Solana community individuals comprise prolonged criticized Ethereum’s modular methodology in the consume of layer 2 networks to enable extra transactions, arguing these L2s reach at the expense of Ethereum itself. On the replacement hand, this past week, those in the Solana camp seem like gearing as much as embody modularity—despite the truth that they received’t consume the same terminology.

After prolonged having mocked Ethereum’s modular constructing, wherein scaling of the blockchain happens by delegating some capabilities to fully different chains that join to the distinctive one, some Solana community individuals comprise opted to name L2 technologies on Solana “community extensions,” igniting controversy and derision, seriously amongst Ethereum proponents.

On Monday, Solana’s co-founder Anatoly Yakovenko mentioned on X that “[L2s] are parasitic after they grab extra precedence [transactions] from the execrable layer than they add.” On the same day, Kyle Samani, the managing accomplice of Multicoin Capital wrote,  “Anything else that doesn’t happen on L1 that can’ve came about on L1 is by definition parasitic.” The argument of whether or now not L2s are “parasitic” boils down to an L2’s feature having way-complete overlap with the L1 by virtue of running the same capabilities because the L1, while at the same time taking earnings and customers from the L1 itself.

Yakovenko added, “If the Solana ecosystem had been to cripple L1 execution optimizations in desire of ‘ARB/OP’ frequent purpose L2 stack to tackle all of the user [transactions], it would possibly perhaps perhaps be parasitic to Solana’s mainnet.”

Normally, layer 2 networks confer with auxiliary blockchains built on Ethereum’s execrable layer geared in opposition to making transactions sooner and fewer pricey, while declaring the roughly same level of security. In pragmatic phrases, if a user wished to be on an L2, they’d click on several buttons to bridge their property from Ethereum’s execrable layer and into an L2.

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Solana supporters calling Ethereum’s L2s “parasitic” incited several of us to debate definitions and show conceal that Solana additionally has L2s. For instance, Ethereum investor Ryan Berckmans mentioned on Tuesday, “No one denies that L2s are literally competitive with the L1.”

“What we don’t enjoy is the intentional emotional conjugation of the discover ‘parasitic’ to point out that Eth’s L2 model sucks. L2s are symbiotic and complementary with the L1,” Berckmans great.

Two examples of Solana L2s encompass Zeta and Code. Zeta, a crypto perpetual change built on Solana, has branded itself a “Trustless Layer 2 for Decentralized Derivatives Trading,” per its documentation which additionally refers back to the mission as an “optimistic rollup on Solana.” “Rollups” are passe synonymously with “L2s.”

Ted Livingston, the founder and CEO of Solana-based payments platform Code, additionally described his mission as an L2, announcing on X in Feb. 2024, “The Code L2 does a lot of issues, however one in every of the issues it does is develop the skill to soundly queue up transactions even when Solana is down.”

In 2023, Multicoin Capital’s Samani conducted a pollon X that had 2,200 votes asking whether or now not L2s are parasitic to L1s, and in it, 60.1% of respondents voted “No,” while 22.8% voted “Yes,” with the last respondents vote casting correct to seem the results.

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‘Network Extensions,’ No longer L2s

The Solana Foundation’s head of approach Austin Federa chimed in, calling what of us withhold in mind to be L2s on Solana are in actuality “community extensions.”

“Loads of the L2-ish issues on Solana are better opinion of as Network Extensions. Whereas the underlying tech stack would possibly perhaps perhaps well resemble Bitcoin or Ethereum L2s, the feature and role is so radically completely different I believe founders would most productive be served by Network Extensions,” mentioned Federa on Monday.

Slash White, the manager operating officer at Celestia, known as out Federa for making an strive to name layer 2s on Solana by a completely different title. “Monoliths are capitulating to modular… Now they comprise to reach abet up with fresh phrases for all the pieces, so rollups = “community extensions.” It’s adorable,” mentioned White.

Are Network Extensions In actuality Varied From L2s?

On X, Federa further outlined, “Network Extensions extend the Solana community to fresh areas, or remark fresh execution atmosphere, in actuality expert processing, etc to the Solana community.” Barely than a frequent-purpose layer 2 blockchain community that has the same fabricate as its execrable layer, community extensions are in actuality expert to tackle a lot of issues enjoy privacy or sooner signature verification, per Federa.

No longer even all Solana supporters had been sold on the terminology. Whereas Livingston agrees that the phrase “Network Extensions” is a higher title than an “L2,” given sure technical aspects, he isn’t “sure that the technical branding matters that much.”

In a an identical vein, Mert Mumtaz, the CEO of Solana-based developer firm Helius, doesn’t believe in relating to “Solana L2s” as “community extensions,” including that “someone who spends many of of hours strawmanning semantics from 2 of us as another of transport something of us desire is a primarily unserious particular person.”

“Usually community extensions are L2s however L2s usually are now not community extensions. It’s a rectangle and a sq., one definition fits the completely different. Shall we now not agree there both however that’s how I’m seeing it,” mentioned @AyyyeAndy on X, the host of The Rollup podcast.

The bigger type is that the modular thought is winning, per @AyyyeAndy who mentioned, “Folks realize they can’t defy physics and scaling a single-remark machine for *the world’s inhabitants* is most unlikely. We can fight on semantics all day however the actuality is where we’re headed, every high TPS L1 will seemingly be confronted with the seek data from of centralizing extra by increasing hardware requirements for nodes or scaling with rollups.”

L2s Eating Into Market Piece of Ethereum L1

As for whether or now not L2s comprise been “parasitic” to Ethereum, charges and onchain yell on its execrable layer declined after the Dencun upgrade in March, which elevated the scalability properties of Ethereum’s layer 2s.

Within the week sooner than the completion of the Dencun upgrade, Ethereum accumulated roughly $30 million in charges daily, per blockchain analytics firm Token Terminal. On Monday, Token Terminal great, “Ethereum L1 earnings is down Ninety nine% up to now 6 months.”

Also, sooner than the Dencun upgrade, decentralized exchanges on Ethereum’s execrable layer had been accountable for roughly 50% to 65% of the entire Ethereum ecosystem DEX trading quantity, per onchain data supplier Artemis. Ethereum L1’s piece of the entire has since dropped to 46%, because the quantity on L2s similar to Coinbase’s incubated community Deplorable, has considered an elevate in its market piece.

The trading quantity of decentralized exchanges on L2s has grown, while Ethereum’s execrable layer has considered a fall in its DEX trading quantity. (Artemis)
The trading quantity of decentralized exchanges on L2s has grown, while Ethereum’s execrable layer has considered a fall in its DEX trading quantity. (Artemis)