Why the Lootverse needs a dedicated chain
Loot is originally launched on the Ethereum L1. Scalability has always been an issue until the emergence of L2s. For the average Loot holders, the gas fee might not be a huge problem, since an OG Loot is expensive enough to justify the gas cost of securing it on L1. However, for holders of other Lootverse NFTs that are not as expensive, the gas fee becomes a tremendous problem.
Future Growth is limited by the gas fee on L1
More Loot is a good example. It aims to be an expansion of the Loot collectives which removes the expensive barrier of entry to the Lootverse. Although the cost to mint a mLoot has not been exorbitant yet, it's obvious to see that the gas fees on L1 will only get more expensive in the future, making activities on L1 not practical.
With the upcoming AGLD staking launch, we have been paying attention to gas expenditure during testing. Given the low floor market cap, mLoot currently is priced at, there might not be enough rewards for mLoot holders to participate since gas cost could outweigh the staking rewards. If the gas fee is too expensive for the most basic rewards to be distributed to mLoot, it's hard to justify that the Ethereum L1 is the place where the Lootverse will grow.
The community wants sovereignty
Several Lootverse projects have already ventured out of Ethereum for greener pastures. The TreasureDAO chose Arbitrum to operate its gaming ecosystem. Realms advanced to StarkNet to build their fully on-chain game empire. Arbitrum and StarkNet are both great L2 scaling solutions that preserve security guaranteed by Ethereum but at the same time bring the gas cost down. However, those chains are not "loot-centric" and are restricted to their own roadmap. For the Lootverse projects building on other general purpose L2s, oftentimes they have to wait for issues to be resolved, or sometimes even work things out together with the L2 team. This is all good when a team has the capacity to do so. However, the majority of developers in the Lootverse oftentimes do not have the extra capacity to help the chain. Waiting things out is not a good option either. The best option would be to build on a chain of their own ecosystem, which acknowledges their specific demand and treats them as a priority. The Lootverse developers are only first-class citizens on their own Loot Chain.
Why now and why an L2 rather than a standalone chain
It has long been debated rather an L2 makes more sense or a standalone blockchain. The main difference between the two is that an L2 chain relies on the security and consensus of a parent chain(usually Ethereum), whereas a standalone chain operates independently. L2 chains can process transactions faster and cheaper than the parent chain, but they still require the parent chain for final settlement and security. Standalone chains, on the other hand, have full autonomy but may require more resources to maintain security and may have a smaller network effect compared to chains built on top of existing platforms.
In the Loot Chain case, we argue that an L2 makes more sense.
Security
This is obviously the largest advantage for an L2 chain relying on Ethereum for DA and therefore security. Given the origin of Loot, it wouldn't make sense to cut the tie and force the Lootverse citizens out of Ethereum.
Composability
We might have not mentioned this yet, but Loot leads the most innovative NFT community out there, period. Loot defines the word "NFT composability" and to a large extent inspired the "Fully On-Chain Game" genre. This is all possible thanks to the composability from the metadata of Loot to the power of CC0 openness. When building our own Loot Chain, composability is the last thing we want to break. Bridges and all kinds of composability solutions exist already for L2s, both for assets and for messaging. It's much easier to build composability solutions for an L2 than a standalone chain given that L2 shares very similar security assumptions with other L2s.
Timing
It might have been a different story if we were to consider building an L2 back in 2019. Now in 2023, the development environment for an L2 has been much easier for developers given the countless endeavor to achieve EVM equivalence. A huge portion of the dev tools and smart contract best practices on L1 are now easily applicable on L2s. This would mean more time for building the ecosystem on top of the chain and less time for building the chain itself.
What we should do with the L2
The newly built Loot Chain will be the home for Lootverse users and developers. We envision several activities that are better off conducted on this L2 rather than on Ethereum L1. Future use cases should obviously be taken into account so there shouldn't be any limitations.
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Lootverse NFT non-custodial staking
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AGLD is distributed to various Lootverse NFTs via a very innovative non-custodial staking mechanism. This works in a very similar way to universal basic income. It works best in a low-gas environment.
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Users can "stake" their Lootverse NFTs on Ethereum directly, or they can migrate their Lootverse NFTs onto the Loot Chain and "stake" here to save on gas fees.
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Execution environment for Lootverse games
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Developers building Lootverse games may choose to operate their games on the Loot Chain to take advantage of the low gas fee.
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They may run in-game assets on the Loot Chain as tokens or NFTs.
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They may run the entire logic & state of the game on the Loot Chain.
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General trading
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Trading and moving assets around is undeniably a huge part of the Lootverse.
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Saving on the gas fee means savings for both buyers and sellers.
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Less gas fee means less friction on trading, hence more efficient and more accurate price discovery for Lootverse assets.
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Actionables
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The AGLD DAO is now actively exploring options to build out the Loot Chain. We will release a proposal whitepaper once we have the details ready.
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We would love the community's feedback and discussion. Join our discord!