Addressing Ethereum’s Fragmentation Challenge

The Ethereum ecosystem stands at a pivotal moment. Over the past four years, scaling challenges have been resolved through Layer-2 (L2) solutions, rollups, and technological advancements, leading to an increase from 15 transactions per second to thousands, with costs dropping from $50 per swap to mere cents. This rollup-centric strategy has proven effective, perhaps too effective.

This success has led to an unexpected challenge: fragmentation. With over 50 L2s and more in the pipeline, Ethereum is transforming into a labyrinth of isolated chains. Users now have to manage multiple networks, bridge assets, and navigate convoluted processes for basic operations.

The irony? While transactions may be faster and cheaper, the overall user experience is lacking!

The Cost of Fragmentation

Fragmentation is not just a minor setback; it poses a significant threat to Ethereum’s future. Users face the overwhelming challenge of managing diverse networks and executing complicated processes. A simple task, such as purchasing a token, could necessitate switching networks, bridging assets, and multiple transactions, each step adding friction, confusion, and risk of error.

The impact on liquidity is notably severe. Capital becomes trapped in isolated silos, diminishing market efficiency and increasing costs for all participants involved. DeFi protocols struggle to maintain sufficient liquidity across multiple chains, forcing users into poorer prices and complex multi-step processes.

For developers, this scenario is equally daunting. Deciding which L2s to support, managing multiple deployments, and constructing intricate bridging infrastructures stifles innovation and raises barriers for new projects.

ERC-7683: A Unified Ethereum Standard

To address these issues, our team at Across, in collaboration with Uniswap Labs, has proposed ERC-7683, a standard enabling Web3 applications to express complex multi-step cross-chain transactions as a single user request executed by a shared network of relayers. By standardizing requests, ERC-7683 allows any cross-chain action within the Ethereum ecosystem to operate as smoothly as if it were on a single chain.

ERC-7683 has received extensive community feedback and is widely supported by over 50 protocols, including major projects like Arbitrum, Base, and Optimism, backed by the Ethereum Foundation’s L2 Interop working group.

At its core, ERC-7683 simplifies cross-chain operations. Instead of manually navigating network switches and bridges, users articulate their goals. For instance, swapping tokens on Base using funds from Arbitrum can become a one-click process, with a network of competitive solvers fulfilling these intents swiftly.

This intent-based architecture separates user desires from execution mechanics, alleviating the need to understand or engage with bridges. The outcome is a “home base” experience where users can interact with the entire Ethereum ecosystem as if it were one unified chain.

Critics may argue that users don’t care about cross-chain mechanics; they just want functionality. They are right. That’s exactly where ERC-7683 becomes essential. It allows developers to abstract chain complexities while still harnessing the scale and efficiency of a multi-chain environment, providing users with the simplicity of a single chain combined with the power of many.

ERC-7683 is not merely theoretical; it has already been implemented through Across, which has processed over $18B in cross-chain volume. The standard builds upon years of development of Across’s solver network, expanding it into an open framework that others can utilize.

A Vision for 2025: One Ethereum

Visualize Ethereum in 2025: Users access their wallets and view assets across every chain in a single interface. They engage with any application on any L2 without concerns about bridging or network transitions. Developers can create applications once and reach users across the board seamlessly. Liquidity flows unobstructed throughout the ecosystem, maximizing capital efficiency and lowering costs.

This isn’t merely a vision—it is becoming achievable. ERC-7683 provides the cross-chain execution speeds necessary for seamless experiences. By standardizing cross-chain interactions, it paves the way for a new generation of applications that regard the entire Ethereum ecosystem as their operational canvas.

Moving Beyond Technology: The Path to Mainstream Adoption

While ERC-7683 is fundamentally a technical standard, its implications reach beyond just technology. By addressing fragmentation, it tackles one of the major obstacles to widespread adoption. DeFi becomes more approachable when users are no longer required to navigate through L2s and bridges. Liquidity improves as assets traverse seamlessly across marketplaces. Governance engagement becomes more inclusive, allowing users to vote from any network.

This unified experience positions Ethereum to remain at the forefront as the leading Web3 protocol. Unlike other chains optimizing for speed within a single network, Ethereum is crafting a cohesive ecosystem that blends the advantages of specialized L2s with the simplicity of one chain.

The Time to Act is Now

ERC-7683 has garnered substantial support from over 45 teams, including Arbitrum, Base, Optimism, Polygon, and zkSync, reflecting the Ethereum community’s commitment to confronting fragmentation. Unified standards, shared infrastructure, and collaboration are vital to overcoming these challenges.

With rapid L2s, account abstraction, and intent-based bridging already established, ERC-7683 integrates these advancements into a unified standard, paving the way for Ethereum’s next chapter.

We cannot permit fragmentation to impede Ethereum’s momentum. Embracing ERC-7683 is crucial for cultivating a unified, accessible ecosystem. L2s, developers, and the broader community are called upon to adopt this standard to unleash Ethereum’s full potential as a scalable and integrated system by 2025.

Let’s make it happen.