With major exchanges starting to collaborate with blockchain development teams, the number of Layer 2 (L2) networks on Ethereum has also increased. Some believe this is a sign of diversification in the Ethereum ecosystem, while many dissenters argue that this trend will ultimately make the Ethereum ecosystem more complex.
DeFi analyst Ignas shared his views on this phenomenon today on a community platform. He stated that the more new L2 networks emerge, the more optimistic he becomes about “new public chains (alt L1).” This is because an increasing number of L2 networks are dispersing people’s attention and capital flows, leaving investors confused about where to focus their attention and capital. In short, more L2 networks on Ethereum will lead to a more severe fragmentation of the Ethereum ecosystem.
In contrast, new public chains like Solana and Avalanche inherently possess advantages such as low costs and high efficiency compared to Ethereum L2, along with ample development resources and community consensus, making them more competitive than Ethereum L2.
Furthermore, after the previous bull market, current new public chains are more innovative and specialized, while L2 networks are akin to previous new public chains, attracting a large number of protocol clones without much innovation and diversification. Additionally, Ignas pointed out that the poor token economics of many Layer 2 networks seriously impact the ecosystem’s prospects, stating:
Furthermore, Ignas also provided individual assessments of the advantages of various new public chains in his tweets:
• Avalanche: Expands through “subnets,” focuses on asset tokenization, and introduces more stablecoins as forex chains, etc.
• Polygon: Serves as a hub for specialized sovereign Layer 2 solutions for any specific application purpose. Attracting OKX is a major success.
• Near: Positions itself as a monolithic and modular blockchain. Collaborates with Polygon to expand Ethereum on the DA layer, but also provides L2 with chain abstraction solutions through unified UI (BOS) and L2 account aggregation.
• Solana: Leads the wave of single-layer blockchain expansion, providing fast transactions, fast speeds without the need for cumbersome modular user experiences.
• Fantom: Further optimizes single-layer design through Sonic upgrades to achieve 2000 TPS without the need for sharding or Layer 2 solutions. The goal is to attract a new generation of decentralized applications (dapps).
• BNB Chain: Introduces the opBNB Layer 2 solution to reduce costs, but more importantly, the upgrade is BNB Greenfield, focusing on the tokenization of DataFi data and intellectual property, as well as decentralized AI (large language model training with privacy protection).
• Cosmos: ATOM seems to have lost its way in terms of its value proposition, but the Cosmos Hub is thriving, with the Osmosis, Injective, and Kuji ecosystems flourishing.