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Ethereum's Future: The Survival of Layer 2 Solutions

Ethereum's layer 2 dynamics in the foreseeable future

Kenny Li, Manta Pacific's co-founder, forecasts a stark future: of the 44 active L2 blockchains today, 'only a few' will endure over the next five years. This perspective, grounded in the combined total value locked (TVL) of $36.92 billion across these networks, highlights a competitive landscape. Arbitrum leads with a TVL of $14.5 billion, setting a high bar for success. 

Li's assertion that only modular blockchains like Manta, Celestia, and Cosmos have a fighting chance sparks debate, with some dismissing it as a mere marketing ploy. As the crypto community watches closely, the future of Ethereum's L2 solutions remains a vital question.

The modular advantage in blockchain technology

Kenny Li elaborates on the competitive edge of modular blockchains, drawing parallels with historical blockchain developments. 

Li observed:

"With all of the Bitcoin forks — Bitcoin Cash and BSV — they all took an existing technology and forked it," 

He critiques these attempts at innovation, noting: 

"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 highlights the failure of these endeavors, pointing out that: 

"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." 

This reflection sets the stage for his argument that Ethereum's survival hinges on adopting a modular approach, unlike the 'monolithic' strategies of its predecessors, which lacked the flexibility to integrate and evolve with new technological advancements.

Debunking the modular vs. monolithic debate

The debate over blockchain architecture takes a controversial turn with Austin Federa's input from the Solana Foundation. He challenges the binary of modular versus monolithic networks as a "marketing stunt," originally propagated by Celestia. 

Federa asserts:

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

His critique underscores a skepticism towards the framing of this debate as pivotal for blockchain's future, suggesting that the success of a network relies less on its architectural label and more on its inherent technological merits and community support. This perspective invites a reevaluation of how blockchain communities and developers perceive and engage with the network design.

Manta's position and the future landscape

Kenny Li asserts Manta's pioneering role in the modular blockchain space, emphasizing its strategic use of technology to ensure adaptability and longevity. 

Li explains, highlighting Manta's collaborative and flexible approach:

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

He adds: 

"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." 

This vision contrasts with Austin Federa's skepticism, who argues that the dichotomy between modular and monolithic systems is more a matter of semantics than substantive difference.

Federa concludes, suggesting that the debate may not significantly impact the practical outcomes of blockchain development:

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