Vitalik talks about the diversification trend of Ethereum ecosystem culture: Layer2 will become the birthplace of differ

Original author | Vitalik

Compiled by Nan Zhi from Odaily Planet Daily

In my recent article on the differences between Layer 1 and Layer 2 scaling, I concluded that the most important difference between the two approaches is not technical, but organizational (similar to the term used in the field of industrial organization): it is not about what can be built, but what will be built , because it depends on how the boundaries between different parts of the ecosystem are drawn, and how this affects peoples motivations and ability to act. In particular, a Layer 2-centric ecosystem is inherently more diverse and more likely to naturally lead to a more diverse range of different approaches to scaling, virtual machine design, and other technical features.

In my last post, I stressed a key point:

Since Ethereum is a Layer 2-centric ecosystem, you are free to independently build a sub-ecosystem with your unique characteristics while being part of the larger Ethereum ecosystem.

In this post, I argue that this is not only technically true, but also culturally true . Blockchains not only have unique trade-offs technically, they also have unique cultures. The day after Ethereum and Ethereum Classic (ETC) forked, the two blockchains were technically identical. But they were culturally very different, a fact that helped shape how the two chains would differ significantly in focus, user base, and even technology stack eight years later. The same can be said of Ethereum and Bitcoin: initially, Ethereum was roughly “Bitcoin with smart contracts,” but a decade later, those differences have become much more profound.

Kevin Pham tweeted in 2017 comparing the cultures of Bitcoin and Ethereum. Both cultures are evolving: since 2017, we’ve seen the rise and fall of the “laser eye” movement, the rise of movements like Ordinals, Ethereum becoming a Layer 2-centric ecosystem, and both becoming more mainstream. But they’re still different, and it’s probably best to keep them that way.

What aspects does culture influence?

The impact of culture is similar to incentives — in fact, culture is part of the incentives. It affects who is drawn into an ecosystem and who is excluded. It affects what people are incentivized to do and what people are able to do. It affects what is considered legitimate — both in protocol design and at the ecosystem and application level.

Blockchain culture has a huge impact on several particularly important areas, including:

1. The type of change made to the agreement – in terms of quantity, quality and direction

2. The ability of the protocol to remain open, censorship-resistant, and decentralized

3. The ecosystem’s ability to attract high-quality protocol developers and researchers

4. The ecosystem’s ability to attract high-quality application developers

5. The ecosystem’s ability to attract users – both in terms of the number and type of users that match

6. Public legitimacy of the ecosystem in the eyes of outsiders

If you really value whether a blockchain is decentralized, you need to look not only at how the current technology achieves those goals, but also how the culture values those goals. If a blockchain’s culture does not value curiosity and openness to new technologies, it may fail in both decentralization and speed because it cannot adopt new technologies like ZK-SNARKs that can bring both improvements. If a blockchain is understood by the public as a casino chain and nothing else, it will be difficult to attract non-casino applications to join. Even non-speculative core protocol developers and researchers become more difficult to attract. Culture matters because culture is at least to some extent upstream of almost everything else.

The Culture of Ethereum

Ethereum developers collaborating in Kenya, May 2024. Ethereum’s core research and development ecosystem is a subculture of Ethereum, though it is itself quite diverse and has a fair amount of internal disagreement.

Researcher Paul Dylan-Ennis has spent a lot of time exploring and understanding Ethereum’s subcultures. He identified three main subcultures of Ethereum :

• Cypherpunk : A Cypherpunk is committed to open source development, DIY technology. In Ethereum, Cypherpunks build infrastructure and tools, but are neutral about how they are used. Historically, Cypherpunks value privacy, but in Ethereum, this is not always a priority.

• Regens : Many of Ethereum’s influential voices are committed to taking a Regen approach to building the technology. Rooted in Vitalik Buterin’s interests in politics and social science, many Regens conduct governance experiments aimed at improving or even replacing contemporary institutions. This subculture is characterized by its experimental nature and interest in the public good.

• Degens : Users who are purely driven by speculation and wealth accumulation are called Degens. Degens are financial nihilists who focus on current trends and hype, hoping to escape the contemporary neoliberal, capitalist dilemma through luck. Degens tend to accept extreme risks.

These are not the only important groups, and you could even question how consistent they are as groups, but the categorization is interesting as a first approximation. As mentioned above, Cypherpunks include those who are interested in protecting people’s privacy and freedom, as well as those who are interested in working with cutting-edge math and cryptography but don’t have any strong ideology.

An important feature of these groups in Ethereum is that, due to the flexibility of Ethereum as a development platform (not just a currency), each group has an arena for action, not just discussion. Rough examples:

• Cypherpunks participate in Ethereum core research and development and write privacy software;

• Regens for Gitcoin donations, retroactive charity funding, and various other non-financial applications;

• Degens trade Meme tokens and NFTs, and play games;

In my opinion, this cultural branch has served Ethereum well. The Ethereum core development culture values high-quality thinking on topics such as advanced cryptography, game theory, and increasingly software engineering, values freedom and independence, values Cypherpunk ideals and blockchainized versions of these principles (such as immutability), and adopts an idealistic approach centered on values and soft power.

These values are important and positive, and they make Ethereum very advantageous in aspects 1, 2, 3, and 6 of the culture list in the previous section. But they are incomplete. First, the above description hardly emphasizes how to attract application developers and users. Stability-oriented values help provide confidence to users who hold ETH and use Ethereum, but thats all. Cultural diversity is a way out of this dilemma, allowing one subculture to focus on core development while another subculture focuses on expanding the boundaries of the ecosystem.

But this raises the question: Is there a way we can further enhance this cultural diversity?

Subculture and Layer 2

This leads to perhaps the most underrated feature of Layer 2 – Layer 2 is the ultimate arena for a subculture. Layer 2 allows subcultures with vast resources to emerge, allowing them to learn and adapt in order to win and thrive. Layer 2 needs to be effective in many ways, including attracting users and application developers, developing technology, and building a global community.

A key feature of Layer 2 here is that it is both an ecosystem and purpose-built. Local meetup groups can form their own ecosystems and have their own unique culture, but their resources and execution are relatively limited. DApps may have a lot of resources and execution, but they are just programs, you can use them, but you cant build on them. Uniswap is great, but the concept of building on Uniswap is far less meaningful than building on Polygon.

Layer 2 can and does play a role in cultural specialization in a variety of ways, including:

• More willing to develop users: intentionally attract specific external participants, including individuals, businesses, and communities to participate in the ecosystem.

• Diversity of values emphasized. Does your community focus more on “public good”, “good technology”, “Ethereum neutrality”, “financial inclusion”, “diversity”, “scalability” or other concepts? Different L2s give different answers.

• Diversity of participants: What kind of people does the community attract? What groups, personality types, languages, regions are emphasized?

Here are a few examples:

Optimism

ZKSync

MegaE TH

Starknet

Polygon has succeeded through partnerships with mainstream companies and an increasingly high-quality ZK ecosystem; Optimism has Base and World Chain, and has a strong cultural interest in concepts such as traceable funding and non-token governance; Metis focuses on DAOs; Arbitrum is known for its high-quality developer tools and technology brand; Scroll focuses on preserving the essence of Ethereum – trust-minimized, secure, and open source; Taiko emphasizes seamless user experience, community alignment, security first, and foundation. In general, each Ethereum Layer 2 has a unique soul: some combination of Ethereum culture, plus its own unique twist.

How can a Layer 2-centric cultural approach succeed?

The core idea of a Layer 2-centric cultural approach is that it attempts to balance the benefits of pluralism and collaboration by creating a diverse collection of different sub-cultures that still share some common values and work together to achieve the critical infrastructure of those values.

Ethereum is trying to diversify

There have been other attempts at a similar two-tier approach. The most notable example I can think of is the Delegated Proof of Stake (DPoS) system of EOS in the 2017 era. EOS’s DPoS works by having token holders vote on which delegates will run the chain. Delegates will be responsible for creating blocks and reaching consensus on the blocks of others, and they will also receive a large number of tokens from the EOS issuance. Delegates do a lot of community building to attract votes, and many of these “nodes” (e.g. EOS New York, EOS Hong Kong) eventually become independent well-known brands.

This ultimately proved to be an unstable system because token voting is inherently volatile and because some powerful players in the EOS ecosystem turned out to be greedy assholes who siphoned large amounts of community-raised funds for personal gain. But it exhibited an amazing property when it worked — it created powerful, highly autonomous sub-communities that were still working together toward a common goal .

EOS New York, one of the top EOS block producers, has written quite a bit of open source infrastructure code

When this approach is successful, it also creates a healthy competition. The Ethereum community naturally tends to be centered around OG by default, which can help maintain the communitys values when the community grows rapidly, reducing the chances of adverse trends from the outside world entering and Ethereum no longer caring about free speech or open source. But this also has risks, which may shift attention from technology to social games, allowing OG to continue to lead even if they perform poorly, thereby limiting the ability of the culture to renew and evolve itself .

With a healthy “subculture culture” these issues can be mitigated, whole new subcommunities can rise and fall, and successful people within subcommunities can even start contributing to other aspects of Ethereum. In short, there is less legitimacy gained through active time and more legitimacy gained through performance.

We can also examine the stories above to identify possible weak spots. Here are some that come to mind:

• Trapped in an echo chamber: Essentially the same failure mode I mentioned in my last post, but for culture. L2 starts to feel like separate universes with little cross-talk between them.

• Trapped in a monoculture: Whether due to common human biases or common economic incentives, or the extremely unified Ethereum culture), building scenarios and technical choices become identical or even make wrong choices. Or, a single L2 or a few L2s solidify, and there is no longer a mechanism for new people and sub-communities to rise.

• Competition is biased in the wrong direction: L2 focuses on use cases that succeed in a narrow financial sense, but at the expense of other goals, achieving only superficial success in the short term.

I’m not claiming to have perfect answers to these questions, but Ethereum is an ongoing experiment and I’m excited about the ecosystem’s willingness to tackle hard problems head on. Many challenges stem from misaligned incentives. The natural solution is to create better ecosystem-wide incentives to foster collaboration. Creating an “infrastructure guild” to augment protocol alliances, which I mentioned in my last post, is one option. Another option is to fund multiple L2 projects that choose to collaborate (i.e. similar to quadratic grants, but with a cross-ecosystem focus). There is a lot of value in expanding on these ideas and continuing to work on Ethereum’s unique strengths as a diverse ecosystem.

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