Ethereum Second-Layer Scalability Still Needs Work, Says Starkware CEO

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Uri Kolodny, co-founder and CEO of blockchain firm StarkWare, told Cointelegraph that Ethereum second-layer scalability solutions still need some work.

Ethereum co-founder Vitalik Buterin claimed on June 1 that the blockchain’s layer-two scaling initial deployment has “basically” succeeded. Kolodny — on the other hand — told Cointelegraph that he is not as convinced:

“I wouldn't pop the champagne bottles just yet, as many of these proposed solutions have at this point been deployed only on Twitter, not on Ethereum Mainnet.”

Kolodny admitted that there are many promising developments when it comes to second-layer Ethereum scalability solutions. He explained that “there are several efforts around what is called Optimistic Rollups.” Still, he said that nobody really knows how well this approach could work:

“None of the Optimistic Rollups has yet to reach mainnet, so it's still too soon to tell how they will do.“

Building new systems takes time

As Cointelegraph reported in early November, decentralized exchange IDEX claimed to have created an “infinite scaling solution” for the Ethereum network based on a variation of Optimistic Rollups. While Kolodny is optimistic that second-layer Ethereum scalability solutions are indeed possible and will succeed, he thinks we are not there yet:

“A lot of these ideas are relatively new, and it simply takes time to build them out. We at StarkWare are getting on Mainnet after 2 years of very intense development work.”

When asked what is holding off Ethereum second-layer scalability solutions, Kolodny said that “lack of proper integration into wallets and other tooling already in place” is part of the reason. Another reason why he believes that such systems are not more widely used is the lack of developer confidence in any second-layer solution:

“Finally, there is tremendous uncertainty for many DApp developers — which solution will emerge as the dominant one? Which [one is] right for them? What about all those Ethereum killers? Should they perhaps wait for Eth2.0 — all this uncertainty results in delayed decisions, which also slows down adoption.”

The future of Ethereum second-layer scalability solutions

Looking into the future, Kolodny said that he believes that “transactions (i.e. trading and transfers) will move to layer two faster than we realize.” He explained that Ethereum transaction fees are really high today and this will force many to move to second-layer solutions that allow them to perceive lower and more predictable transaction costs. He continued:

“I think that what will follow is plenty of bells and whistles around these basic transactions. […] I think that things like perpetual contracts and margin trading are another interesting capability that layer two solutions should support. The rest of the DApp crowd will follow.”

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