Scalability Endgame - How Layer 3 will solve Scalability for good (Simplified)

One of the most important pieces to “on-board the next billion users” and really crossing the chasm to the masses is to have an infrastructure that can support all of these amazing use-cases that we keep exploring & experimenting on so many industries to open new possibilities,

?fixing broken models and make some old-procedures more efficient / secure / transparent and often it’s a mix of these.

Layer 2 is already here and it’s picking up fast - according to Messari,?User activity did pick up on Layer-2 as Ethereum’s rollup-centric roadmap seems to be slowly materializing.?

Some L2 stats:

Total value locked on both Optimism and Arbitrum reached $1 billion dominating the Layer2 Optimistic rollups market while StarkWare is the dominant force in Layer2 ZKrollups which according to many (Vitalik among them) will be the best solution.?

StarkWare dominates the market with $559M TVL, Cumulative Trading of $711B on their L2 network supporting over 230M transactions (!).?

In a nutshell, L2 gives a much better infrastructure that gives the network the option to maintain it’s security on it but? doing the "hard work", improving TPS, latency of transaction & reducing price dramatically.

So why do we need Layer3 and what will be it’s potential use-case??

“If we can build a layer 2 protocol that anchors into layer 1 for security and adds scalability on top, then surely we can scale even more by building a layer 3 protocol that anchors into layer 2 for security and adds even more scalability on top of that?

Newer ideas around layer 3s, such as the framework proposed by Starkware, are more sophisticated: they aren't just stacking the same thing on top of itself, they're assigning the second layer and the third layer different purposes”

So which purposes can L3 can offer??

Vitalik explained that StarkWare offers a “sane” version of layer3 that can actually be useful, he later compress their article to “3 vision of what L3 are for”:

1. Customized functionality:

In this example there is no attempt to use L3 in order to enhance scalability (A.K.A scalability squared), the use-case here is to enable another layer that will separate and be used to customized functionality for each app, privacy is an example that he gave and can be adjusted accordingly in theory.?

2. Customized scaling -?

“Customized scaling might come in different forms: specialized applications that use something other than the EVM to do their computation, rollups whose data compression is optimized around data formats for specific applications.”

Bottom line, it will enable to use the different scalability solutions that are available and you can think of it like taking out the different options that usually comes in a bundle and now they can be used each individually in a way that will be ideal for the specific use-case of certain application.?

3. Weakly trusted scaling -?

One of the topics people are constantly talking about his that web3 isn’t just black or white - it’s not 100% decentralized or fully centralized and nor fully trustless, L3 in that case offers a weakly trusted scaling (validiums) - systems that use Snarks that leaves data availability up to a trusted third party or committee.

This “highly underrated” use-case is suited for enterprise blockchain applications that may be served by a centralized server.?

Vitalik posted this article after StarkWare announced their recursive validity proofs that have been well tested in production,

with StarkWare co-founder Eli-Ben Sasson recently telling Coin Telegraph that its recursive proofs have rolled up as many as 600,000 NFT mints in a single transaction on Immutable X and that 60 million transactions could soon be on the cards “with more engineering and tweaking.”