Scaling Layers

L2 ecosystems are more than technical platforms; they embody the cultural essence of their communities. As L2s like Optimism, Base, Blast, and Zora distinguish themselves within the Ethereum network, they also foster unique cultural identities. These identities, in turn, influence the types of projects that stem from them, similar to how L1s like Bitcoin, Ethereum, and Solana have shaped their ecosystems with distinct cultures. Base, for example, has become a sanctuary for consumer apps, attracting projects that resonate with its user-friendly ethos. Blast has garnered attention for its gambling and degen culture, drawing in a more speculative DeFi crown. Meanwhile, Zora has become a magnet for artists and creatives. This cultural divergence is an organic step in the evolution of blockchain networks. It represents an opening of worlds, broadening Ethereum's reach by matching projects with communities that share similar visions and values.

As we delve into the concept of L3s, it's clear they are tied to the foundations laid by L2s. With L2s maturing and their competitive dynamics cooling down, projects are now evaluating which L2 base aligns best with their objectives and audience. Ryan Yi's observation that winning the L3 narrative is the real “L2 war” seems prophetic as L3s start to capitalize on the strengths of their L2 foundations.

In this vein, Will Collier has identified Base as a potential liquidity hub. In a multichain universe brimming with options, users are likely to gravitate towards a select few hub chains. L3s will offer the high-throughput block space required for specific applications, such as gaming. Transactions on L3s are much cheaper than on Ethereum or even L2s, which allows developers to funnel more revenue into expanding their user base.

The customization possibilities on L3s are extensive. They range from privacy features to unique governance models. For instance, Arbitrum Orbit's partnership with Azuki and Yuga Labs highlights how L3s can foster dedicated execution environments for each organization’s specific use case. The Xai network demonstrates how dedicated gaming networks can flourish. By introducing parallel processing to increase efficiency and scalability, game developers can access cheap fees while benefiting from the composability for users in Xai’s gaming ecosystem. Moreover, Syndicate's low-cost L3 for Farcaster Frames “allows developers to build bigger, faster, more reliable Frames” while pushing the envelope of innovation by comping gas fees.

These advancements suggest that NFT companies might consider pivoting to app chains for better survival prospects, as some have speculated. The meme-derived $DEGEN token is now a unit of account on Farcaster and Base, with ambitions to power an L3. Realms' Starknet-based network uses $LORDS as its fee token, underscoring its focus on gaming and autonomous worlds. Jesse Pollak's comparison of L3s to “onchain connected servers” paints a picture of a future filled with specialized networks. For the end consumer, L3s will most likely be completely abstracted away by embedded wallets and such. This shift isn't just about scaling technology; it's about nurturing ecosystems that resonate with the projects they support and creating more fluid mechanisms of value accrual.

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