Recently, the well-known blockchain for chain games, Ronin, officially announced a significant shift back to the Ethereum ecosystem, transitioning from its current status as an Ethereum sidechain to a Layer 2 expansion of Ethereum.

This transition holds important significance for Ronin itself, for the Ethereum ecosystem, and for the development of Layer 1 blockchain (L1) ecosystems.

Before exploring this significance, let's first understand the difference between sidechains and Layer 2 expansions.

The distinction between the two can be likened to the differences in relationships between entities in real life.

Currently, Ronin is an Ethereum sidechain. This relationship can be compared to an alliance between two countries, similar to the relationship between the UK and the US—where the UK largely follows the US in most positions and ideologies, with the US being the dominant force, but both countries maintain their own sovereignty and relative independence.

In the future, when Ronin transitions to a Layer 2 expansion of Ethereum, the relationship can be likened to that between a US state and the federal government, such as California and the federal government—California has significant discretion and freedom in many areas, but no matter how free it is, it is still just a part of the US and is constrained by the federal government in certain key aspects, especially as California's security relies entirely on the federal government.

In the future, Ronin will be akin to a state, while Ethereum will be the federal government.

Why is Ronin making such a transition?

The official announcement has made it very clear:

For instance, Ethereum has greatly improved in efficiency and performance, which can meet the future development needs of the Ronin ecosystem; Ethereum has a more complete and richer ecosystem…

In addition, there is a more important aspect that the official statement did not elaborate on thoroughly—namely, that the maintenance of blockchain security is more appropriately and reliably entrusted to Ethereum.

Ronin is not the first sidechain to return to Ethereum. Over the years, former Layer 1 blockchains like Celo and Cronos have also returned to Ethereum, transitioning from Layer 1 blockchains to Layer 2 expansions of Ethereum. However, their impact on the overall ecosystem is not as significant as Ronin's due to their weaker ecosystems and lesser influence.

The fundamental reasons for these projects returning to Ethereum are similar to those of Ronin: relying on Ethereum's existing rich ecosystem and utilizing Ethereum's security mechanisms.

Especially the point of "utilizing Ethereum's security mechanisms" is quite important for many blockchains. However, this aspect is often not thoroughly considered when many projects choose to build their own Layer 1 blockchains. They underestimate the challenges of building a Layer 1 chain, mistakenly believing that selecting a consensus mechanism, adding some customized algorithms, and calling it "more suited to their needs," then running a few nodes is sufficient.

In reality, as the ecosystem of a chain becomes stronger and the economic incentives become more enticing, the consensus mechanisms of general blockchains are often unable to withstand hacker attacks, and they may not even be able to ensure their own uptime.

Currently, the only blockchains that have advantages in this regard and have been tested by history are Bitcoin and Ethereum. Of course, they also experienced various incidents in their early days, but they were fortunate to quickly resolve those issues in that primitive era and swiftly crossed that threshold. For later entrants, catching up has become nearly impossible.

I believe that in the future, as more and more projects grow to a certain scale and their demands for security and ecosystem diversity increase, similar transitions will occur, moving from existing sidechains or Layer 1 blockchains to Layer 2 expansions of Ethereum.

This leads me to a viewpoint:

In my opinion, aside from a very few projects that may (only may) need to build a separate Layer 1 blockchain/sidechain, 99% of projects (including the current batch of new projects preparing to build their own Layer 1 blockchains) have no need to do so; building a Layer 2 expansion on Ethereum is the most suitable solution.

Over the years, when I write articles, I often have readers asking me in the comments: What do you think of XXX blockchain (most of which are Layer 1 blockchains)?

In the early years, I used to respond to these questions, albeit more bluntly, but now I rarely reply. The reason is the one mentioned above.

To explain this reason, I think using the example of countries is more illustrative.

We all know that American imperialism is very evil. That country has rampant gun violence, a drug crisis, decaying ideologies permeating society, certain minority groups with low social status, irreconcilable racial conflicts and divisions, homeless people without clothing or food, and a significant wealth gap…

We also know that there are other types of countries on this planet—like our neighbor to the northeast. There, there is the meticulous care of a benevolent leader, endless gratitude from the people, and free education, healthcare, and housing…

However, if one were forced to choose between these two countries, I believe many would still find the US to be better.

Ethereum is like the US in the crypto ecosystem.

Many people are extremely dissatisfied with it, believing there are problems here, inconsistencies there, and that it does not meet their needs or efficiency…

Are these views correct?

Of course, they are.

Then, these people say that since Ethereum does not meet their ideals or needs, they might as well build another Layer 1 blockchain that is better, more suitable, and more efficient than Ethereum…

Thus, one new Layer 1 blockchain after another emerges in the crypto ecosystem.

This is akin to many people being dissatisfied with the US, claiming it is too evil and too flawed, and wanting to build a new nation, a paradise on earth, but in reality, what they end up constructing are countries resembling our neighbor to the northeast.

In this situation, does the world become better or worse?

In fact, there are two approaches to this situation:

One is to insist that the US is bad, and to build a new country, even if the result is a series of nations like our neighbor to the northeast.

The other is to reform from within the US—rebuilding a new state or territory, recognizing the values of the founding fathers, adhering to its constitution, relying on its national defense capabilities, joining that great federation, and creating a vibrant, hopeful new entity within the federation that attracts entrepreneurs from both the federation and other countries to start their ventures and realize their ideals.

In the crypto ecosystem, the first approach can be likened to continuously building new Layer 1 blockchains; the second approach can be likened to building new Layer 2 expansions based on Ethereum.

I believe the second method is the more ideal and ultimately feasible approach in the crypto ecosystem.

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