‘Only a few’ Ethereum L2s will survive the next 5 years: Manta co-founder

Source: Cointelegraph

Of the 44 active Ethereum layer-2 (L2) blockchains in existence today, “only a few” will still be around in five years, said Kenny Li, co-founder and chief operating officer of Manta Pacific.

According to data from L2Beat, there are currently a total of 44 active Ethereum L2 networks, boasting a combined total value locked (TVL) of $36.92 billion, with Arbitrum standing in first place with $14.5 billion TVL.

However, Li claims the future is only properly paved for “modular” blockchains such as Manta, Celestia and Cosmos.

Critics of this viewpoint, however, argue the term is simply a “marketing stunt” and the success of a network has nothing to do with its approach to development and scalability.

‘Monolithic’ BTC and ETH killers

Speaking to Cointelegraph, Li argues the flood of new L2s on the Ethereum network is charting the same path as “forks” of the Bitcoin and Ethereum networks in the past — none of which “survived.”

There are 44 active Ethereum L2s with a combined TVL of $36 billion. Source: L2Beat

“With all of the Bitcoin forks — Bitcoin Cash and BSV — they all took an existing technology and forked it,” Li explained.

“They said: ‘You know what? We’re going to make these minor changes to it. And by making these minor changes to it, we’re going to create something that’s ‘better than Bitcoin,’” Li said, adding:

“Fast forward to 2024, it’s just Bitcoin. There’s no other Bitcoin fork community that has any comparable metrics, any comparable community that even comes close to the original Bitcoin.”

Li added that the same thing played out with Ethereum in 2016 when new networks such as EOS and NEO attempted to position themselves as “Ethereum killers” by offering alternative Ethereum Virtual Machine and VM environments that tried to make slight tweaks to the pre-existing Ethereum ecosystem.

In Li’s view, the central issue with all of the Bitcoin and Ethereum “forks” was that they were all built “monolithically,” meaning that they didn’t allow for the quick integration and adoption of new technology that showed up as time went on.

“They all built monolithically, and what happened to them, right? Fast forward again to 2024, Ethereum is the dominant player,” Li said.

“Will we see this many L2s in five years or so? I don’t think so. Only a few will survive.”

Modular blockchains are networks that export their primary tasks: execution, settlement, consensus and data availability to external blockchains, which proponents say offer greater design flexibility.

In contrast, monolithic blockchains prioritize a single-system architecture, which handles all tasks within a single layer of the network.

Some, however, don’t see any reason to debate “modular vs. monolithic” at all.

Maybe it’s all a ‘marketing stunt’

Austin Federa, head of strategy at the Solana Foundation, described the relatively new debate around the two terms as a “marketing stunt” introduced by Celestia.

While many understand Ethereum’s more “modular” architecture — relying on L2s to complete specific tasks — as standing in direct contrast to the “monolithic” nature of other higher-throughput networks, such as Solana or Avalanche, Federa disagrees with the use of the term entirely.

“We have to remember that the modular-versus-monolithic debate is all a marketing stunt,” said Federa. “Celestia created this distinction between modular and monolithic. It’s not a natural distinction, and there’s nothing organic about it.”

Li claims that Manta — launched on Jan. 18 — could be described as the “first and largest” modular layer-2 network on Ethereum, as it uses Optimism’s OP stack and utilizes Celestia for data availability (though Ethereum co-founder Vitalik Buterin would say that makes it a “validium” and not a genuine L2).

At the time of publication, Manta is the fourth-largest L2 network in terms of TVL, only recently overtaken by the new L2 Blast, which launched its mainnet on March 1.

Manta Pacific is the fourth-largest Ethereum L2 by TVL. Source: L2Beat

“We don’t build in a monolithic way. We haven’t built anything in terms of core architecture just by ourselves,” Li explained.

Related: Bitcoin layer 2s among catalysts of this bull cycle, Bitcoin OG says

“We’re taking a very modular approach, which means that we’re able to essentially plug and play different technologies that are available at different times so we can continue to adapt to changing demands,” Li added.

Federa, however, argues that there’s no need to make a distinction between the two approaches.

“The truth is, there is no such thing as a modular system, and there’s no such thing as a monolithic system.”

Federa explained that a monolithic network is simply an “integrated” blockchain where tasks are handled in a single layer, whereas “modular” — or “fragmented” networks — complete the same functions across several layers and don’t actually contribute considerably to the success or outcomes of a given network.

“It’s like how the terms ‘pro-life’ and ‘pro-choice’ are, are two positive spins on something, right? Like, no one is actually anti-life or anti-choice, right? This is all just marketing terminology to put forward a certain narrative that people want to talk about.”

“I think that setting up these things as being at odds with one another is not a particularly useful or accurate way to think about these systems. They’re just different software architecture choices that are not actually that different at the end of the day,” Federa said.