Co‑founder of the EVM‑compatible blockDAG Layer 1 platform Taraxa, Steven Pu published a post on a social media platform X, claiming that Layer 2 networks are undermining the core principles of cryptocurrency, specifically its decentralized and trustless nature.
Steven Pu stated that a decentralized network performs three fundamental functions: determining which transactions are included in a block, establishing how transactions are ordered within a block and how blocks themselves are sequenced, and ensuring that transactions are executed correctly. He argued that Layer 2 solutions provide no guarantees for transaction inclusion or ordering, as these decisions are based on pending transactions in mempools, which are not recorded on‑chain. This means that any errors or dishonest behavior in inclusion or ordering cannot be detected or contested. Furthermore, he claimed that because Layer 2 systems operate through centralized sequencers, there is effectively no assurance in these areas.
The Taraxa co‑founder also asserted that without reliable guarantees on inclusion and ordering—both of which precede execution—any assurances on execution itself are meaningless, likening it to “garbage in, garbage out.” He further contended that in the case of optimistic rollups, execution is only weakly secured, relying on what he described as an impractical seven‑day challenge period. He warned that if a single transaction error affecting thousands of subsequent transactions were successfully challenged after such a delay, it would cause disruption.
In Steven Pu’s view, attempts to “decentralize” Layer 2 networks by introducing a truly decentralized network of sequencers would effectively convert them into Layer 1 networks. He suggested that those arguing otherwise are essentially acknowledging that Layer 2 systems would eventually evolve into Layer 1 platforms, potentially replacing the very Layer 1 they were designed to scale.
“L2s are fundamentally centralized; transactions on L2s have no inclusion or ordering guarantees, and often—such as in the case of optimistic rollups—not even execution correctness or fairness assurances,” Steven Pu told Mpost. “The only way to build a decentralized network is the way L1s are built. So for L2s to become decentralized, they would need to become L1s, which defeats the whole purpose of having L2s in the first place,” he added.
Ethereum Scalability Should Focus On Layer 1 Improvements Over Centralized Layer 2 Solutions, Says Steven Pu
Steven Pu further argued that the correct path to scalability for Ethereum is to improve the scalability of the Ethereum mainnet itself, noting that numerous next‑generation Layer 1 consensus models already exist and could serve as references. While recognizing that Ethereum developers may be cautious due to the network’s total value locked approaching $100 billion, he urged them to shift focus toward enhancing the Ethereum Layer 1 directly and to move away from what he described as parasitic, centralized Layer 2 solutions.
When asked by Mpost asked about the most viable methods for scaling Ethereum at the Layer 1 level without undermining its security and decentralization, and how these methods measure up against the Layer 2 strategies currently in use, he outlined his perspective in detail:
“There are many next‑generation architectures that have already been on mainnet for years and could help improve Ethereum’s performance. For example, the blockDAG architecture can be used to scale Ethereum’s throughput by hundreds of times without sacrificing any security or decentralization guarantees — this is already implemented in the form of Taraxa. In addition, Ethereum could adopt state sharding, creating sub‑networks for different applications with fast bridging between them for occasional cross‑shard settlements, reducing the need for every application to operate on a single shard,” Steven Pu explained to Mpost.
“These two approaches, along with many other possibilities, can deliver scalability without compromising decentralization or security guarantees, unlike today’s L2s,” he added.
Continued Layer 2 Adoption Could Undermine Ethereum’s Decentralization And Long‑Term Viability
In remarks to Mpost, Steven Pu also addressed the question of what potential long‑term consequences might arise for Ethereum’s ecosystem, user confidence, and the overarching vision of a trustless blockchain infrastructure if the adoption of Layer 2 solutions continues to follow its current trajectory. He elaborated on his perspective, outlining the implications such a path could have on the network’s foundational principles and future development.
According to his assessment, Layer 2 solutions are likely to persist in diverting attention, liquidity, and practical applications away from Ethereum and other genuinely decentralized Layer 1 networks, a trend he believes could ultimately erode the fundamental principles upon which the cryptocurrency ecosystem is built.
“These platforms become centralized entities that are subject to the control of a small development team, can be readily targeted by malicious actors, and can be easily censored by governments — essentially replicating the kind of centralized infrastructure that existed before the advent of cryptocurrency,” he said.
“Alternatively, L2s may choose to decentralize and effectively transform into L1s themselves, in which case they would supplant Ethereum, as there is no need for a separate L1 when operating one independently. Either way, the current trajectory of L2s poses risks to the broader crypto ecosystem, and particularly to Ethereum,” he concluded.
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