The Future of L1s Is as Settlement Layers for ZK Proofs

General-purpose L1s like Ethereum are inefficient for high-throughput execution, creating a fee market for simple swaps and slow finality for users. Their primary value—decentralized consensus and security—is diluted by competing for block space with every DeFi transaction.

• High Latency: ~12-15 second block times for user actions.
• Inefficient Capital: Validators securing billions in TVL spend cycles on meme coin trades.

Ethereum's role is evolving into a settlement and data availability layer where its consensus verifies succinct ZK proofs from rollups like zkSync, Starknet, and Polygon zkEVM. This separates execution security from settlement security.

• Batch Finality: Thousands of L2 transactions settle as one proof in ~20 minutes.
• Capital Efficiency: Validators secure value, not compute, optimizing the security budget.

Modular architectures separate settlement from data availability. Celestia provides a neutral, scalable DA layer, allowing L2s to post cheap data blobs and use any L1 (like Ethereum or Cosmos zones) for settlement. This creates a multi-settlement future.

• Cost Reduction: DA costs are ~100x cheaper than calldata on Ethereum L1.
• Sovereign Rollups: Chains control their own settlement logic and fork choice.

The settlement stack is itself modularizing. EigenDA provides high-throughput, Ethereum-restaked DA. Emerging prover markets (e.g., Risc Zero, Succinct) allow any chain to outsource ZK proof generation, turning settlement into a commodity service.

• Restaked Security: Leverages Ethereum's $15B+ restaking ecosystem.
• Prover Competition: Drives down proof generation costs and latency.

A multi-L2, multi-settlement-layer world fragments liquidity and user experience. Moving assets between Arbitrum, Base, and a zkRollup requires complex bridging, creating security risks and capital inefficiency.

• Siloed TVL: Liquidity pools are replicated, not shared.
• Bridge Risk: ~$2B+ has been stolen from cross-chain bridges.

The endgame is unified settlement layers and shared sequencers. Projects like Espresso Systems and Astria propose decentralized sequencers that order transactions for multiple rollups, enabling atomic cross-rollup composability settled on a common L1.

• Atomic Composability: A single transaction can span Optimism, Arbitrum, and a zkRollup.
• Unified Liquidity: Shared sequencing enables native cross-rollup AMMs.

Each new ZK-rollup (e.g., zkSync, Starknet, Polygon zkEVM) creates its own isolated liquidity pool. This defeats the core value proposition of a unified settlement layer.

• User Experience: Bridging between L2s adds friction and latency.
• Capital Inefficiency: $1B+ TVL can be locked across dozens of chains, unable to interact.
• Security Dilution: Smaller L2s may compromise on decentralization for speed, creating systemic risk.

Projects like Espresso Systems and Astria are building shared sequencers. RiscZero and Succinct are creating generalized prover networks. This abstracts execution from settlement.

• Atomic Composability: Enables cross-rollup transactions without bridging.
• Economic Security: Sequencer and prover markets create competitive, shared security layers.
• Developer Focus: Teams can build execution environments without bootstrapping a full stack.

If execution and sequencing are abstracted, the L1's value is reduced to data availability and finality—a race to the bottom on cost. Celestia and EigenDA already compete on DA.

• Fee Pressure: L1 transaction fees could plummet, threatening validator economics.
• Winner-Take-Most: A single ultra-cheap DA layer (e.g., Avail) could dominate.
• Protocol Slippage: High-value DeFi may never repatriate to the L1, leaving it as a costly backstop.

Ethereum's path is to embed ZK-tech natively via EIP-4844 and Verkle Trees, making it the most secure and integrated settlement layer. Polygon, Scroll, and Taiko are betting on this.

• Native Integration: ZK-EVMs like Polygon's zkEVM use Ethereum for both DA and settlement, minimizing fragmentation.
• Staking Derivatives: L1 staked ETH becomes the collateral for shared sequencers (e.g., EigenLayer).
• Regulatory Moats: The most decentralized L1 becomes the only viable settlement layer for institutional assets.

Monolithic L1s like Ethereum are forced to be jacks-of-all-trades, compromising on throughput and cost for security. This creates a ceiling for scalable applications.

• High Latency: ~12-15s block times limit UX.
• Cost Volatility: Base fees spike with network congestion.
• Resource Contention: Every dApp competes for the same global block space.

L1s shed execution and become pure settlement layers. Validity proofs (ZKPs) from rollups like zkSync, Starknet, and Polygon zkEVM batch and verify trillions of computations off-chain.

• Security Inheritance: L1 guarantees correctness via cryptographic proof verification.
• Throughput Unlocked: ~2000+ TPS per rollup, scaling horizontally.
• Deterministic Cost: Settlement cost is decoupled from execution complexity.

Competition shifts from TPS to attracting the most valuable state. The winning settlement layers will be those with the deepest liquidity and strongest economic security.

• Liquidity is Protocol: Native assets (ETH, etc.) become the base money for cross-rollup bridges and DeFi.
• Finality as a Service: Fast, cryptographically guaranteed finality enables new financial primitives.
• Fee Market Evolution: Fees are driven by proof verification and data availability, not simple transfers.

The application layer moves to rollups and L2s. Builders must architect for a multi-chain settlement future using interoperability standards.

• Portfolio Design: Use EigenLayer for shared security, Celestia/Avail for modular DA.
• Intent-Centric UX: Abstract chains via solvers and aggregators like UniswapX and CowSwap.
• Settlement-Agnostic Logic: Core business logic should be deployable to any ZK-rollup settlement cluster.

Value capture migrates from L1 gas to the settlement and proving infrastructure. The new investment surface is in proof systems, sequencing, and interoperability.

• Prover Economics: Companies like Risc Zero and Succinct monetize proof generation.
• Sequencer Cash Flows: Rollups with centralized sequencers capture MEV and transaction fees.
• Interop Premium: Protocols like LayerZero and Axelar that securely connect settlement layers become critical plumbing.

Ethereum's roadmap (Danksharding, PBS) is a deliberate pivot to optimize for this role. Its massive economic security and developer mindshare make it the default anchor.

• Danksharding: Scales data availability for hundreds of rollups concurrently.
• Proof Aggregation: EIP-4844 and future upgrades make proof verification ultra-cheap.
• Irreducible Core: The L1 becomes a minimal, robust judge for the entire ZK ecosystem.