Ethereum

"2023 App Chains are about value capture AND tech"

1️⃣ Handful of L2 “hubs” with millions of L3 “servers”*
2️⃣ L3s may be “AWS” moment from cost perspective
3️⃣ L3s value flows rely on app layer
4️⃣ L3s require smoother interop & chain abstraction

*I thought l3s could run as efficiently on l2 layerbut we're manifesting current tech stack.

L3s SHOULD ultimately be profitable & make more than they cost to run (25K/year) but L3s can also be 1 unprofitable product in product suite (> /degentokenbase) & add value to an economy ($degen demand, currency for apps).

Benefit of L3s is cost-efficiency vs L2 (7figs). Some might differentiate in tech & primitives but cool apps, user onboarding & relationships are key to win long-term.

Alt business models
> Run basic DeFi
> Yielding assets onchain
> Ownership in eco projects
> Revenue outside l3, on /base /farcaster (Degen can accrue Moxie, get subs/tx fee on services, content/socialfi apps)

https://www.coinbase.com/de/blog/ELI5-L3s

An excellent article on L3s.
Why L3s are needed:
- To provide custom blockchain environments tailored to the specific demands of diverse applications.
- To capture the "AWS" moment for blockchain, ensuring cost-effective scalability for widespread use.
......

However, "The value of L3s hinges on the application layer."

Each L3 requires a vibrant ecosystem of developers and applications to gain traction; otherwise, they risk becoming abandoned after an initial surge of interest. 

As it stands, the story of L3s is just beginning.

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I agree. Building a complete ecosystem requires a lot of work and, most importantly, substantial funding, which was already challenging for recent L2s. 

Therefore, L3 can focus on creating a unique ecosystem for a specific niche—be it gaming, DeFi, NFTs, etc. Regardless of size, having a full ecosystem is crucial, it can’t just be one or two applications. 

When the market picks up, we might see the leaders emerge.

Thanks for sharing!

Feels we‘re very early to l3s. I believe most builders underestimate what it takes to build a full-scale ecosystem & most do try to become a jack of all trades aka compete head to head with the big hubs like base, Solana or Arbitrum instead of focusing on a specific niche.

Launching key defi primitives and small products like Degen ENS for a community could be smart. This enables other devs to build small use cases around the first primitives or launch other simple apps that users may enjoy & help them come into a community.

If I had to guess, I‘d say no l3 itself will be sticky for the next year but could be used as a tool to onboard users & devs to communities.

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I am studing on warpcast and i like a music and sports

probably yes for devs. but for users, it's still early.

Look where memecoins are choosing to launch, that's how they're voting with their actions.

Solana (L1) and Base (L2) are good enough.

I think for now L3 is the best choice, what do you think?

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