Let’s look at some quick numbers.

Facebook experiences 30,000+ Likes / Comments per second, the Nasdaq sees 20,000+ trades per second, and MMO games like PlayerUnknown’s Battlegrounds handle over 1M concurrent users updating game state.

It would only take a few dozen apps and games of this size before you’re exceeding one million TPS in aggregate.

And then what do you do when the number of users doubles?

Clearly trying to run every single DApp on the same chain is not a practical approach.

It doesn’t matter if a blockchain can do a thousand transactions per second or a million transactions per second — no single blockchain will be fast enough to handle all the world’s decentralized applications on the same chain.

Scaling has to occur on Layer 2

The solution is obvious — these applications will need to be split up across multiple blockchains.

We realized this early on at Loom, when we presented the idea of application-specific sidechains. We foresaw that eventually some decentralized applications would grow popular enough to reach even 1/10th of Facebook’s scale, and the only possible way to run them would be on their own dedicated chains.

Of course, if you put these DApps that require thousands of transactions per second on their own standalone blockchains, they would be vulnerable to the same issues we discussed above in “Why Decentralization Matters.”

But if you put them on a sidechainto a blockchain that is sufficiently decentralized (like Ethereum) — you get the best of both worlds.

Sidechains provide higher scalability without sacrificing security

A sidechain can use a different consensus algorithm (like DPoS) optimized for DApps that require very high TPS or low-latency, while storing any tokens or data requiring a high level of security on the main chain.

This way, even though the sidechain is less decentralized than the main chain, the amount of trust required by users is minimized, since they have the option to move anything of real value to the main chain for safe keeping. (Even more so if you secure the Layer 2 assets with Plasma Cash).

By putting your DApp on a sidechain to a decentralized mainnet, you get all the benefits of higher scalability offered by a faster blockchain, while maintaining the same trust and security guarantees provided by the decentralized base layer.

Spencer, in his article, arrives at the same conclusion we came to:

The path forward: Highly decentralized base layer with increased centralization (and efficiency) on higher layers

And in fact, this seems to be the same model envisioned by Vitalik Buterin himself:

You could run StarCraft on the blockchain. Those kinds of things are possible. High level of security and scalability allows all these various other things to be built on top. Ethereum is a secure base layer that doesn’t have too many features.

~Vitalik Buterin

Ethereum provides a secure base layer for Layer 2 solutions to build on top of

Now we understand that:

1. Scaling needs to happen on Layer 2
2. The most important property of a Layer 1 is decentralization

So the real question is, if not Ethereum, what base layer would you build your Layer 2 on top of?

We’ve already seen that very few chains do decentralization as well as Ethereum does.

According to a recent ConsenSys report, there are “just under 17,000 nodes running the Ethereum blockchain across six continents, making it the most decentralized blockchain platform in existence.”

And any additional features another blockchain might offer, such as higher throughput, gas-less transactions, low-latency transactions, etc., can simply be implemented as Layer 2 services on Ethereum.

In fact, those features are exactly what we’re building at Loom Network with ZombieChain — a Layer 2, gas-free, low-latency DPoS sidechain to Ethereum.

And that’s just one of many Layer 2 scaling solutions under development.

It’s hard to fathom why a developer would want to replace Ethereum instead of simply building on top of it