Author: Asher Zhang, BitpushNews

In 2017, the Web3 industry experienced a public chain battle. At that time, many public chains developed explosively and tried to become "Ethereum killers". However, after the final choice of developers and users, there are only a few mainstream public chains that can continue to operate, and there are even fewer that can compete with Ethereum. However, Ethereum's performance has been criticized in the context of rapid development of the industry. The development of sharding based on Layer1 has been slow, and Layer2 has become an important strategic turning point in the development of Ethereum. What followed was the explosive growth of Layer2. Although it seems prosperous, the competition between Layer2s has led to liquidity fragmentation and poor user experience. This round of development is far less than Solana and others. However, the battle for the unification of Web3 is also quietly beginning, and Ethereum is also getting ready.

The battle for Web3 unification begins, and AggLayer has a breakthrough

From the perspective of the development of mainstream public chains, Ethereum was born earlier. Although it has great advantages in security, its own technology is slightly behind; compared with later Solana, Ethereum's current performance is also far behind. But after Solana, technological development has not stopped, and the Move language and MoveVM state machine have once again revealed their unique advantages. The Diem team of Facebook (now Meta) discovered two limitations of the Solidity programming language widely used in the blockchain industry. First, Solidity has vulnerabilities such as reentry attacks and double-spending attacks. Second, Solidity cannot parallelize transaction processing, resulting in bottlenecks. With the development of cross-Layer2 interoperability, the battle for the unification of Web3 based on Ethereum will also begin.

On July 31, 2024, Movement Labs, which focuses on the development of open source tools for the Move smart contract language, announced a strategic partnership with Polygon Labs, which is building an aggregated blockchain network. Movement Labs will be integrated into the aggregated network AggLayer developed by Polygon Labs, which means unified liquidity between Layer 2 based on MoveVM, all blockchains connected to AggLayer, and Ethereum.

Rushi Manche, co-founder of Movement Labs, said: "Our platform solves a key need in the Web3 ecosystem. Developers no longer need to choose between the trusted Ethereum environment and the security of other Layer 1. Movement provides the best of both worlds - maintaining the operational inertia of Ethereum Layer 2 while improving security and performance using the Move language. This will allow projects to deploy more confidently, while taking advantage of the powerful economic benefits of the Ethereum system, while also guarding against common vulnerabilities."

Marc Boiron, CEO of Polygon Labs, said: “AggLayer’s mission is to achieve the full unification of Web3 by bringing together as many users, developers, programming languages, smart contracts, blockchains, and liquidity as possible. Introducing the blockchain within the Movement network to AggLayer can accelerate this mission and bring Web3 closer to unlimited interoperability. This collaboration can greatly alleviate some of the most pressing challenges in Web3, such as isolated liquidity and fragmented user experience, which are currently the key issues that hinder the large-scale adoption of Web3.”

List of mainstream cross-Layer2 interoperability projects

In addition to the AggLayer mentioned above, there are also a number of projects dedicated to solving cross-Layer2 interoperability problems. This article provides a brief inventory for investors’ reference.

Avail

Avail has three foundational pillars: Data Availability (DA) layer, Nexus interoperability layer, and Fusion Security layer. Avail DA is a chain-agnostic DA layer that combines KZG commitments and Data Availability Sampling (DAS). The Nexus interoperability layer is the coordination component of Avail, providing a permissionless framework for inter-Rollups messaging. Fusion Security completes the Avail unified layer by providing additional security for the unified layer of the Avail ecosystem and web3.

Avail DA supports multiple blockchain architectures including Validium, Optimism, Sovereign Rollup, and BTC L2, and has reached partnerships with more than 70 partners. In addition, Avail has also integrated with mainstream Ethereum L2 solutions and Rollup frameworks including Arbitrum Orbit, Optimism OP Stack, Starkware, Polygon CDK, and ZKsync. Avail's Nexus interoperability layer and Fusion Security layer are still under development.

Hyperlane

Hyperlane is the first universal interoperability layer built for modular blockchain stacks. Unlike other interoperability protocols such as Wormhole and Layerzero, which only support EVM and non-EVM (such as Solana), Hyperlane supports EVM, non-EVM, and Cosmos blockchains (such as Tia, Inj, etc.). More importantly, Hyperlane allows anyone to deploy permissionlessly in any blockchain environment, allowing these chains to communicate seamlessly on other chains deployed by Hyperlane. Hyperlane has received support from well-known investors including Circle and Kraken Venture, and has raised more than $18 million, but its valuation has not yet been disclosed.

LayerZero

LayerZero2 currently provides cross-chain interoperability for more than 20 blockchains. According to the LayerZero V2 white paper: There are four components in V2, including an immutable endpoint that can achieve anti-censorship, an append-only collection of on-chain verification modules (MessageLib registry), a set of decentralized verification networks (DVN) for cross-chain verification data without permission, and a permissionless executor (independent of the cross-chain message verification context execution function logic). From a process point of view, LayerZero is divided into an execution layer and a verification layer. The verification layer securely transmits data between chains, and the execution layer interprets this data to form a secure, anti-censorship messaging channel. The isolation of executors from any verification-related code can minimize the possibility of introducing attack surfaces into security-critical code.

There won’t be many Layer2s that can survive in the end

Since the current bull market, Ethereum’s performance is indeed not as good as that of public chains such as Solana. This is mainly because Ethereum is making up for its own technical shortcomings. Ethereum was born earlier, and many designs were not perfect at the beginning. As the industry develops, it is inevitable to make repairs and strategic adjustments. Faced with the adoption difficulties of the Web3 industry, Ethereum is mainly solving its performance and usability problems. Due to the slow development of sharding technology based on Layer1, Ethereum turned to the Layer2 strategy. The previous Decun upgrade was mainly to solve the Layer2 cost problem. In addition to the cost problem, what urgently needs to be solved now is the Layer2 liquidity fragmentation problem, which is also the importance of cross-Layer2 and cross-chain interoperability.

Just like 2017 was the year of the public chain explosion, this year is also the year of Layer2 explosion. Although the market performance is not good, many leading Layer2s have indeed been launched and competed on the same stage. But just like the year of the public chain explosion, in the end there will only be a few mainstream public chains left, and there will not be too many Layer2s that can survive in the future. With the maturity of cross-Layer2 and cross-chain technologies, Ethereum's infrastructure will be much more complete. At this time, many Ethereum developers will undoubtedly enter the development of the application field and continue to occupy the current Web2 territory.