Layer 2 Network Scroll Launches Euclid Upgrade in Major Decentralization Push

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The Ethereum layer-2 scaling solution Scroll has officially rolled out its Euclid upgrade, marking what the team describes as the network’s “biggest leap forward” since inception. This pivotal update transitions Scroll from a “stage 0” to a “stage 1” zero-knowledge (ZK) rollup, signaling a major step toward full decentralization and enhanced security.

Despite this technological milestone, Scroll faces mounting challenges: its total value locked (TVL) has plummeted to a record low of $62.6 million—down 94% from its all-time high above $900 million. The decline began shortly after a key snapshot for its SCR token airdrop was taken in October 2024, raising questions about user retention and long-term ecosystem engagement.

Still, the Euclid upgrade demonstrates Scroll’s commitment to pushing the boundaries of ZK rollup technology, improving performance, application compatibility, and wallet accessibility through advanced features like account abstraction.

What Is the Euclid Upgrade?

At its core, the Euclid upgrade represents a fundamental protocol transformation designed to enhance multiple aspects of the Scroll network:

Perhaps most importantly, Euclid marks Scroll’s formal transition into a stage 1 rollup, a classification first proposed by Ethereum co-founder Vitalik Buterin in 2022. This framework evaluates rollups based on their level of decentralization, particularly around transaction sequencing and censorship resistance.

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From Stage 0 to Stage 1: A Decentralization Milestone

In the early days of layer-2 development, most networks relied on centralized components—referred to metaphorically as “training wheels”—to ensure stability and efficiency. These include:

While useful during initial phases, such features compromise decentralization. Buterin’s stage-based model aims to encourage transparency and set clear benchmarks for when a rollup can be considered truly trustless.

A stage 1 rollup must meet key criteria:

With Euclid, Scroll now meets these standards. The upgrade decentralizes its sequencer network, eliminating the possibility of unilateral intervention by the Scroll team. This means no single party—including the core developers—can theoretically censor or manipulate transaction flow.

Scroll claims it is now the first ZK rollup to achieve stage 1 status, joining an elite group that includes Arbitrum, Optimism, Unichain, Ink, and Kinto, as recognized by analytics platform L2Beat.

Why Account Abstraction Matters for Users

One of the standout features introduced in the Euclid upgrade is expanded support for account abstraction (AA)—a paradigm shift in how crypto wallets operate.

Traditionally, wallets are controlled solely by private keys. If you lose access, your funds are gone forever. With account abstraction, wallets become smart contracts, enabling programmable functionality such as:

For developers, AA opens new possibilities for building intuitive, consumer-friendly applications without requiring users to understand complex crypto mechanics.

For everyday users, this means interacting with Web3 feels more like using modern apps—secure, seamless, and forgiving of human error.

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The TVL Dilemma: Innovation Amid Declining Activity

Despite achieving a major technical milestone, Scroll’s on-chain metrics tell a different story.

According to DefiLlama, total value locked on Scroll has dropped to just $62.6 million, a staggering 94% decline from its peak. User activity mirrors this trend, with daily active addresses and transaction volume hitting multi-month lows.

This downturn began around October 18, 2024, coinciding with the airdrop eligibility snapshot for the SCR governance token. Historically, many layer-2 networks experience a post-airdrop exodus as speculative users withdraw funds after claiming tokens—a phenomenon sometimes called “airdrop farming.”

However, retaining users beyond incentives remains a critical challenge for emerging ecosystems.

While technological advancement is essential, long-term success depends on cultivating a vibrant developer community, launching compelling dApps, and offering real utility beyond low fees.

FAQ: Understanding Scroll’s Evolution

What does “stage 1 rollup” mean?

A stage 1 rollup is a layer-2 network that has removed centralized safeguards and achieved censorship-resistant transaction processing. It ensures no single party can block or alter transactions, increasing trustlessness and alignment with Ethereum’s decentralized ethos.

Why did Scroll’s TVL drop so sharply?

The decline started after the SCR token airdrop snapshot in October 2024. Many users likely participated only to claim tokens and then withdrew their funds—a common pattern across crypto airdrops. Low post-airdrop engagement suggests ongoing challenges in ecosystem retention.

Is Scroll fully decentralized now?

While Euclid marks a major step toward decentralization—especially in sequencing—the network may still have other centralized elements. True full decentralization typically evolves over multiple upgrade phases.

How does account abstraction improve wallet security?

Account abstraction allows wallets to be governed by smart contracts instead of just private keys. This enables features like social recovery, multi-signature controls, and automated breach responses—making wallets more resilient to loss or theft.

What makes ZK rollups different from other layer-2 solutions?

ZK rollups use zero-knowledge proofs to bundle thousands of transactions off-chain and submit cryptographic proof to Ethereum. This offers stronger security guarantees than optimistic rollups, which rely on fraud detection windows.

Can other networks integrate Euclid’s upgrades?

While Euclid is specific to Scroll, its innovations—particularly in decentralizing ZK rollup sequencers—may inspire similar upgrades across other ZK-based chains aiming for stage 1 compliance.

The Road Ahead for Scroll

The launch of Euclid positions Scroll as a pioneer in advancing ZK rollup decentralization. By achieving stage 1 status, it not only fulfills a long-standing vision within the Ethereum community but also sets a new benchmark for what users should expect from secure, trustless layer-2 networks.

Yet technology alone isn’t enough. To reverse declining engagement, Scroll must now focus on:

The next phase won’t be measured in protocol upgrades alone—but in active users, thriving dApps, and real-world adoption.

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Final Thoughts

Scroll’s Euclid upgrade is undeniably a landmark achievement—one that reinforces its role at the forefront of ZK innovation. As the first stage 1 ZK rollup, it has set a precedent others will follow.

But in a competitive landscape crowded with layer-2 contenders—from Arbitrum and Optimism to emerging modular chains—technical leadership must be matched by ecosystem momentum.

For developers and users alike, Scroll offers a glimpse into a more scalable, secure, and user-friendly Web3 future. Whether it can translate that vision into lasting growth remains the ultimate test.

Core Keywords: Scroll, Euclid upgrade, ZK rollup, layer 2, account abstraction, decentralization, TVL, Ethereum scaling