Expansion in different forms: from L2 to L3


  • Recursive proof brings many possibilities for novel and surprising designs
  • Introduce the concept of L3, which is an application-specific layer built on L2 recursively
  • L3 provides specific service requirements for applications, such as ultra-high scalability, better management of technology stack and privacy
  • StarkEx, currently serving users as an L2 solution, will migrate to L3
  • A standalone instance of StarkNet will also provide services as L3

Why do we need L3?

Expensive transaction costs on Ethereum drive it to become the settlement layer of L2. We (and others) believe that in the near future, end users will conduct most of their trading activities on L2. Because at that time, transaction costs on L2 will be greatly reduced, and there will be more and more tools that support DeFi and provide more liquidity.

L2 improves scalability by reducing the gas cost of each transaction and increases the transaction rate. At the same time, L2 retains the advantages of decentralization, common logic, and composability. However, some applications may require some special customized features, which may be better served by a new and separate layer: L3 is here!

The relationship between L3 and L2 is the same as the relationship between L2 and L1. As long as L2 can support Verifier smart contracts, L3 can be achieved through validity proofs. When L2 also uses the validity proof submitted to L1 (as StarkNet did), this becomes an extremely elegant recursive structure, because the scalability obtained by L3 will be equal to the expanded capacity of the L2 transaction compression proof Multiplying by L3 transaction compression proves the expanded capacity. In other words, assuming that the cost of each layer is reduced by 1,000 times, then L3 can reduce the cost by 1,000,000 times on the basis of L1-while still maintaining the security of L1.

Imagine that user transactions only cost a little gas!

The main advantages of L3 are:

1. Ultra-high scalability: using the multiplicative effect of recursive proof

2. The designer of the application can better manage the technology stack

a. More deterministic performance and cost,

b. Customized data availability model (for example, Validium-based or application-specific on-chain data compression)

c. Faster feature and technology update rate (for example, the introduction of new features that are not yet ready for universal use).

3. Privacy: For example, using zero-knowledge proofs to provide private transaction services on a public L2 solution.

4. Cheaper/simpler L2-L3 interoperability: Currently depositing/withdrawing funds between L1 and L2 is notoriously expensive. On the contrary, due to the cost-effectiveness of L2, when these capital flows are applied to L3, they will become not only very attractive, but also very easy to implement. Although the latency of transferring assets between L2 and L3 may be longer than the latency between applications deployed on the same L2, the cost and throughput are comparable.

5. Cheaper/simpler L3-L3 interoperability: Each independent L3 will perform interoperability through L2 instead of L1. L2 is obviously cheaper than L1. Without L3, all solutions will operate as L2, which means that interoperability must be performed through L1, which is much more expensive.

6. L3 as L2’s “canary” network: some new innovations may be tested on L3 first, and then open to the public on L2 or L3 (like Kusama’s role for Polkadot)

Multiple L3 and sub-form multi-layer solutions

Multiple L3 will be built on top of L2. In addition, it is possible to build additional layers (L4, etc.) on top of L3 to form fractal layering solutions.

Expansion in different forms: from L2 to L3

Figure 1: A multi-layered ecosystem

Figure 1 depicts an example of this ecosystem model. Its L3 includes:

1. StarkNet using Validium’s data availability scheme, for example, is generally used by applications that are extremely sensitive to pricing.

2. An application-specific StarkNet system customized to achieve better application performance, for example, by using a designated storage structure or data availability compression.

3. StarkEx systems with Validium or Rollup data availability solutions (such as systems that support dYdX, Sorare, Immutable, DeversiFi), they can immediately bring StarkNet the battlefield-tested scalability advantage.

4. A private StarkNet instance (also referred to as L4 in this case) that provides private transaction services, and these transactions do not need to be included in public StarkNets.

Components of the L3 solution

Figure 2 describes the typical infrastructure of L2, including the following components:

1. A smart contract that tracks the L2 state root on L1 (for example, the StarkNet smart contract on Ethereum).

2. In an L2 based on validity proof, a validator smart contract is required to verify the validity of the state transition proof.

3. The bridge agreement on L1 is used to manage the deposit and withdrawal transactions on L2.

4. The token contract on L2 corresponds to the L1 token contract (such as some ERC20 and ERC 721 token contracts).

Expansion in different forms: from L2 to L3

Figure 2: The composition of L2

Figure 3 describes the relationship between L3 and its underlying L2/L1. By implementing state tracking and verifier smart contracts on L2, L3 can safely run on L2.

Expansion in different forms: from L2 to L3

Figure 3: The composition of L3

Summary and thanks

L3 can bring ultra-high scalability, better manage various demanded technology stacks, realize private transactions, etc., while maintaining the security provided by Ethereum (L1). The recursive concept it uses can be extended to additional layers of fractal multi-layer solutions.

StarkEx, currently running as an L2 solution, will migrate to L3. In addition, an instance of StarkNet will be available to users as L3.

Thanks to Polynya and Alex Connolly (Immutable) for their comments and proofreading of this article. Special thanks to Pierre Duperrin (Sorare) for his valuable insights.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/expansion-in-different-forms-from-l2-to-l3/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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