Beam Chain: The End of Layer 2? Exploring the So-Called “ETH 3.0” Proposal

Beam Chain is a consensus layer upgrade proposal introduced by Ethereum Foundation researcher Justin Drake at the Ethereum Devcon conference in November 2024. The proposal aims to enhance Ethereum‘s performance and security by introducing faster block times, reducing validator staking requirements, implementing on-chain SNARKs, and incorporating quantum security improvements. The plan, referred to as “ETH 3.0,” has sparked speculation about its potential to displace Layer 2 solutions. But what’s the reality？

What is Beam Chain？

Beam Chain is a proposal specifically targeting Ethereum‘s consensus layer. It includes the following technical upgrades to improve the network’s performance and security:

1. Faster Block Times: By optimizing the consensus mechanism, the proposal shortens block generation intervals, improving transaction processing speed and user experience.

2. Reduced Validator Staking Requirements: By lowering the threshold for validators, the proposal encourages more participants, enhances decentralization, and strengthens network security.

3. On-Chain SNARKs: The integration of zero-knowledge proof technology (e.g., zk-SNARKs) improves transaction privacy and scalability, reduces on-chain data volume, and enhances network efficiency.

4. Quantum Security Improvements: By adopting quantum-resistant cryptographic algorithms, the proposal aims to mitigate future quantum computing threats, ensuring long-term security.

Analysis

In the early stages of Ethereum, which relied on the Proof of Work (PoW) consensus mechanism, there was no clear distinction between the “consensus layer” and the “execution layer.” At that time, Ethereum‘s architecture was unified, handling all functions on the same layer. However, as Ethereum evolved and transitioned to Proof of Stake (PoS), the community began modularizing its architecture to define distinct functional layers. This modular design has improved the network’s scalability and flexibility.

Ethereum researchers have divided the current Ethereum architecture into three layers:

1. Consensus Layer (Beacon Chain): Maintains the networks consensus mechanism, ensuring the security and consistency of block production and validation processes.

2. Execution Layer (EVM Execution Layer): Handles transaction execution and smart contract operations, managing Ethereums state and account balances.

3. Data Layer: Following the Cancun upgrade, proto-danksharding went live, enabling Layer 2 transaction data to be submitted and stored in the form of blobs.

The Beacon Chain went live on December 1, 2020, and completed the Merge upgrade on September 15, 2022, officially transitioning Ethereum to the Proof of Stake consensus mechanism.

Beam Chain Upgrades

The Beam Chain upgrade focuses exclusively on Ethereums consensus layer, introducing enhancements to block production, staking, and cryptography.

Block Production: Introducing inclusion lists to resist censorship, decoupling validators from the block production process, exploring concepts like execution auctions, and potentially reducing the current 12-second slot time.

Staking: Optimizing the current issuance curve to improve Ethereums overall health, lowering the ETH staking requirement for validators, and achieving faster finality.

Cryptography: Enhancing chain abstraction, quantum security, and implementing strong randomness.

These upgrades aim to make Ethereum more secure and performant.

Beam Chains Impact on Layer 2

The Layer 2 ecosystem experienced FUD (Fear, Uncertainty, Doubt) following the announcement of the Beam Chain proposal, leading to a decline in Layer 2 token prices. But will this Ethereum mainnet upgrade render Layer 2 obsolete？ The answer is a clear no.

Ethereum‘s Layer 2 solutions primarily focus on scaling the execution layer, processing transactions and smart contracts off-chain to improve speed, reduce costs, and alleviate the mainnet’s burden. Beam Chain upgrades target a completely different dimension and do not conflict with Layer 2 development.

Community Reactions

Delphi Ventures founding partner, José Maria Macedo, expressed his disappointment with Beam Chain:

“I was excited about the vision of ETH 3.0, but Justin Drake‘s actual proposal is underwhelming. A restructured codebase with 4-second block times and quantum resistance by 2029-2030 doesn’t make Ethereum Layer 1 competitive or compelling enough. The Ethereum Foundation needs bigger dreams.”