Ethereum and layer 2 dossier.

A blockchain that wants to process more transactions per second itself usually has to raise the requirements for nodes: more computing power, more storage, faster network connections. That pushes smaller participants out of the network and concentrates control among a limited number of large parties, which over time undermines censorship resistance and decentralisation.

Ethereum therefore chose a layered approach: the base layer deliberately keeps throughput limited so it remains runnable on relatively modest hardware, while specialised layer 2 networks take over actual transaction processing. That separates the problem of security and decentralisation from the problem of throughput.

This choice is not without criticism. Critics point out that user experience becomes fragmented across dozens of networks with their own liquidity, bridges and risks. Supporters see that as a temporary growing pain that will be solved by better interoperability standards.

A rollup executes transactions outside the Ethereum base layer but publishes the data and a proof of correctness back to Ethereum. That means the rollup inherits the base layer's security without every transaction needing to be individually recomputed by all Ethereum nodes.

Optimistic rollups assume by default that submitted transactions are correct and give participants a challenge period to prove fraud. Zero-knowledge rollups instead provide a cryptographic proof that the outcome is correct, enabling faster settlement but requiring more complex engineering.

Both families have by now produced large networks with their own user bases and applications, from trading platforms to payment apps. The expectation within the developer community is that zero-knowledge technology will eventually dominate, since it requires no waiting period for withdrawals.

The Dencun upgrade of March 2024 added a new data type called blobs, specifically designed for rollups to post their transaction data on Ethereum more cheaply. Before that upgrade, rollups paid for expensive permanent storage space, even though they only need temporary data availability to be able to prove fraud or incorrect computation.

The effect was immediately measurable: transaction fees on major rollups fell by tens of percent to well over ninety percent compared with the period before. That made small, everyday transactions on layer 2 structurally affordable for a broad audience for the first time.

The Pectra upgrade of May 2025 built on this with an increase in the number of blobs per block and improvements to account abstraction, letting wallets handle transaction fees and security more flexibly. Validators also gained more room to stake larger amounts without needing to run multiple validator instances.

The ultimate goal is called full danksharding: a design in which individual nodes only need to check small pieces of data availability through sampling, while the network as a whole still guarantees that all data is available. That should multiply capacity for rollups without increasing the requirements placed on individual nodes.

This route is being rolled out in phases, with intermediate steps that gradually raise the number of blobs while developers monitor network stability. Core developers emphasise that each step is only taken once testnets and audits give sufficient confidence.

Moving value between Ethereum and the various layer 2 networks requires bridges. Some bridges are operated by the rollup itself and are relatively trusted, while other independent bridges are offered by third parties and carry an additional layer of security risk of their own.

Bridges have historically proven to be among the most vulnerable parts of the broader Ethereum ecosystem, with several major hacks in previous years. Users are therefore advised to use bridges recommended by the rollup itself and to split large amounts rather than moving them all at once.

For ordinary users, the layer 2 strategy mainly translates into lower costs and faster settlement for everyday applications, while the base layer is reserved for transactions that require the highest degree of certainty, such as large transfers or settlement of the rollup proofs themselves.

For developers it means that choice of network has become a strategic trade-off between cost, speed, security level and the size of the existing user community on a specific rollup. That fragmentation is partly addressed by cross-chain messaging standards, though this remains an area where the ecosystem is still very much developing.