Layer 1 vs layer 2 loops is a giant paradox.

Reading the Ethereum whitepaper, Ethereum's original thesis was Bitcoin + Looping Script. Bitcoin can do very basic smart contracts, but was intentionally limited by Satoshi because he didn't want to create an incentive for people to spam the network with programmable loops and DDOS the network. With Ethereum, Vitalik was trying to make a version of Bitcoin that could perform looping smart contracts, and in order to do so invented the "Gas" fee system. Loops in programming is the idea of running a piece of code an infinite amount of times, so it allows for great computational achievement, but also is a gaping security hole in a decentralized network. Ethereum's gas system was created to prevent spam attacks by making the attacker pay for per mile the bandwidth they consume. Meaning, if you want to spam Ethereum for a long period of time, you are going to spend a ton of money to do it. High fees are actually the feature in this system, not the bug. The high fees protect the network from Sybil Attacks and was the tradoff Ethereum sacrificed to achieve turing completeness.

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With loops, Ethereum's Solidity programming language can perform any computational calculation without pausing. That concept is called Turing Complete. Turing Completeness allows for the network to host all of the complex defi applications that are on Ethereum. Bitcoin Script starts and stops after every function, which is why you do not see complex smart contracts on the Bitcoin network.

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But...while Ethereum can certainly do more things on the base layer, Bitcoin now has those same looping features on layer 2s platforms like Stacks. Bitcoin Maximalists would say that Bitcoin Layer 2 renders the value proposition of Ethereum to be pointless....And while true, Stacks can do everything Ethereum does, it's not a perfect marriage. Stacks does use the security of Bitcoin, but there isn't very much talking between Stacks and Bitcoin, currently...however, the Taproot update that's coming in a few weeks will change that with the addition of Schnoor signatures.

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Ethereum is facing a paradoxical conundrum itself with its relationship with Matic. Ethereum can not scale on the base layer due to high fees, so users are shifting to Matic. Matic essentially is a layer 2 sidechain like Stacks, but aims to perform smart contracts on Ethereum in a faster and cheaper way. What's the point of using Ethereum layer 1 when you can just use Matic layer 2? Why even try to have loops on layer 1 if we were just going to use layer 2 loops anyways? Why engineer the entire protocol around the idea of looping on Layer 1 if layer 1 wasn't going to be the layer used for loops? Ethereum made great sacrifices to scalability when implementing the gas system, and those sacrifices now seem pointless. Now that Bitcoin layer 2 will be on par with Ethereum layer 2, it just seems like the entire value proposition of Ethereum is ruined.