The more L2 there are, the more bullish I am on alt-L1. The last bull run was the beta phase of non-Ethereum L1:
Alt-L1 competes for the same yield-hungry degradation by offering liquidity mining rewards on top of the same forked protocol as Aave and Uniswap V2.
There is little innovation at the application layer outside of Ethereum.
Even non-EVM chains have launched EVM sidechains: Near’s Aurora, Polkadot’s Moonbeam, Cosmos’ Kava. EOS EVM and Solana’s Neon were late and missed the party.
Their only differentiating factors are:
1) Reduce gas costs;
2) Speed;
3) Brand promotion;
4) How much liquidity mining rewards they can provide.
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However, as the bear market began and LM rewards decreased, TVL returned to the safety of Ethereum.
To make matters worse, the new narrative of Ethereum L2 has emerged with Optimism, Arbitrum, etc., which promise to bring scalability without compromising security.
Furthermore, they attract users with potential airdr0ps.
L1 needs to reinvent itself
• Avalanche: Double expansion through subnets, focusing on asset tokenization, bringing more stablecoins into foreign exchange chains, etc.
• Polygon: Becomes the hub for sovereign L2 for any application-specific purpose. Attracting OKx is a major success.
• Near: Establishing itself as a monolithic and modular blockchain. Partnering with Polygon to extend Ethereum at the DA layer, Near also provides chain abstraction to L2 via Unified UI (BOS) and L2 account aggregation.
• Solana: Leading the wave of monolithic extensions, providing fast txs, speed, and no cumbersome modular user experience.
• Fantom: Double down on monolithic design with Sonic upgrade, bringing 2k TPS without sharding or L2. The goal is to attract a new generation of dapps.
• BNB Chain: Launching opBNB L2 to lower fees, but more important upgrades are BNB Greenfield, DataFi focused on data and IP monetization, and decentralized AI (LPM training with privacy protection).
• Cosmos: $ATOM itself looks lost in terms of value proposition, but the Cosmos Hub is thriving and the Osmosis, Injective, Kuji ecosystems are thriving.
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L1 innovates and specializes, while L2 becomes the new L1 - a forked protocol that attracts airdr0p farming, but lacks innovation and diversity.
Unfortunately, many L2 tokens have poor token economics. Just look at $ARB’s questionable “staking” proposal.
As expected, the old L1’s coin is going over the moon. They now offer a more compelling value proposition than they did in previous bull markets.
Or a short-term rotation? I hope not.
