Ronin's return to the Ethereum ecosystem and the future ecological trends of Ethereum

Recently, the well-known blockchain for chain games, Ronin, announced a significant shift, returning to the Ethereum ecosystem, transitioning from its current Ethereum sidechain to an Ethereum Layer 2 solution.

This shift has important implications for Ronin itself, for the Ethereum ecosystem, and for the development of Layer 1 (L1) blockchain ecosystems.

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

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 an Ethereum Layer 2 solution, 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 United States, 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, with Ethereum as the federal government.

Why is Ronin making this transition?

The official announcement has made it very clear:

For example, 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 has not thoroughly addressed—that is, the security maintenance of the blockchain is more appropriately and reliably entrusted to Ethereum.

Ronin is not the first sidechain to return to Ethereum. Over the years, projects like Celo and Cronos, which were once Layer 1 blockchains, have also returned to Ethereum, transitioning from Layer 1 to Ethereum Layer 2. However, because their ecosystems were not strong enough and their influence was not significant, their impact on the overall ecosystem is not as great as that of Ronin.

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, when the ecosystem of a chain becomes stronger and the economic benefits become more enticing, the consensus mechanisms of general blockchains cannot withstand hacker attacks, and they may not even be able to ensure their own uptime.

Currently, the only blockchains that have advantages in this area and have been historically tested 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, more and more projects, as they grow to a certain extent and have higher demands for security and ecosystem diversity, will undergo similar transitions, moving from existing sidechains or Layer 1 blockchains to Ethereum Layer 2 solutions.

This leads me to a viewpoint:

In my opinion, apart from a very small number of projects that may (only may) need to build a separate Layer 1 blockchain/sidechain, 99% of projects (including the current batch of new projects planning to build their own Layer 1 blockchains) have no need to do so; building an Ethereum Layer 2 solution is the most appropriate option.

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 epidemic, decaying ideologies permeating society, certain minority groups with low social status, irreconcilable racial conflicts and tensions, homeless people without clothing or food, and a vast disparity between the rich and the poor…

We also know that there is another type of country on this planet—like our neighbor to the northeast. There, there is a caring leader who provides meticulous attention, a people who feel endless gratitude, and free education, healthcare, and housing…

However, if forced to choose between these two countries, I believe many people would still prefer the US.

Ethereum is like the US in the crypto ecosystem.

Many people are extremely dissatisfied with it, believing there are problems here, issues there, that it doesn't meet their needs, or that it lacks 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 after another, new Layer 1 blockchains emerge in the crypto ecosystem.

This is akin to many people being dissatisfied with the US, claiming it is too evil and too flawed, wanting to build a new nation, a paradise on earth, but in reality, what they create are one neighbor after another like the one to our northeast.

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

In fact, there are two approaches to this situation:

One is that the US is indeed bad, and I want to build a new country, even if what I end up building are countries like our neighbor to the northeast.

The other is to reform from within the US—rebuilding a new state, a new 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, attracting entrepreneurs from the federation and other countries to come here to start businesses 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 solutions based on Ethereum.

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