Vitalik's latest article: L2 is a cultural extension of Ethereum

Original Title: "Layer 2s as cultural extensions of Ethereum"

Author: Vitalik Buterin

Compiled by: Peng Sun, Foresight News

In my recent article about the differences between L1 and L2 scaling, I ultimately concluded that the most important distinction between the two approaches is not technical, but organizational (using the term in a sense similar to the field of "industrial organization"): it is not about what can be built, but about what will be built, how the boundaries between different parts of the ecosystem are drawn, and how this affects people's incentives and agency. In particular, L2-centric ecosystems are inherently more diverse and more naturally encourage a wider variety of approaches to scaling, EVM design, and other technical characteristics.

One key point I made in the previous article is:

Because Ethereum is an L2-centric ecosystem, you can freely build a sub-ecosystem with its own unique features while also being part of the larger Ethereum.

In this article, I believe this is true not only in technical terms but also in cultural terms. Blockchains have not only unique technical trade-offs but also unique cultures. On the day after Ethereum and Ethereum Classic split, the two chains were technically identical. But they were culturally distinct, which helped shape their different focuses, user bases, and even tech stacks eight years later. The same is true for Ethereum and Bitcoin: initially, Ethereum was roughly "Bitcoin with smart contracts," but a decade later, the differences have deepened.

Kevin Pham compared the cultures of Bitcoin and Ethereum in a past tweet from 2017. Both cultures continue to evolve: since 2017, we have seen the rise and fall of the "laser eyes" movement (alongside the rise of movements like Ordinals), and Ethereum has become L2-centric, with both cultures becoming more mainstream. Yet differences remain, and perhaps maintaining these differences is for the best.

What Does Culture Influence?

Culture has effects similar to incentive mechanisms—indeed, culture is part of the incentive mechanism. It influences who is attracted to the ecosystem and who is excluded. It affects the motivations for what actions people take and what actions they can take. It influences what is considered legitimate—whether in protocol design or in the ecosystem and application layer.

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

1. The types of protocol changes—both in 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—including both the number of users and the right types of users

6. The public legitimacy of the ecosystem in the eyes of external communities and participants

If you truly value decentralization in blockchain, even at the cost of inefficiency, then you need to pay attention not only to how much today's technology achieves these goals but also to how much blockchain culture values these goals. If a blockchain's culture does not prioritize curiosity and openness to new technologies, it is likely to fail in both decentralization and speed, as it cannot adopt new technologies like ZK-SNARKs, which can offer higher levels of decentralization and speed. If a blockchain is publicly understood as a "casino chain" without any other connotation, it becomes difficult to attract non-casino applications. Even non-commercial core protocol developers and researchers become harder to attract. Culture matters because it is upstream of almost everything else to some extent.

The Culture of Ethereum

In May 2024, Kenya, Ethereum Developer Meetup. The core development ecosystem of Ethereum is one of its subcultures, but it is also quite diverse and internally divided.

Researcher Paul Dylan-Ennis has spent considerable time exploring and understanding Ethereum's subcultures. He identifies three main subcultures within Ethereum:

• Cypherpunks: Cypherpunks are committed to open-source development and have a certain DIY or punk attitude. In the context of Ethereum, cypherpunks build infrastructure and tools but remain neutral regarding how they are used. Historically, cypherpunks have explicitly emphasized privacy rights, but in Ethereum, privacy is not always prioritized, although… a new cypherpunk movement called lunpunk has emerged, advocating for prioritizing privacy.

• Regens: Many influential voices within Ethereum are dedicated to adopting regenerative or restorative approaches to building technology. Based on Vitalik Buterin's interest in political and social sciences, many regens engage in governance experiments aimed at revitalizing, improving, or even replacing contemporary institutions. This subculture is characterized by its experimental nature and interest in public goods.

• Degens: Users driven purely by speculation and the relentless pursuit of wealth, known as Degens. Degens are financial nihilists who focus on current trends and hype in hopes of striking it rich, escaping the rat race of contemporary neoliberal capitalism. Degens often take significant risks but do so in a sardonic, almost detached manner.

These three groups are not the only important ones, and you could even question how consistent they are as a group: profit-oriented groups and those buying monkey pictures are culturally very different. The term "cypherpunks" encompasses both those interested in protecting people's privacy and freedom as ultimate ends and those who use cutting-edge mathematics and cryptography without any strong ideology. But this classification is still an interesting preliminary approximation.

One important feature of these three groups in Ethereum is that, largely due to Ethereum's flexibility as a developer platform (rather than just a currency), they can each enter some arena where subcultures can take action rather than just talk. A rough approximation is:

• Cypherpunks participate in core Ethereum development, writing privacy software;

• Regens engage in Gitcoin rounds, retrospective public goods funding, and various non-financial applications;

• Degens trade memecoins and NFTs and play games.

In my view, this cultural branching greatly benefits Ethereum. The core development culture of Ethereum values high-quality thinking on advanced cryptography, game theory, and increasingly software engineering, emphasizing freedom and independence, the ideals of cypherpunks, and the blockchainized versions of these principles (such as "immutability"), as well as an idealistic approach that focuses on values and soft power rather than hard power. These values are important and good; based on the cultural influences I listed in the previous section, they position Ethereum very favorably in terms of (1), (2), (3), and to some extent (6). But they are not complete: first, the above description hardly emphasizes the appeal to application developers, and the appeal to users is almost nonexistent: stability-oriented values help provide confidence to those who "use" Ethereum by holding ETH, but that is about it. Cultural diversity is a way to escape this predicament, allowing one subculture to focus on core development while another focuses on developing the "margins" of the ecosystem. But this raises the question: do we have ways to further strengthen this cultural diversity?

Subcultures and L2

This brings me to perhaps the least appreciated characteristic of L2: for subcultures, L2 is the ultimate arena for action. L2 allows subcultures to emerge, with ample resources and feedback loops that compel them to learn and adapt to operate in the real world: attracting users and application developers, developing technology, and building global communities.

Here, the key feature of L2 may be that it is both (i) an ecosystem and (ii) organized around building something. Local meetup groups can form their own ecosystems and often have their unique cultures, but their resources and execution capabilities are relatively limited. Applications can have ample resources and execution capabilities, but they are just applications: you can use them, but you cannot build on them. Uniswap is great, but the concept of "building on Uniswap" is far less compelling than "building on Polygon."

Some specific ways L2 may—and indeed will—achieve cultural specialization include:

• A greater willingness to engage in user expansion or "business development": consciously striving to attract specific external participants (including individuals, businesses, and communities) to engage with the ecosystem.

• Emphasizing diversity of values. Does your community prioritize "public goods," "quality technology," "Ethereum neutrality," "financial inclusion," "diversity," "scalability," or something else? Different L2s will provide different answers.

• Diversity of participants: What kind of people does the community attract? Does it particularly emphasize certain demographics? Personality types? Languages? Continents?

Here are a few examples:

Optimism

zkSync

MegaETH

Starknet

Polygon has achieved success through partnerships with mainstream companies and an increasingly high-quality ZK ecosystem. Optimism has Base and World Chain, with a strong cultural interest in retrospective fundraising and token-based unjust governance concepts. Metis focuses on DAOs. Arbitrum has built a brand around high-quality developer tools and technology. Scroll emphasizes "preserving the essence of Ethereum—trust minimization, security, and open source." Taiko highlights "seamless user experience," "alignment with the community," "security first," and "human-centric." Generally, each Ethereum L2 has a unique "soul": Ethereum culture combines with its unique style.

How Can an L2-Centric Approach Succeed?

The core value proposition of this L2-centric cultural approach is that it attempts to balance the benefits of diversity with cooperation, creating a range of different subcultures that still share some common values and collaborate to realize those values on key shared infrastructure.

Ethereum is trying to take a diversified approach

Similar dual-layer approaches have been attempted before. The most notable example I can think of is the DPoS system of EOS in 2017. EOS's DPoS allowed token holders to vote on which representatives would run the chain. These representatives would be responsible for building blocks and reaching consensus on others' blocks, and they would also receive a significant amount of tokens from EOS issuance. To attract votes, representatives ultimately engaged in extensive community building, with many "nodes" (like EOS New York, EOS Hong Kong) becoming well-known brands.

This ultimately became an unstable system because token voting itself is unstable, and some powerful individuals in the EOS ecosystem turned out to be greedy bastards who misappropriated substantial funds raised for the community for personal gain. However, while it worked, it exhibited an astonishing characteristic: it created powerful, highly autonomous sub-communities that still worked towards a common goal.

EOS New York was one of the top block producers in EOS, and it even wrote a considerable amount of open-source infrastructure code.

When this approach works successfully, it also generates healthy competition. By default, communities like Ethereum naturally tend to unite those who have been in the community for a long time. The benefit of this is that, as the community rapidly grows, it can help maintain the community's values—even if external adverse winds blow, it can reduce the likelihood that Ethereum will no longer care about free speech or open source. However, this can also shift people's focus from technical capabilities to social games, allowing "OG" veterans to maintain solid positions even if they perform poorly, and limiting the ability for cultural self-renewal and development. With healthy "subcultures," these issues can be mitigated: entirely new sub-communities can rise and fall, and those who succeed within sub-communities can even begin to contribute to other aspects of Ethereum. In short, legitimacy from continuity is less, and legitimacy from performance is more.

We can also examine the above story to identify possible weaknesses. Here are a few I can think of:

• Falling into echo chamber effects: Essentially, this is the same failure mode I discussed in the previous article, but in cultural terms. L2s begin to function like independent universes with almost no cross-pollination.

• Falling into a single culture: Whether due to shared human biases or common economic incentives (or an overly unified Ethereum culture), everyone ultimately looks for applications to build in similar places, potentially making the wrong technical choices. Another scenario is that a single L2 or a few L2s become entrenched, with no effective mechanisms left for newcomers and sub-communities to rise.

• The vectors that competition tends to favor are wrong: those secondary institutions that focus on achieving success in a narrow economic sense but sacrifice other goals appear to be successful, and over time, more and more communities move in that direction.

These issues are difficult to say have perfect answers; Ethereum is an ongoing experiment, and part of what excites me about this ecosystem is its willingness to confront difficult problems. Many challenges stem from misaligned incentives; a natural way to address this is to create better incentives for cooperation across the entire ecosystem. The idea I mentioned in the previous article about creating a "Basic Infrastructure Guild" to complement the Protocol Guild is one option. Another option is to explicitly subsidize projects that encourage multiple L2s to collaborate (i.e., similar to quadratic funding but focused on connecting ecosystems rather than individuals). Attempting to expand on these ideas and continuing to leverage Ethereum's unique advantages as a diverse ecosystem holds significant value.