He stated that Layer 3 solutions cannot consist of stacked rolls, which will not result in effective data compression.
Rollups, in short, are transactions at the second level of scaling but whose information is stored in smart contracts at the first level. In short, keep an intelligent face and pretend to understand unless you are a blockchain dev.
Ethereum's core network currently has a throughput of about 15 transactions. In November 2021, users paid up to $62.11 to exchange tokens, a transaction that now costs about $1.36.
Level 2 scaling solutions, called "rollups," were designed to alleviate this problem. Rollups transfer the computational data of a transaction to another chain and then publish an easily verifiable cryptographic proof of transaction to the Ethereum network.
Buterin has previously stated that rollups can help Ethereum reach throughputs of 100,000 transactions per second. Arbitrum, Optimism, StarkNet, and zkSync are all examples of rollups.
Buterin also said that no matter how layer 3 solutions are built, they will allow sub-ecosystems to evolve within layer 2. If you feel like you've read your dissertation, that's OK because the blockchain is a complicated thing...