Deploying & Navigating the L2 Neighbourhoods as a Developer

Layer 2 (L2) summer is here. It feels like new L2 platforms are sprouting into existence every day. Yet, amidst this frenzy of innovation, one fundamental challenge persists: Understanding the differences among various L2s and determining the most suitable chain for deployment.

The prospect of poring over extensive developer documentation to understand the differences between L2 platforms is a daunting thought. Also, online discussions are loaded with technical intricacies, such as the decentralization of rollup sequencers and L2 revenue models, which often only adds to the confusion. What's more, these conversations often evolve into passionate tribal debates among fan boys, making getting an unbiased opinion impossible.

Then there are the lures of L2 chains, which are wielding a powerful incentive: money, through so called builder programs. While this could be a tempting offer to go for, basing your decision solely on this could lead to fatal flaws. Once chosen, switching chains is not as easy as one might think. Just recently, the NFT project DeGods was struggling to unite their community after yet another chain transition, leaving holders confused and annoyed.

As a new developer entering this rapidly developing space, the technical jargons and intricate debates might be far from what you initially envisioned participating in. Your goal is clear, you just want to "BUIDL" (term referred to only developing no matter what). The question then becomes: how do you, as an unbiased developer, embark on the journey of choosing the right L2 platform to deploy on?

Choosing Wisely: Your Future L2 Neighbourhood

As a developer of dApps (decentralized applications), you will often find yourself at a crossroads where development meets business strategy. One of the most crucial decisions you as the developer must make is selecting the right L2 solution to deploy on. This decision shouldn't be taken lightly, as it has significant implications for the success and sustainability of your project. At its core, this decision revolves around two key considerations: the specific needs of your users and your needs regarding the L2.

To better illustrate this dynamic, let's imagine each L2 as a unique real-world neighbourhood, each with distinct attributes. Just as some neighbourhoods boast high-end features with grand villas, others might be challenging areas, where safety is a concern.

In this analogy, your dApp is like a business endeavour seeking to set up within one of these neighbourhoods. Your users, the lifeblood of your venture, represent the costumers or passers-by that reside in the neighbourhood. A harmonious alignment between the user base and the chosen neighbourhood can lead to success, whereas a mismatch can lead to failure.

Consider the scenario of catering to a high-net-worth clientele. Trying to set up shop in an economically disadvantaged neighbourhood could render your offerings irrelevant—no one cares, nor can they afford to buy your product. This situation indicates a failure to meet your customers' needs. Conversely, you should also avoid placing your new, flashy ice cream shop in a remote area where foot traffic is non-existent. In this case, the L2 that hosts your dApp might not be suitable.

Drawing a parallel between a real-world business and deploying a dApp, the importance of selecting the right "neighbourhood" or L2 becomes abundantly clear. Success lies on your ability to understand your users' needs as effectively as a business understands its target demographic. At the same time, your understanding of the intricacies of the L2 landscape must be as sharp as that of a business owners assessing different neighbourhoods.

Understanding User Needs and Your Needs towards the L2 Solution

In this section, we will dive deeper into your requirements towards a L2 solution as well as the exact demands of your users, systematically evaluating each segment's significance. Please proceed through the following, assessing which subcategory hold the utmost importance for your dApp. The presented subcategories are only a suggestion, you may uncover further assessment criteria.

User Needs

Put yourself in the shoes of your users. Envision their interactions with the platform. Ask yourself, "What is the value proposition I offer?" By simulating the user's perspective, determine which subcategories the user deems important.

Cheap Transaction Fees: Do your users want cost-effective transaction fees? What is their tolerance level regarding transaction fees?

Security of User Funds: Do your users prioritize security? Is there significant value attached to the interactions with your dApp?

Fast Settling Time: Do your users value swift settling times? Can they afford to wait for a few minutes for their transactions to settle?

Ease of Withdrawal: Do your users want to transfer assets to alternative protocols or blockchains?

Needs Towards L2 Solution

Think of your project's objective and consider a range of factors that might need to be present for its success. Consider both project aspirations and user expectations towards the L2.

Need for Active Users On-chain     Are you bringing your own users to the L2 or do you cater to already existing users on-chain?

Average Net Worth of a User: Is your dApp for high-net-worth individuals?

Total Value Locked: Does your dApp require a lot of liquidity to work?

On-Chain Infrastructure: Does your dApp require other protocols or tools to function?

Off-Chain Infrastructure: Do you require complex RPC nodes or third-party apps?

Transactions Per Second: How many transactions will your dApp use in total; will you need millions of transactions per second?

Digging into the data

After identifying the crucial aspects to consider in the selection process for the best L2 solution to deploy on, let's delve into the methods of narrowing down the scope. To help your decision-making process, we have gathered links to platforms and dashboards that provide up to date, easy and unbiased overviews into each subcategory.

Transaction Fees: We provide a straightforward dashboard that showcases the median transaction fees required for transactions to settle across various L2 solutions. This dashboard allows you to efficiently identify chains with prohibitively high costs and those that offer cost-effective blockspace.

Security of User Funds: L2Beat offers a compact breakdown of protocol level risks associated with each L2. Easily determine who can control the L2 and what risks are present for user funds.

Need for Active Users On-chain: We also have a dashboard showing the amount of daily active users on each L2. Discover the biggest hubs of users and see the sustainability of their engagement over time.

Average Net Worth: Dune dashboards offer open-source insights. In this example, you can visualize both the quantity of assets and the number of individuals bridging into each L2. You can see the average user net worth in this dashboard.

A Lot of money going around: Another one of our dashboards displays the dollar amount of value stored on each L2. This visualization allows you to gauge the liquidity distribution and monitor whether it's increasing or decreasing.

Infrastructure required on-chain: Our recently launched blockspace analysis features deep insights into the exact activity & blockspace use of each L2. You can choose between different categories and see top gas consuming contracts. Utilize this overview to determine the on-chain infrastructure present on different L2s.

Infrastructure required off-chain: Alchemy offers a comprehensive database that presents all RPC providers for each chain. This resource facilitates the rapid identification of L2 solutions with robust off-chain infrastructure support.

Transactions per second: L2 Beat provides a dedicated column showcasing the maximum recorded daily transactions count per second. Use this column to assess whether your dApp has sufficient room to scale in accordance with the capacity of the underlying L2 solution.

Closing Remarks

Navigating the intricate landscape of L2 solutions can be a daunting task, but we hope that this guide has offered you valuable insights and assistance in an unbiased way. This field evolves rapidly, and developers like you are essential in building a better world. We hope that this guide is useful in your developmental journey. If you have any additional questions or require further guidance, please do not hesitate to get in touch.

Also, follow us on X or Farcaster for more updates on metrics and blockspace usage.

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