Basic network pressures for level 1 decentralized
Coinbase's layer 2 chain, Base, will begin decentralizing to level 1 by deploying error proofs on the Base Sepolia testnet. The Base network is centralized because only the operator can provide network status to the Ethereum mainnet. Error proofs allow anyone to submit Base's state and start the transition to a decentralized package.
In the year On July 23, 2024, the base network operator announced the deployment of error proofs for the Base Sepolia testnet to run and test applications and code before deployment on the main network.
According to Basse's social media post on Web3's social media platform Mirror, “The launch paves the way to safely bring error proofs to the network and complete other steps to achieve Phase 1 decentralization.”
Error proofs allow anyone to submit the root state of Base. This technical term ensures that the Base chain summary, including smart contracts, account balances, and other relevant information, is recognized by the Ethereum mainnet.
A journey to level 1 decentralization
According to Ethereum co-founder Vitalik Buterin, a Layer 2 stack must go through three major processes before it can be deemed decentralized enough, or “take off their training wheels.”
The first level (level 0 or full training wheels level) is when you start your layer 2 package mainnet. At this stage, users must post transactions without cooperation from the operator, meaning chain operators cannot block users' assets. However, no proof of fraud is required.
The next level is Level 1, a decentralized, limited training wheels level, and should include tamper proof. The proof system may have a multi-sig revocation mechanism (called a security council) that overrides the fraud proof in case of code errors. However, 6 out of 8 or more must have a strict threshold ie at least 8 participants and at least 75% agreement to cancel.
Also, in a multi-sig cancellation system, enough participants must be outside the organization running the package, in this case Base (and Coinbase by association).
The final level, level 2 or no training wheel, requires that no actor or group of actors can override the fraud evidence to post a state other than the output of the network code. However, this is recommended only when the fraud verification code has been verified to be bug free.
Base trip
Base is currently the second largest Layer 2 package at $1.76 billion in TVL as Depilama, a leading blockchain data provider. The network has grown significantly in 2024, using the relationship with Coinbase to create a network effect that will drive its growth.
Base's move to Level 1 decentralization will help solidify its position in the league of other networks, a few of which are Arbitrum, OP Mainnet, and dYdX v3.
Other chains that have reached this stage have issued management tokens, however, as of writing, Base expects not to issue tokens in the future.
