ETH MAXI

More L2s, More Bearish on ETH?

Prevailing sentiment is that another L2 adds to the worsening UX and liquidity fragmentation frictions, so bearish ETH.

But we’ve already crossed the Rubicon on L2 scaling, and there’s no turning back.

It's time to reframe the narrative and see new L2 launches as bullish for Ethereum.

Naive for me to say, right?

But really, Kraken and Uniswap launching their L2s is bullish for Ethereum eco.

You see, Kraken's Ink and Unichain joined the L2 race not as standalone L2s but as members of the OP Superchain.

The first benefit of the Op Superchain alliance is (eventually) frictionless UX across all clan member L2s.

The Superchain is a unified, interoperable network of chains with the ability to bring together teams that would traditionally be seen as competitive.

But there's a financial benefit to the OP Collective.

When a new L2 joins the OP Superchain, it commits to contributing either:

• 15% of its net on-chain profits (total sequencer revenue minus fees paid to L1), or

• 2.5% of its total revenue, whichever amount is higher.

With ~30 L2s in OP Superchain, 15.8K ETH ($40M USD) was contributed to the Optimism Collective.

Currently, Base and OP Mainnet are the two largest contributors.

With Kraken, and Uniswap's Unichain joining, revenue should grow even more.

The money helps to grow Optimism and Ethereum's future:

• Public Goods: Financing Ethereum ecosystem projects, like infrastructure and dev tools.

• Network Growth: Incentives for OP Chains development and Ethereum adoption.

• Innovation: Backing for new tech advancements

$40M is not much money but Optimism Collective at least has a value accrual mechanism.

Ethereum L1 could take a cue from Optimism by encouraging L2s, if not technically, then at least socially, to reinvest value back into ETH.

That's a missing key to be bullish on ETH.

From reading the 4-part series on "Possible futures of the Ethereum protocol" by Vitalik I didn't see any new & clear L2 monetization ideas.

He mentions that Based rollups enhance the L1 by ensuring tighter integration and seamless interoperability, leading to greater efficiency, security, and value capture for the main chain. 

However, more major players are joining the OP Stack instead of launching as Based rollups. 

Perhaps the L1 could advocate for greater Based rollup adoption.

He also discusses scaling the L1 for specific use cases that should remain on the L1, thus retaining value there.

With more L2s joining the OP Superchain under a revenue-sharing model, rather than launching standalone L2s, there's increased funding for the Ethereum ecosystem. 

This also provides greater incentives to tackle UX and liquidity challenges in each L2.

Just want to see that "seamless flow of capital across the Superchain" happen ASAP.