PACE-Layered Strategy for Scaling Enterprise Ethereum: Lessons from Microsoft’s MarTech Stack

Introduction

Enterprise adoption of Ethereum is at a pivotal moment. As organizations explore blockchain for applications ranging from supply chain tracking to digital assets, they face a fundamental challenge: how to scale without compromising security and autonomy. This article applies Gartner’s PACE Layered Application Strategy, a proven framework in Web2 enterprise IT, to Ethereum adoption. Drawing from my experience designing Microsoft’s award-winning MarTech Stack, we will explore how enterprises can strategically integrate Ethereum, why Layer 2 (L2) solutions are critical, and how Facet’s trust-minimized architecture uniquely solves the problem of admin key dependencies.

The Enterprise Ethereum Challenge

Adopting Ethereum (or any blockchain) at enterprise scale is not as simple as spinning up a new SaaS tool. Enterprises face a unique set of challenges:

• Security & Trust – Many enterprise blockchain implementations introduce centralized admin keys outside the control of the enterprise, creating vulnerabilities. The risk of forced shutdowns due to a compromised multisig or regulatory pressure is a serious concern.
• Scalability & Cost – Ethereum Layer 1 (L1) is too slow and expensive for mass adoption. L2 rollups help, but governance models introduce trade-offs.
• Control vs. Decentralization – Enterprises need predictable governance but must avoid vendor dependencies that undermine blockchain’s fundamental benefits.
• Integration with Legacy Systems – Blockchain must coexist with ERPs, CRMs, and compliance tools without adding unnecessary complexity.

These challenges mean enterprises must be strategic in how they adopt Ethereum. It’s not just a question of whether to use a blockchain, but where and how to apply it within the IT landscape. This is where Gartner’s PACE Layered Application Strategy (often just “pace layering”) becomes incredibly useful. PACE is a framework for categorizing enterprise applications by their rate of change and business criticality. By applying the model to Ethereum initiatives, enterprises can balance the need for innovation with the need for stability and governance.

Before diving into Ethereum specifics, let’s briefly recap the PACE framework and how it guided a complex technology stack at Microsoft.

Lessons from Web2: Gartner’s PACE Layered Application Strategy

In traditional enterprise IT, not all systems are equal – some are rock-solid foundations, while others must adapt quickly to new opportunities. Gartner’s PACE layering formalizes this by dividing applications into three categories or “layers” based on their purpose and rate of change:

1. Systems of Record: These are core systems that support fundamental, well-defined business processes (often common across industries) – for example, financial ledgers, HR databases, customer master records. They are characterized by a low rate of change. Stability, data integrity, and compliance are paramount. Changes are infrequent and must be carefully controlled (think years-long lifecycles). Many legacy ERP or CRM modules fall here.
2. Systems of Differentiation: These applications enable unique company processes or capabilities that provide competitive advantage. They need to adapt more frequently (on the order of 1-3 years lifecycle) because business practices or customer needs evolve. They often involve custom or configurable solutions – for instance, a customized customer experience platform or an industry-specific supply chain system. The idea is that each enterprise’s differentiation systems are somewhat unique, so you expect to update or tweak them to stay ahead, but they still need reasonably stable integrations with the core.
3. Systems of Innovation: These are ad-hoc or experimental applications built to address new opportunities or emerging requirements (often with new technologies). They have short lifecycles (0-12 months) and are often built with agility in mind – using rapid development, departmental budgets, and sometimes consumer-grade or open-source tech. They’re essentially pilot projects or prototypes that, if successful, might graduate into systems of differentiation (or be discarded if they fail). This is where an enterprise “plays” with new ideas at relatively low risk to the broader operations.

The value of PACE layering is in governance and resource allocation. By identifying which bucket an initiative falls into, an enterprise can apply the right governance approach and investment: e.g., don’t apply waterfall methodology and five-nines uptime requirements to an innovation experiment; conversely, don’t treat your core finance ledger like a hackathon project. Gartner’s approach allows organizations to embrace innovation without compromising the stability of core operations.

Microsoft’s Marketing Tech Stack example: In the world of Web2, a great demonstration of PACE layering in action was the design of Microsoft’s global marketing technology stack. In collaboration with Todd Wells (VP/GM Marketing IT), we conceptualized Microsoft’s MarTech stack through this framework, which earned industry recognition in the 2017 "Stackie Awards." The strategy explicitly separated the stack into the three PACE layers for governance: systems of record, differentiation, and innovation. This allowed Microsoft to balance stability with agility – stable core customer data platforms and compliance tools were managed for reliability, while unique marketing apps and experimental customer engagement tools were managed for rapid iteration. According to Microsoft’s marketing IT leaders, this pace-layered approach made their heterogeneous set of tools (from Adobe, Marketo, Salesforce, and in-house solutions) work in a cohesive architecture, orchestrated according to each component’s role and change cadence.

The lesson here is powerful: Adopt new technology in layers, not all at once. Manage each layer by different rules appropriate to its stability or innovation needs. We can bring this same discipline to Web3 adoption.

Applying PACE Layers to Enterprise Ethereum Adoption

When an enterprise sets out to leverage Ethereum, it shouldn’t treat the whole blockchain initiative as one monolithic project. Instead, apply the PACE framework to categorize different aspects of the Ethereum adoption strategy. This helps decide which blockchain components must be rock-solid and which can be more experimental. Below, we'll map the PACE layers to Web3.

Systems of Record – Ethereum as a Source of Truth

For enterprises, a system of record serves as the ultimate source of truth for critical data. Ethereum mainnet fulfills this role in multi-organization contexts, ensuring tamper-proof, decentralized consensus for supply chain events, asset registries, identity credentials, and inter-company transactions.

Ethereum L1 is highly stable—protocol changes are rare, extensively tested, and secured by a massive validator network. Like traditional enterprise ledgers, it prioritizes data integrity and reliability over speed, making it ideal for immutable records.

However, enterprises must avoid introducing centralized failure points when leveraging Ethereum. A common pitfall is deploying smart contracts with admin key controls, allowing a single entity to alter or revoke records—undermining blockchain’s trustless security. As we’ll see later, solutions like Facet aim to remove such pitfalls by eliminating admin keys entirely at the infrastructure level.

The takeaway: Use Ethereum mainnet for shared truth, not dynamic operations. Treat it like a mission-critical database, where changes are rare and heavily audited.

Systems of Differentiation – Custom Layer 2 Platforms and Smart Contracts

If Ethereum mainnet is the foundation, Layer 2 (L2) solutions and smart contracts form the differentiation layer—where enterprises build unique capabilities. These leverage Ethereum’s security while allowing custom logic, performance enhancements, and integrations that evolve with business needs.

A prime example is Sony’s Soneium L2, built on Optimism’s OP Stack. Designed to support NFT fan engagement and digital content, Soneium required high throughput, low fees, and deep integration with Sony’s ecosystem—capabilities Ethereum L1 or existing L2s couldn’t fully provide. This “rollup-as-a-service” approach is gaining traction, much like enterprises customizing off-the-shelf software to gain a competitive edge.

However, differentiation comes with governance trade-offs. Sony retained admin control, enabling blacklisting of addresses for IP enforcement, which led to backlash as frozen accounts were discovered at launch. Critics saw this as centralized rug-pulling, while Sony defended it as necessary compliance.

This raises a key question: How much control should enterprises retain over their L2s? Vitalik Buterin noted that enterprise chains can choose any governance model, but that choice must be explicit, and users must have access to tools "to understand the properties of the onchain environments they are spending their time in." Sony prioritized compliance over decentralization, but the controversy highlights the risk of excessive control in blockchain projects.

For enterprise L2s and dApps, governance is as critical as technology. These systems must evolve, so enterprises need clear, trust-building governance models—whether through multi-party control, community-driven upgrades, or decentralized governance frameworks. Later, we’ll explore how solutions like Facet remove admin keys entirely, solving this challenge while maintaining flexibility.

Systems of Innovation – Web3 Experiments and Pilots

This top layer allows enterprises to experiment with cutting-edge Web3 ideas through short-term pilots and proofs of concept before scaling.

• Pilot Projects – A retailer might test an NFT-based loyalty program on a testnet, or a manufacturing consortium could trial supply chain tracking on a permissioned Ethereum instance.
• Emerging Tech – Enterprises can explore zero-knowledge proofs (ZKPs) for privacy, decentralized identity (DID) systems, or DAO-like structures for governance.
• Web2 Integration – Companies are experimenting with blockchain-IoT combinations for supply chain tracking or AI models leveraging Ethereum-based data marketplaces.

These initiatives typically use public testnets (Goerli, Sepolia), private chains, or lightweight L2s—focusing on speed and learning, not scale. Failed experiments can be discarded, while successful ones transition into differentiation-layer solutions.

Enterprises should encourage a portfolio of blockchain experiments while keeping them isolated from core operations to avoid disruption. However, successful pilots should connect to broader strategy, ensuring innovations don’t exist in a vacuum but feed into scalable enterprise solutions.

In summary, enterprises should align Ethereum adoption with the PACE framework:

• Systems of Record – Highly secure, immutable, and rarely changed.
• Systems of Differentiation – Agile, business-specific solutions with clear governance.
• Systems of Innovation – Fast-moving, experimental, and sandboxed.

This structured approach prevents enterprises from moving too slowly (overly cautious, stifling innovation) or too recklessly (deploying untested smart contracts at scale).

Next, we’ll explore Layer 2 rollups, which are central to differentiation-layer scaling for enterprise Ethereum adoption.

Scaling and Layer 2: The Role of Rollups in Enterprise Ethereum

Ethereum prioritizes decentralization and security over speed, making Layer 2 (L2) rollups essential for enterprise adoption. Rollups execute transactions off-chain, posting summarized data or proofs back to Ethereum L1, scaling throughput while inheriting Ethereum’s security. For enterprises aiming to use Ethereum, rollups are not just a nice-to-have; they are essential. Here’s why:

• Throughput & Cost – Rollups based on Optimistic (Base, OP Mainnet) and Zero-Knowledge (StarkNet, zkSync) architectures dramatically increase transaction speed and reduce costs. Instead of 12 TPS on Ethereum L1, rollups can handle hundreds or thousands—unfeasible on mainnet due to cost and performance limits.
• User Experience – Near-instant confirmations and minimal fees bring blockchain interactions closer to Web2, a necessity for mainstream adoption.
• Customizability – Custom rollups, especially those built on open source frameworks, allow enterprises to tailor governance, gas fees, and integrations, much like configuring enterprise software.
• Risk Isolation – An enterprise rollup can contain failures without affecting Ethereum mainnet. Bugs or governance issues are limited to the L2, allowing fixes without requiring Ethereum-wide forks.

Given these advantages, L2s are becoming the enterprise default. Instead of launching standalone blockchains, companies leverage Ethereum’s L2 ecosystem for scalability and connectivity. Soneium (Sony), Base (Coinbase), Unichain (Uniswap), and other industry-specific rollups exemplify this trend.

However, rollups also introduce governance and security challenges—particularly admin key dependencies. Many rollups, despite claiming Ethereum-grade security, retain centralized control mechanisms that can halt the network, censor transactions, or be exploited by malicious actors—we’ll examine that next.

The Admin Key Conundrum

In traditional IT, enterprises expect administrator access—the ability to fix, upgrade, or shut down systems as needed. In blockchain, this contradicts the decentralization ethos, yet most rollups and smart contracts still include privileged admin roles.

The implications are serious:

• If an admin key is compromised—whether via hacking, insider collusion, or government coercion—an entire rollup could be halted or censored.
• Multisigs controlling L2 governance introduce central points of failure. Optimism’s security council (15 key holders) could theoretically pause or shut down their rollups.
• Enterprises must ask: Are you comfortable building on an L2 where a few unknown individuals (or even a competitor) could freeze the entire network?

Even if a company runs its own L2, retaining admin keys still creates a single point of failure. The key could be hacked, misused by an insider, or forced into compliance actions.

The only real solution? Eliminate admin keys entirely. For an enterprise, the idea of having no off switch might sound scary initially. But consider the value proposition: a blockchain platform where not even the administrators can betray the system’s integrity. This is the kind of assurance that could make Ethereum truly enterprise-ready for the most sensitive uses. It means if you deploy on such a platform, you don’t have to trust a vendor’s promise or a security council’s good behavior; the system’s architecture guarantees that no one can unilaterally shut you down or censor you. Ironically, that assurance may be exactly what risk-averse enterprises need to see.

Today, Facet is the only EVM-equivalent rollup that is impossible to shut off – a bold claim, but one that addresses the heart of enterprise concerns about control and reliability. Let’s dig into Facet specifically, as it embodies many of the principles we’ve been circling around: trust-minimization, public-good infrastructure, and bridging the gap between enterprise needs and Ethereum’s ideals.

Facet: A Public Good Approach to Enterprise Ethereum

Facet is a new Ethereum Layer 2 solution that has been explicitly engineered to tackle the “admin key problem” while providing the scalability and performance that enterprises demand. If we view it through our earlier lens, Facet operates at the differentiation layer (it’s a general-purpose, EVM-compatible rollup platform to build on) but with the stability and security more akin to a system of record.

Here are the key innovations and characteristics of Facet, and why they matter:

• No Admin Keys or Enshrined Privileged Contracts – Unlike most rollups, Facet removes privileged smart contracts entirely. In typical Optimism-based rollups, there’s an L1 “gateway” contract and others that can be upgraded by an admin. Facet eliminates these from day one. There is no upgradeable gateway contract that a Facet operator can exploit – effectively burning the boats so that neither hackers nor the Facet team itself could ever halt the chain. This guarantees Ethereum-level censorship resistance, even under regulatory or external pressure.
• Permissionless Sequencing - Most L2s rely on centralized sequencers that can censor transactions. Facet’s based sequencing model ensures transactions are natively included in Ethereum L1 blocks, preventing any entity from freezing or rejecting them.
• Proof-of-L1-Blockspace Issuance – Facet introduces Facet Compute Token (FCT), a native token issued based on Ethereum L1 block usage. This ensures economic alignment with Ethereum’s security model, incentivizing efficient gas usage while keeping the system decentralized.
• Truly Open & Public Infrastructure – Facet is not a corporate-controlled L2 but a public good, akin to Linux or the internet. Enterprises benefit from vendor neutrality, shared network effects, and permissionless access.
• Built for ‘Hard Times’ – Inspired by Vitalik’s concept of blockchain resilience, Facet ensures that even in worst-case scenarios (state censorship, sequencer failures, network disruptions), the rollup remains operational—unlike admin-controlled L2s, which can be shut down.

Facet provides enterprises with L1-level security and L2-level scalability—without introducing centralized risks or governance bottlenecks. Instead of launching their own L2s, enterprises can build on Facet and trust that no admin can intervene or modify the system.

Unlike other L2s, Facet’s governance is hardcoded into protocol rules, minimizing the need for human intervention. Upgrades happen only through community consensus and Ethereum-style opt-in deployments, ensuring neutrality and stability.

In many ways, Facet could be to Ethereum L2 what Linux was to enterprise servers: a reliable, community-driven platform that companies can adopt widely, knowing it’s hardened and not proprietary. And much like how enterprises eventually embraced open-source OSes and middleware because of their robustness and freedom, we may see a similar pattern with enterprise adoption of open, trust-minimized blockchains.

Governance and the Evolution of Ethereum Rollups

Facet’s model is part of a broader shift toward decentralized governance and stronger Ethereum alignment. Rollups are evolving beyond admin-controlled systems toward trust-minimized architectures, shaping enterprise adoption.

• Stage 3 Decentralization: Most rollups today are still in Stage 0 (rollup in name only) or Stage 1 (central admin). The industry is pushing toward Stage 2 (community-driven multisigs), and some have even theorized an eventual Stage 3 (fully on-chain governance, DAO-controlled upgrades). Enterprises may eventually participate in these governance models, influencing rollups they depend on—such as a supply chain rollup governed by industry stakeholders.
• Superchains and Interoperability: Optimism’s Superchain vision proposes multiple OP Stack-based rollups inter-operating under a shared framework. However, each chain having its own admin introduces multiple failure points. Emerging solutions like shared sequencers and Layer 3 constructions could reduce these risks while maintaining interoperability.
• Enshrined (Native) Rollups: The Ethereum Foundation is actively researching integrating rollups directly into Ethereum to remove reliance on external admin mechanisms. While still early, Ethereum researchers like Justin Drake and Vitalik Buterin have expressed support for this approach. Facet contributes to these discussions, bridging the gap until native rollups become feasible.
• Governance Minimization vs. On-Chain Governance: Two approaches are emerging: governance minimization (Facet’s model, where governance is rarely needed) and on-chain governance (community-controlled upgrades). One theory is that critical base infrastructure (L2s, bridges) will ultimately trend toward trust minimization (or elimination) to reduce attack surfaces, while application-level rollups may adopt flexible governance models. This mirrors the internet’s layered structure—where TCP/IP is fixed, but enterprises control how they use it.

In summary, the direction is clear – the industry is striving for Ethereum rollups that truly inherit Ethereum’s resilience. Every enterprise decision-maker should take comfort (and perhaps urgency) in that. Comfort, because the problems of today (admin key risk, etc.) are actively being solved by some of the brightest minds, meaning enterprise blockchain can become as reliable as the internet itself. Urgency, because those who move first to adopt these new robust platforms will have an edge. Just as companies that embraced cloud computing early reaped huge benefits, those who embrace trust-minimized, scalable blockchain networks early will shape standards and possibly enjoy network effects.

This brings us to the importance of industry collaboration and standards – an area where the Enterprise Ethereum Alliance has been instrumental.

The Importance of Standards: Enterprise Ethereum Alliance’s Role

In the shift from Web2 to Web3, standards and collaboration accelerate adoption. The Enterprise Ethereum Alliance (EEA) has played a crucial role in developing open standards to ensure interoperability, security, and enterprise alignment with Ethereum.

Why are standards so crucial, especially now?

• Interoperability – Just as the internet needed common protocols, blockchain needs standardized frameworks to enable cross-chain asset transfers, identity management, and seamless enterprise integration—reducing the cost and complexity of custom development.
• Vendor Neutrality & Risk Reduction – Standardized rollup implementations prevent vendor lock-in, ensuring enterprises can switch providers without being trapped in proprietary ecosystems. EEA’s certification programs help validate compliance and security, much like Wi-Fi or ISO certifications in traditional IT.
• Security & Compliance Best Practices – EEA codifies security frameworks for permissioned blockchain security, key management, and smart contract certifications, raising the baseline security for enterprise deployments.
• Bridging Private & Public Ethereum – Initially focused on permissioned Ethereum, EEA is now aligning enterprises with public mainnet advancements.

In context of everything we discussed: EEA can play a role in standardizing the approaches championed by projects like Facet. For example, if Facet’s model of no-admin L2 proves successful, the EEA could incorporate that into their recommended architecture (e.g., “L2 implementations SHOULD NOT include single-admin keys; use multi-party or code-is-law approaches instead”). Likewise, EEA can help define how PACE layering manifests in architecture – e.g., guidelines that an enterprise’s system of record usage of Ethereum might use permissioned sidechains writing hashes to mainnet, whereas system of differentiation might use public L2s with certain configs. By providing a reference architecture for enterprise Ethereum adoption (perhaps explicitly referencing pace layering), EEA can significantly cut down the analysis paralysis many organizations face.

Lastly, community and signaling: When major enterprises endorse standards, it validates best practices and influences regulatory perception. A Fortune 500-backed EEA endorsement of trust-minimized rollups could drive broader industry adoption and cement Facet-like architectures as the enterprise norm.

Conclusion: The Enterprise Ethereum Inflection Point

Enterprise Ethereum adoption is at a pivotal moment—similar to the early days of cloud computing and the internet. The technology has matured with scalable L2 networks, proven use cases, and emerging standards, yet admin key dependencies and governance risks remain critical challenges.

The Path Forward:

• Strategic Frameworks Enable Adoption – Applying Gartner’s PACE Layered Strategy ensures enterprises balance innovation with stability, just as it did in Web2.
• L2 Rollups Are Non-Negotiable – Ethereum scales today. The question isn’t “can it scale?” but “how do we govern and integrate these networks securely?” Enterprises must focus on security, decentralization, and interoperability over raw transaction throughput.
• Trust-Minimization is Key – Paradoxically, enterprises need less control to achieve long-term security. Facet removes admin key risk, offering Ethereum-level security at L2 scale—a true public good for enterprise blockchain.
• Standards Will Shape the Next Era – Just as Linux, TCP/IP, and cloud computing benefited from standardization, trust-minimized rollups and governance best practices will define Ethereum’s enterprise future. Those who collaborate now will help shape the next decade of blockchain infrastructure.

This is the critical moment for enterprises, VCs, and decision-makers to act. The next 1-2 years will shape enterprise blockchain adoption for the next decade. Facet, in particular, stands out as an exemplar of the direction we need – a public-good rollup that any enterprise can leverage without handing over the keys. Its emphasis on governance-resistant design and alignment with Ethereum’s ethos is setting a benchmark. As technical leaders, we should encourage and participate in such efforts: whether that means piloting a project on Facet, contributing to its open-source development or research, or simply demanding that other rollups follow the same principles.

The transition from Web2 to Web3 is happening now. Those who move first—leveraging open, permissionless infrastructure instead of admin-controlled chains—will define the new standard.

The tools and models are ready. The time to build is now. Let’s make enterprise Ethereum trustless, scalable, and unstoppable.

Learn More About Facet

Ethereum’s future depends on scalable, trust-minimized infrastructure—and Facet is at the forefront of making that a reality. Whether you're an enterprise innovator, developer, or investor, you can explore how Facet is redefining Layer 2 scalability without admin key risks.

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