• Rollups, a Layer-2 based scaling solution, will be the new primary focus for Ethereum 2.0.
  
• Phase 1 of Ethereum 2.0 will enable 100,000 transactions per second (TPS).

In a recent post on Ethereum Magicians, Vitalik Buterin has issued a new scaling strategy for Ethereum (ETH) and stated that ETH 2.0 will focus on rollups, plasma and state channel. As Buterin stated, there are already numerous layer 2 solutions that are either about to be launched (Optimism, Fuel, Arbitrum and OMG Network) or are already activated in Ethereum’s mainnet (Loopring, Zksync and Deversifi) and can provide the currently still acutely needed scaling for DeFi applications.

On the other hand, according to Buterin, the scalability of the base layer will come “only as the last major phase of eth2”, “which is still years away”. Despite the imminent launch of Ethereum 2.0, rollups, plasma and state channels will therefore have to be the predominant means of scaling. According to the inventor of Ethereum, there is “no other choice”, at least in the short term. This, layer-1 (L1) is “nearly unusable for many classes of applications, and there’s no non-L2 path that can get us to scalability in the short-to-medium term”.

As Buterin pointed out, the usability of Ethereum 2.0 as a data availability layer for rollups will reach phase 1 long before ETH 2.0 will be usable for “traditional” layer 1 applications. This fact leads Buterin to conclude that the Ethereum ecosystem “is likely to be all-in on rollups (plus some plasma and channels) as a scaling strategy for the near and mid-term future”.

In the short term, this means that the Ethereum ecosystem will have to adapt to rollups. According to Buterin, user accounts, ENS names, applications and much more that currently “lives” on Layer-1 (L1) will have to migrate to Layer-2 (L2).

We would need to adapt to a world where users have their primary accounts, balances, assets, etc entirely inside an L2 […] We ideally want to make L2s part of the wallet itself (metamask, status, etc) so that we can keep the current trust model. This support should be standardized, so that an application that supports zksync payments would immediately support zksync-inside-Metamask, zksync-inside-Status, etc.

In the long term, Buterin says, this could also imply a reorientation of the future of Ethereum 2.0. Within this framework, the base layer (L1) could focus on consensus, data availability and security, while scaling would be fully operated by L2,as Buterin added:

It seems very plausible to me that when phase 2 finally comes, essentially no one will care about it. Everyone will have already adapted to a rollup-centric world whether we like it or not, and by that point it will be easier to continue down that path than to try to bring everyone back to the base chain for no clear benefit and a 20-100x reduction in scalability.

L1 could focus on “staggering block times on different shards, so that at any time there will always be some shard scheduled to propose a block within a few hundred milliseconds.”. In this way, rollups operating across multiple shards could have “ultra-low latency without the risk of the blockchain itself having ultra-low latency”.

Ultimately, Ethereum 2.0 could achieve the following transaction throughput with this approach, as Vitalik Buterin said:

Today, Ethereum has ~15 TPS. If everyone moves to rollups, we will soon have ~3000 TPS. Once phase 1 comes along and rollups move to eth2 sharded chains for their data storage, we go up to a theoretical max of ~100000 TPS. Eventually, phase 2 will come along, bringing eth2 sharded chains with native computations, which give us… ~1000-5000 TPS.

Meanwhile, Buterin was also positive that “a lot of the work will be done by the major DeFi projects, who have a large incentive to economize on fees and to make sure that their systems continue to be easy to use”. According to Buterin, these “highly motivated early adopters” have to be supported in their work.

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