As builders of L1/L2 solutions, it's imperative to stay abreast of the current technological landscape and make appropriate adaptations. What's even more challenging is making long-term decisions amidst these adaptations. Originally intended to foster internal discussions on our new technical roadmap/direction, this article aims to assist fellow L1/L2 builders in navigating their technical directions in a landscape teeming with infrastructure builders.

The goal here is to offer practical frameworks regarding the current competitive infrastructure tech landscape, especially the 'monolithic/modular approach'. By delving into and researching these ascpects, you can lay a solid foundation for your technological decisions. This will be particularly valuable when other builders inquire, "Why not ETH L2?" or "Why your Layer 1?"

Before delving further, I recommend reviewing Vitalik’s article.

Whether it's Layer 1, Layer 2, or another blockchain protocol, the technical objective remains predefined: to provide cheap, fast, and (increasingly) composable yet decentralized computation for users and developers. It's been a decade since Ethereum was founded, and we now know that users value these attributes.

• Cheap refers to high bandwidth (=low gas fees).

• Fast implies quick finality.

• Composability means easy interaction with other contracts.

• Decentralization, though nuanced, can roughly be measured by the number of validators and full nodes (Note: decentralized 'governance' is also crucial but is beyond the scope of this article).

From a purely technical perspective, the ultimate metric for each blockchain infrastructure should be this: maximizing decentralization(and composability) while minimizing gas fees and time to finality.

Multiple approaches exist to achieve these objectives, primarily revolving around modular and monolithic perspectives. As Vitalik discussed in his endgame article, the ultimate aim for these approaches would be ‘block production is centralized, block validation is trustless and highly decentralized, and censorship is still prevented’. Embracing this vision is pivotal. While numerous resources expound on these concepts, I'll underscore crucial topics necessitating attention.

In the mid-term, I believe several approaches (mainly two, modular and monolithic) can coexist. Especially, recent innovations in rollups regarding a shared decentralized sequencer (aiming for rapid finality, composability, and decentralization provided by L1s) are somewhat concerning for L1 builders. By having deep discussions that address several aspects of blockchain technology, you can develop your own robust thesis, as I mentioned earlier in this article. Below are some aspects you may consider.

1. Cost of Running a Network (this will be a basis for pricing gas fees)

   1. Maintaining decentralized sequencers who generate ZK proofs vs. a set of L1 validators

      1. Multiple sequencers = Computation cost (ZK proof generating + execution) + Data Availability (DA) layer cost + Settlement layer cost (e.g., Ethereum)

      2. Caveats:

         1. Current status (cost) is not crucial; the declining cost ‘trend’ and forecasting its technical limitation are important

         2. Optimistic rollup’s operation cost is extremely lower than L1s, but since this is a known factor and industry is going toward to implement ZKs so it’s more worthwhile to research them.

         3. Keep in mind that alt L1’s economic security is not the same as a rollup that submits a validity proof to ETH (equivalent to ETH) - and providing a few billion in economic security is regarded as ineffective. If the gas cost and finality are similar between an alt L1 and an ETH L2, the ETH L2 would be considered a far better solution.

2. Performance

   1. L2 max performance vs. L1 max performance

      1. L2: Depends on the DA layer + load from a shared sequencer network vs. L1’s various loads (consensus, storage, etc.)

      2. Generally, this is where monolithic have strong advantages over modular.

      3. Caveat:

         1. Perhaps in the L2 space, one chain’s max scalability isn't as crucial if the composability issue is resolved among rollup chains via a shared sequencer, since each large app will have its own app-rollup, e.g., using various apps within the OP Stack ecosystem.

3. Usability (finality, composability)

   1. Composable ecosystem of rollups vs. a single composable L1

      1. L1s do not prioritize composability between other chains, but rollups with a shared sequencer might enable synchronous composability later on. It's important to explore recent innovations in this area.

      2. Near is trying to do ‘chain abstraction’ this would make them an unique L1 that can be used to try dApps on other L1s.

   2. Finality: Hard finality vs. Soft finality

      1. Currently, on hard finality, L1s are far ahead, but rollups are catching up by offering 'soft finality' through decentralized sequencers. Researching their progress and feasibility is crucial.

   3. Others

      1. ZK-sign in, AA, etc.

4. Decentralization

   1. As mentioned in the cost section, decentralization is costly as it requires significant investment (e.g., inflating to 1,000 validators). You should note that borrowing ETH’s economic security via ZK proof is becoming cheaper.

   2. The level of decentralization should be determined based on the sector/apps you support. For a social app, a lower level of decentralization might be sufficient.

5. Technical Focus: All mentioned aspects are general aspects of L1s and L2s. However, since you cannot excel in everything, you might optimize/trade-off some properties by focusing on specific sectors/technologies, etc. This should be discussed in conjunction with your business strategy. Here are some examples:

   • Sector-specific: Refer to the ‘transaction quality trilemma’. For DeFi, a $0.001 gas fee is acceptable, but not for a social network.

   • Technology-specific: Execution, Data, Consensus, Chain abstraction, UX(AA) etc.

   • Vertically integrated chain (e.g., Immutable) vs. ‘Platform’ (e.g., Solana)

1. Technological innovations in core technology (whether it’s Layer 1, Layer 2, execution layer, DA layer, etc.) are mainly driven by very few projects, and it's very challenging for ‘outsiders’ to market yourselves as 'state-of-the-art' tech blockchain.

2. Choosing your technical (or business) ‘alliance’ may be more crucial than internalizing great technology for now.

3. Technology is often used as a narrative-building/marketing tool, and it's important to remember that it's very powerful in Web3, because often the narrative, not the tech, attracts developers and users.

4. Community culture should come first, technical innovation second. Technology needs to fit your community’s cultural values. See The Network State.