Key Points
- Ethereum’s co-founder Vitalik Buterin is advocating for an increase in L1 gas limits to improve scalability.
- The proposed increase could reduce transaction costs and strengthen censorship resistance.
Ethereum’s current gas limit plays a pivotal role in its network efficiency. Recently, the limit was raised to 36 million, but discussions are still ongoing about whether it should be increased further. In a recent blog post, Vitalik Buterin proposed a substantial increase in L1 capacity, even in a rollup-centric environment. He believes that lower transaction costs, stronger resistance to censorship, and improved scalability are crucial for Ethereum’s future.
Importance of Layer 1
Despite most activities being handled by Layer 2 solutions, Buterin insists that Layer 1 (L1) should not be overlooked. He suggests that scaling the base layer by almost ten times could bring significant benefits, such as simplified application development and enhanced security. This strategy would not reverse the trend towards rollups but instead provide a more robust foundation for Ethereum’s evolving ecosystem.
Censorship resistance is a core principle of Ethereum. A decentralized network should ensure prompt processing of transactions when users pay market fees. L1 validators are inherently decentralized, making censorship more challenging. On the other hand, Layer 2 solutions depend on a smaller group of operators, which increases the risk of transaction exclusion.
Layer 1’s Role in Cost and Security
Ethereum’s L1 serves as a protection against censorship on Layer 2 networks. If an L2 refuses to process a transaction, users can force inclusion on L1, albeit at a cost. At present, this process costs around $4.50 per transaction. Buterin argues that for this solution to be feasible, the cost must be reduced to less than $1. Achieving this affordability would necessitate an estimated 4.5x increase in L1 capacity.
Another significant issue is the transfer of assets between different L2s. When users move assets, they often require L1 transactions, particularly for lower-volume assets like NFTs. Currently, this process costs about $13.87 per transaction. With better designs, the cost could be reduced to as low as $0.28, but this would require at least a sixfold increase in L1 scalability.
The problem goes beyond daily transactions. In extreme cases, such as a mass exit from an L2, users need L1 to process withdrawals. The current capacity could only support 7.56 million users exiting a failing Plasma chain in a week. This limitation raises serious concerns about Ethereum’s ability to handle critical events if a major L2 encounters problems.
Optimizing mass exit protocols could allow L1 to support up to 121 million users in a single week, or 518 million over a month. However, even with these improvements, handling the scale of a global platform remains a challenge. If Ethereum aims to support a user base the size of PlayStation’s—approximately 116 million users—its current infrastructure may struggle to keep up.
Security is another concern. Issuing ERC20 tokens on L1 offers stronger protection against governance attacks. Many tokens are launched on L2s, but their security depends on the integrity of the L2 operator. L1 issuance is safer but more expensive. Lowering L1 transaction costs could promote more secure token launches, especially for smaller markets.
Wallet operations like key management also contribute to Ethereum’s gas load. Keystore wallets with L1 verification could simplify cross-L2 interactions, but gas costs must be reduced for this to be feasible. One potential solution is to shift key management functions to L2s while preserving L1-based security features.
