Chapter 1: What does Vitalik's L2 pivot tweet mean for Ethereum scaling?
We scaled far further than what any L1 can scale, in our opinion. We just did a stress test on mainnet, so everyone was able to do it, where we did 55,000 transactions per second. That was a mixture of Unity free transfers as well as ERC transfers. And while that was happening, we were allowing users to play low-latency games like Crossy Fluffle with zero UX trade-offs.
Now, this is only possible because we've chosen to build Layer 2.
Bankless Nation, I'm here with Namik and Lei Yang of MegaEth. Namik, Lei, welcome to Bankless.
Thanks for having us. Happy to be back.
All right, so some pretty interesting times to be a layer two on Ethereum. We're quoting the day after Vitalik released his layer two tweet. A big moment, to say the least. When you guys saw this tweet rocket around Twitter, it got so big that basically everyone on crypto Twitter was commenting on this. What was your reaction to it?
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Chapter 2: How does MegaETH ensure property rights for users?
Namik, I'll start with you.
Yeah, I mean, thanks for the question, David. I think it was almost a validation of our point of view for a while. We're called MegaEth, we love Ethereum. I mean, I go into crypto because of ETH, so it has a special place in my heart. But the reason why Mega uses Ethereum is not because of fanboyism, but because it allowed us to build the most performant possible blockchain. Right.
Chapter 3: What are the challenges in designing effective rollups?
So Ethereum gives a guarantee of sorts. Right. The guarantee, it's simple. It's the most decentralized or incomplete blockchain. And we take that guarantee and we say it's sufficient for us to build a hyper-performance execution environment that we believe can solve for an entire new set of use cases. And that's basically the relationship between MegaEaf and Ethereum.
Vitalik kind of points towards that in his, like, what did I do if I was an L2 today? He says he would build a bunch of stuff which is not similar to Ethereum L1. He mentioned six things.
Chapter 4: What were the results of MegaETH's stress test?
We do 50% of them off the bat. We scale... Buzzword, but it is a word. We scaled far, far further than what any L1 can scale in our opinion. Right. So we did a stress test on mainnet. So everyone was able to do it where we did 55,000 transactions per second. That was a mixture of Unity free transfers as well as ERC transfers.
And while that was happening, we were allowing users to play low latency games at Crossy Fluffle with zero UX tradeoffs. Now, this is only possible because we've chosen to build a layer two.
Chapter 5: How does MegaETH achieve high transaction throughput?
So that's one of the things we do, which Vitalik had described. We've also built an ultra low latency environment, something that really can't be done with a traditional consensus based layer one system. And we decided to do a bunch of unique, wacky things on the chain, which we did because applications wanted us to. That's an example is our native enshrined Oracle chain link.
So when I saw the article slash tweet, I was happy because a strong ETH is good for crypto. I think if ETH doesn't do well, our entire industry, i.e. smart contract blockchains, we're all screwed.
Chapter 6: What is the business model behind MegaETH?
And I was kind of happy because it almost meant we can drop some of the traditional alignment games. You have to use EFDA. And we can try to build the most performance systems we can and hopefully capture new sections of the market.
Lei, what do you think? Yeah, it's pretty much about differentiation because to us, it's pretty uninteresting to try to build and replicate exact primitives provided by the layer one because then first, of course, you face the question, why do I use a layer two that provides essentially the same service as the layer one?
Chapter 7: How does MegaETH plan to handle MEV?
But also it's just technically uninteresting, uninteresting in a technical sense, in an academic sense that you are basically trying to replicate things in a much harder way, in the sense that actually I think to the contrary of I think common belief, it's actually very hard to build a secure layer two. And if all you want from a layer two is kind of just...
adopt Ethereum security as is, then I think you are better off like building an odd layer one, I would say. I would go as far as that.
Yeah, I do think in Vitalik's tweet, there's definitely some validation of maybe, I'll call it the barbell approach to Ethereum and to layer twos, which is like on one side of the barbell with one heavyweight, you have Ethereum. And that's going to be slow from transactions per second, but it's going to be max transactions decentralized.
And that's good for lots of use cases, including anchoring a layer two, but also slow DeFi.
Chapter 8: What is MegaETH's strategy for app incubation?
And that's getting faster, by the way. So that's one side of the barbell. The other side of the barbell, you have some extreme things that do things that aren't replicating what the Ethereum L1 does, but that kind of explore a frontier in a totally different domain. And so mega ETH seems well positioned on the barbell strategy in that it's just like accelerating a number of things.
One in particular is just like insane scaling levels that the ETH layer one cannot do. But I want to maybe broaden this because so there's so much to discuss with this Vitalik tweet, I feel like. Like one is just that like this feels like a departure from maybe how Ethereum, how Vitalik, how the community, how even at one time Bankless thought about the role of layer twos.
It was not too long ago, maybe three years ago, there were people like Plenia talking about how layer twos scale. There was people like Justin Drake saying, hey, like if you're on the L1, gas fees are high, get off the L1 and go to the L2, right? And that was oft quoted. Even on Bankless, we would talk about the scaling strategy for Ethereum was primarily L2s.
And the idea was you take everything that worked on the L1, and it's expensive, and then you move it to an L2, and it should just work. In fact, Vitalik kind of acknowledges this. He says the original vision is no longer working. Ethereum itself needs to scale. In the original version, basically, we were offloading a lot of this to L2s.
And that's kind of no longer necessary because the L1 is scaling. I think of this as a pivot, not a values pivot, but I'm going to use the P word, a pivot in terms of the roadmap itself, in terms of what was originally envisioned with a rollup centric roadmap and where we are now. To me, it's a very logical pivot.
We were talking about this on Bankless probably 18 months ago when we're just kind of feeling out whether this made sense or not. But there was a lot of immune system attack on the idea of this tweet. And you can even see it. I think some in the Ethereum community are like, oh, we feel disillusioned by this. This feels like a departure from what Ethereum has been saying for many years.
This feels like wasted time and wasted energy. That's a lot of different thoughts, but that's because there's so much to unpack, I feel like, with this post. It's like, you know, three to five years of Ethereum history. Do you guys have any thoughts on what I just said? Do you view this as a pivot? Is it logical to you, or is it more of the same of where Ethereum was always going?
What do you think, Namik?
I think for me, it's a sad realization of like Moloch won almost in some ways, right? We have to be honest. Everyone has different incentives, right? Like I remember one of these points was there's been stage one roll-ups that told me they did not want to become stage two, point blank. And the reason is because it was the regulatory environment. They prefer to be more centralized.
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