Layer-3 protocols will revolutionize the ETH blockchain

• Ethereum co-founder Vitalik Buterin believes that layer 3 will be very important in the future, and shares three visions about the use cases.

• It can play a big role in referencing privacy based applications that will make use of zk proof to submit privacy.

Ethereum’s co-founder Vitalik Buterin has in a recent mail observed that the concept of layer 3 is usually in the layer 2 scaling discussions. In short, Buterin stated that the layer 2 solution is much more focused on hyperscale in the network. However, layer 3 will provide custom functionality. According to him, consideration of layer 3 is very important because it plays different functions than layer 2.

A three-tier scaling architecture that consists of stacking the same scaling scheme on top of itself generally does not work well. Rollups on top of rollups, where the two layers of rollups use the same technology, certainly do not. However, a three-layer architecture where the second layer and the third layer have different purposes can work.

Buterin believes that layer 3 will be very important in the future, and shares three visions about the use cases. It can play a big role in referencing privacy based applications that will make use of zk proof to submit privacy. This he described as “Custom functionality.”

In addition, custom scaling for specialized applications that do not want to use the Ethereum Virtual Machine (EVM) for computation will be another use case for layer 3 in the future. It can also be used for a zk-safe technology, a “weak reliable” scaling through Validiums. According to him, they could be important for “enterprise blockchain” applications. This is by using “a centralized server that runs a validity checker and regularly commits hashes to chain.”

Cross-chain transactions can easily be performed between two Layer 2s – Ethereum’s co-founder

However, it is unclear whether the layer 3 structure will be more efficient than the layer 2 models.

A possible argument for the three-tier model over the two-tier model is: a three-tier model allows an entire sub-ecosystem to exist within a single rollup, allowing cross-domain operations within that ecosystem to happen very cheaply, without having to go through the expensive layer 1.

Buterin also mentioned that cross-chain transactions can be done easily and cheaply between two Layer 2s committed to the same chain. However, creating layer 3s does not necessarily make the network more efficient. It is important to note that StarkWare’s newly produced recursive proof of validity is no longer concerned with Ethereum’s scalability. Declan Fox, the product manager at Ethereum software firm ConsenSys, also believes that it is theoretically possible to scale infinitely with recursive roll-ups and proofs.

StarkWare co-founder Eli-Ben Sasson has revealed that 600,000 Non-Fungible Tokens (NFTs) in a single transaction on Immutable X have been rolled up by its recursive proof.

The implementation is expected to increase demand for ETH to overcome selling pressure in the market. This, coupled with its major upgrade, could see the asset maintain a price point of around $4,000 by the end of the year.