As blockchain technology gains mass adoption, first-layer (L1) networks face a critical trade-off: decentralization gives way to speed and efficiency. This statement was made by Injective CEO Eric Chen, and I fully share his concern.
As users demand ever higher throughput and instant transactions, developers of L1 networks are forced to make concessions. Centralization certainly simplifies the scaling process: consolidating nodes or implementing stricter consensus mechanisms allows processing thousands of transactions per second. However, this comes at a cost — creating a single point of failure, which directly contradicts the fundamental principle of cryptocurrencies.
Eric Chen rightly notes that concentrating power in the hands of a limited number of validators or infrastructure providers makes the network vulnerable to censorship, attacks, and collusion. This is especially dangerous in an environment where DeFi protocols and applications hold billions of dollars in liquidity.
As an alternative, Chen proposes seeking solutions through dedicated zones and second-layer (L2) networks. This approach allows maintaining high performance without compromising the decentralization of the base layer. L2 solutions, such as sidechains or rollups, take on the load, leaving the L1 blockchain the role of a reliable and decentralized arbiter.
My analysis: The market is already observing this trend — Solana and BNB Chain are often criticized for excessive centralization, while Ethereum is betting on L2. However, the problem lies not only in technology but also in economic incentives. If users choose speed at the expense of security, we risk ending up with a "crypto-Web2," where control is once again concentrated in the hands of a few. The real value of blockchain lies in trust without intermediaries, and sacrificing this for seconds of savings is a dangerous path.