08/2026

    Bank of Korea Could Launch Live Deposit Token Trials as Early as September

    01/08/2026

    Cathie Wood Highlights USDT’s Stability Impact — Insights from ARK Invest

    01/08/2026

    Bitcoin-Backed STRC Trades 13% Below Fair Value, Ex-Goldman Analyst Says

    01/08/2026

    Hong Kong’s HKDAP stablecoin could launch this month

    01/08/2026
  • Other
    1. Exchanges
    2. ICO
    3. GameFi
    4. Mining
    5. Legal
    6. View All

    What Was Mt. Gox? History, Hack & Repayment Status

    01/08/2026

    How BitMEX’s March 12 Outage May Have Prevented a Deeper Bitcoin Crash – and Why Bybit Took Over

    01/08/2026

    Spot DEX volume hits 2-year low – Is crypto’s liquidity drying up?

    01/08/2026

    World Cup generated $20B in blockchain prediction market volume: Chainalysis

    01/08/2026

    ICO market slows sharply with only six completions in 2026

    30/04/2026

    South Korea Poised to Lift Ban on Domestic ICOs After 7 Years

    19/12/2025

    Why 2025’s Token Boom Looks Both Familiar and Dangerous

    31/10/2025

    ICO for bitcoin yield farming chain Corn screams we’re so back

    22/01/2025

    YGG Play Shuts Down Services as Yield Guild Pivots to AI Data

    01/08/2026

    why gameplay now beats crypto rewards

    29/07/2026

    From NFT gaming to mining simulators

    29/07/2026

    Top 11 NFT games to play in July 2026

    16/07/2026

    Russia to Ban Crypto Mining in Moscow and Parts of Kursk Region

    01/08/2026

    Zero mining revenue, 98% cash collapse, 2 million mysterious shares sets up miner’s 7 billion share survival play

    01/08/2026

    Bitcoin Hashrate Declines for 287 Days, Difficulty Down 19.9% from Peak as Miners Pivot to AI

    01/08/2026

    A cleaning company with just $4.1M in cash and a stash of Dogecoin just committed $500M to an AI mega-deal

    31/07/2026

    AI Company Sues Town for Trying to Block Data Center Near National Park

    01/08/2026

    Crypto Kiosk Scams Cost Texans $57M as Lawmakers Weigh a Ban

    01/08/2026

    Republican Senators Push Back on Stablecoin Yield Provisions in CLARITY Act

    01/08/2026

    China arrests 16 in crypto money-laundering crackdown tied to telecom fraud

    01/08/2026

    Can the Company Weather the Storm?

    01/08/2026

    Markets on Edge as Trump Vows to Hit Iran ‘Extremely Hard’

    01/08/2026

    USDH Deployer Moves $15M in HYPE to New Wallet, Sells 200,000 Tokens After Unlock

    01/08/2026

    AI Company Sues Town for Trying to Block Data Center Near National Park

    01/08/2026
  • MarketCap
NBTC News
Home»Blockchain»The L2 compromise is broken, it’s time for a better foundation
Blockchain

The L2 compromise is broken, it’s time for a better foundation

NBTCBy NBTC17/10/2025No Comments6 Mins Read
Share
Facebook Twitter LinkedIn Pinterest Email


Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial.

The second quarter of 2025 has been a reality check for blockchain scaling, and as capital keeps pouring into rollups and sidechains, the cracks in the layer-2 model are widening. The original promise of L2s was simple: scaling up L1s, but the costs, delays, and fragmentation in liquidity and user experience keep stacking up.

Summary

  • L2s were meant to scale Ethereum, but they’ve introduced new problems, while relying on centralized sequencers that can become single points of failure.
  • At their core, L2s handle sequencing and state computation, using Optimistic or ZK Rollups to settle on L1. Each comes with trade-offs: long finality in Optimistic Rollups and heavy computational costs in ZK Rollups.
  • Future efficiency lies in separating computation from verification — using centralized supercomputers for computation and decentralized networks for parallel verification, enabling scalability without sacrificing security.
  • The “total order” model of blockchains is outdated; moving toward local, account-based ordering can unlock massive parallelism, ending the “L2 compromise” and paving the way for a scalable, future-ready web3 foundation.

New projects like stablecoin payments start questioning the L2 paradigm, asking if L2s are truly secure, and are their sequencers more like single points of failure and censorship? Often, they’ll end up taking a pessimistic view that perhaps fragmentation is simply inevitable in web3.

Are we building a future on a solid foundation or a house of cards? L2s must face and answer these questions. After all, if Ethereum’s (ETH) base consensus layer were inherently fast, cheap, and infinitely scalable, the entire L2 ecosystem as we know it now would be redundant. Countless rollups and sidechains were proposed as “L1s’ add-ons” to mitigate the fundamental constraints of the underlying L1s. It’s a form of technical debt, a complex, fragmented workaround that has been offloaded onto web3 users and developers.

You might also like: Fair launch is the broken promise of crypto | Opinion

And to answer these questions, it’s necessary to deconstruct the entire concept of an L2 to its fundamental components, to reveal a path toward a more robust and efficient design.

An anatomy of L2s

Structure determines function. It’s a basic principle in biology that also holds in computer systems. To decide the proper structure and architecture of L2s, we must examine their functions carefully.

At its core, every L2 performs two critical functions: Sequencing, i.e., ordering transactions; as well as computing and proving the new state. A sequencer, whether a centralized entity or a decentralized network, collects, orders, and batches user transactions. This batch is then executed, resulting in an updated state (e.g., new token balances). This state must be settled on the L1 for security via Optimistic or ZK Rollups.

Optimistic Rollups assume all state transitions are valid, and rely on a challenge period (often 7 days) where anyone can submit fraud proofs. This creates a major UX trade-off, long finality times. ZK Rollups use zero-knowledge proofs to mathematically verify the correctness of every state transition before it hits L1, enabling near-instant finality. The trade-off is that they’re computationally intensive and complex to build. ZK provers themselves can be buggy, leading to catastrophic consequences, and formal verification of these, if feasible at all, is very expensive.

Sequencing is a governance and design choice for each L2. Some prefer a centralized solution for efficiency (or maybe for that censorship power; who knows), while others prefer a decentralized solution for more fairness and robustness. Ultimately, L2s decide how they wanna do their own sequencing.

State Claim Generation and Verification is where we can do much, much better in efficiency. Once a batch of transactions is sequenced, computing the next state is a purely computational task, and that can be done using just a single supercomputer, focused solely on raw speed, without the overhead of decentralization at all. That supercomputer can even be shared among L2s!

Once this new state is claimed, its verification becomes a separate, parallelized process. A massive network of verifiers can work in parallel to verify the claim. Such is also the very philosophy behind Ethereum’s stateless clients and high-performance implementations like MegaETH.

Parallel verification is infinitely scalable

Parallel verification is infinitely scalable. No matter how fast L2s (and that supercomputer) produce claims, the verification network can always catch up by adding more verifiers. The latency here is precisely the verification time, a fixed, minimal number. This is the theoretical optimum by using decentralization effectively: to verify, not to compute.

After sequencing and state verification, the L2’s job is nearly complete. The final step is to publish the verified state to a decentralized network, the L1, for ultimate settlement and security.

This final step exposes the elephant in the room: blockchains are terrible settlement layers for L2s! The main computational work is done off-chain, yet L2s must pay a massive premium to finalize on an L1. They face a dual overhead: the L1’s limited throughput, burdened by its total, linear ordering of all transactions, creates congestion and high costs for posting data. Furthermore, they must endure the L1’s inherent finality delay.

For ZK Rollups, this is minutes. For Optimistic Rollups, it’s compounded by a week-long challenge period, a necessary but costly security trade-off.

Farewell, the “total order” myth in web3

Since Bitcoin (BTC), people have been trying hard to squeeze all transactions of a blockchain into a single total order. We are talking about blockchains after all! Unfortunately, this “total order” paradigm is a costly myth and is clearly overkill for L2 settlement. How ironic, that one of the world’s largest decentralized networks and the world’s computer behaves just like a single-threaded desktop!

It’s time to move on. The future is local, account-based ordering, where only transactions interacting with the same account need to be ordered, unlocking massive parallelism and true scalability.

Global ordering of course implies local ordering, but it is also an incredibly naive and simplistic solution. After 15 years of “blockchain”, it is time that we open our eyes and handcraft a better future. The distributed systems scientific domain has already transitioned from the 1980s’ strong consistency concept (which is what blockchains implement) to 2015’s strong eventual consistency model that unleashes parallelism and concurrency. Time for the web3 industry to move on as well, to leave the past behind and follow forward-looking scientific progress.

The age of the L2 compromise is over. It’s time to build on a foundation designed for the future, from which the next wave of web3 adoption will come.

Read more: Web3 is open, transparent, and miserable to build on | Opinion

Xiaohong Chen

Xiaohong Chen is the Chief Technology Officer at Pi Squared Inc., working on fast, parallel, and decentralized systems for payments and settlement. His interests include program correctness, theorem proving, scalable ZK solutions, and applying these techniques to all programming languages. Xiaohong obtained his BSc in Mathematics at Peking University and PhD in Computer Science at the University of Illinois Urbana-Champaign.

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
NBTC

NBTC is the editorial account for NBTC News, covering Bitcoin, Ethereum, DeFi, blockchain infrastructure, exchanges, mining, regulation and digital asset markets. The editorial team focuses on clear sourcing, timely updates and practical context for crypto readers.

Related Posts

Trex Network Announces $100 Billion in Tokenized Assets Using Polygon

01/08/2026

MarsCat Partners with Cwallet to Expand Web3 Wallet Ecosystem

01/08/2026

NEAR Protocol Enhances 1Click Swap API with Confidential Intents

31/07/2026

Why Ondo Abandoned Its Blockchain to Build an Execution Network Instead

31/07/2026
Add A Comment

Comments are closed.

Top Posts
Get Informed

Subscribe to Updates

Get the latest news from NBTC regarding crypto, blockchains and web3 related topics.

Your source for the serious news. This website is crafted specifically to for crazy and hot cryptonews. Visit our main page for more tons of news.

We're social. Connect with us:

Facebook X (Twitter) LinkedIn RSS
Top Insights

Can the Company Weather the Storm?

01/08/2026

Markets on Edge as Trump Vows to Hit Iran ‘Extremely Hard’

01/08/2026

USDH Deployer Moves $15M in HYPE to New Wallet, Sells 200,000 Tokens After Unlock

01/08/2026
Get Informed

Subscribe to Updates

Get the latest news from NBTC regarding crypto, blockchains and web3 related topics.

Type above and press Enter to search. Press Esc to cancel.