Vitalik challenges Ethereum L2s to achieve full decentralisation

Ethereum (CRYPTO:ETH) co-founder Vitalik Buterin has set a challenge for all Ethereum layer 2 networks: achieve "Stage 1" decentralisation by the end of 2024, or risk no longer being considered true layer 2 solutions.

On September 12, Buterin emphasised that “the era of rollups being glorified multisigs is coming to an end,” highlighting the need for more secure, cryptographic trust models instead of centralised control.

In the Ethereum ecosystem, a network's classification as a layer 2 is significant.

It determines whether the network relies on Ethereum's security framework to safeguard users' funds or operates independently with its own security risks.

This issue became prominent when the decentralised finance protocol Velocore, built on the Linea network, was exploited for $2.6 million.

Following the attack, Linea halted block production to prevent further losses, prompting criticism that it did not fully depend on Ethereum’s security.

Buterin first introduced the concept of "Stage 1" decentralisation in November 2022, explaining that layer 2 networks were in early development stages and required time to fully decentralise.

A Stage 0 network posts compressed transaction data to Ethereum and provides a single node to confirm the network’s state.

In contrast, a Stage 1 network employs a fraud-proof or validity-proof system in its smart contract on Ethereum, ensuring developers cannot manipulate state roots or block withdrawals without repercussions.

Security Councils or similar governance mechanisms are also present to manage bugs or emergencies.

Since Buterin's post, most networks that have promoted themselves as layer 2 solutions remain at Stage 0, raising concerns about the lack of progress toward full decentralisation.

However, six networks, including Arbitrum One, Optimism, dYdX v3, and ZKsync Lite, have reached Stage 1.

These networks use systems like fraud proofs and forced withdrawal mechanisms to ensure security and decentralisation, even in extreme situations.

Other networks, such as Base, Blast, ZKsync Era, and Starknet, have yet to achieve Stage 1, meeting some Stage 0 criteria but still working on the additional requirements for full decentralisation.

As the 2024 deadline nears, the Ethereum community will be closely monitoring which networks successfully meet the criteria for Stage 1 decentralisation.

At the time of reporting, the Ethereum (ETH) price was $2,324.83.