Vitalik Buterin suggests SimpleL1 as Ethereum’s new direction

Ethereum’s existing architecture combines transaction processing, smart contract functionality, and agreement mechanisms into a unified Layer 1 framework. This design, referred to as monolithic, has been the foundation of the platform since its inception. While this approach has served Ethereum well in many ways, it also poses certain limitations and challenges that developers and users have encountered over time.

One of the main drawbacks of Ethereum’s monolithic design is scalability. As the usage of the platform has grown, so too have the demands on its infrastructure. The current architecture struggles to handle the increasing number of transactions and smart contracts being executed on the network. This has led to congestion and high fees during times of peak activity, making it less efficient and cost-effective for users.

Furthermore, the all-in-one nature of Ethereum’s Layer 1 stack makes it less flexible and adaptable to changing needs. Developers looking to implement new features or improvements must work within the constraints of the existing architecture, which can be limiting. This has hindered the platform’s ability to innovate and evolve rapidly in response to market demands and technological advancements.

In recent years, there has been a growing consensus within the Ethereum community that a more modular approach to the platform’s design is needed. By breaking down the Layer 1 stack into separate components that can be upgraded and replaced independently, Ethereum can become more scalable, flexible, and resilient. This idea has given rise to the concept of Ethereum 2.0, which aims to address these shortcomings through a series of upgrades and changes to the platform’s architecture.

One of the key elements of Ethereum 2.0 is the shift towards a more layered and modular design. This involves separating transaction processing, smart contract execution, and consensus mechanisms into distinct layers that can interact with each other more efficiently. By decoupling these functions, Ethereum can achieve greater scalability and performance while enabling faster and more cost-effective transactions on the network.

Another important aspect of Ethereum 2.0 is the implementation of a proof-of-stake consensus mechanism. This will replace the current proof-of-work system, making the network more energy-efficient and sustainable in the long run. By transitioning to a proof-of-stake model, Ethereum will be able to achieve greater security and scalability while reducing its environmental impact.

Overall, the transition to Ethereum 2.0 represents a significant milestone in the evolution of the platform. By adopting a more modular architecture and implementing a proof-of-stake consensus mechanism, Ethereum aims to overcome the limitations of its current design and position itself for long-term success and scalability. These changes are expected to enhance the user experience, reduce fees, and enable new use cases and applications to thrive on the platform. As Ethereum continues to grow and evolve, the community is eager to see how these upgrades will impact the future of decentralized finance and blockchain technology as a whole.