As far as I'm aware, there is also no trustless off-chain scaling solution that exists yet.
The closest you might come to this would be FediMint, which requires you to trust your guardians. Lightning addresses payment scaling, but not user scaling.
Let's not confuse things here. Lightning may not enable 5bn people to settle their balance on-chain, but it definitely is trustless. There should be no doubt about that.
I've yet to study more about sidechains such as Liquid, so I can't say whether those off-chain solutions are trustless, but I'm relatively confident they are; otherwise nobody would use them.
I'd posit that it is not possible to implement user scaling (to say 1 billion users) off-chain in a trustless fashion with the current bitcoin protocol, since any 1-of-N fallback (e.g. the ability to close an LN channel) relies on the assumption that on-chain transactions are not cost prohibitive for most individuals, which they will be when there are 1 billion users.
That's an interesting thought; I understand where you're coming from. One could argue (similar to the question 'what to do after the block subsidy ends in 2140') that it's a problem for later and that it's pointless to put in time looking for solutions right now.
Another reply I can give you is that there are ideas, theories and models (not sure whether also prototypes) for an even higher layer. The high-level idea is that there will never be 5bn Lightning operators, but merely a few thousand (like now) who can also settle on-chain if needed. Common users would operate on an even higher layer, using Lightning as the settlement layer.
For example, if your life savings are 1,000,000 sats - say $10,000 in today's money - and a single on-chain transaction is 100,000 sats - $1,000 in today's money - then using LN is basically untenable.
In the scenario I described above then, you would not create or open Lightning channels with 1m sats, but be a higher-level user that merely uses such channels. Operators will either have channels from 'cheaper times' (like now) or invest thousands or even millions to create a reasonably sized Lightning channel and do their best to find reliable channel partners & keep it open for as long as possible (best-case forever).
I suppose for LN to work in this context, there would basically have to be huge penalties in LN for unresponsiveness or dishonesty to mitigate the need for cost-prohibitive on-chain transactions, and then all channel operators would be essentially required to have no more than a few days downtime over a timespan of many years, and never slip up in terms of sending outdated transactions.
Do keep in mind that both channel partners pay for the closing transaction. So it's in both partners' interest to keep it open.
We really need a 1000x improvement.
True, but that will never work on-chain. Either L2, L3 or any other off-chain mechanism is required for that.