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.

crypto-anarchist · onchain social explorer, advisor · spread FC gospel in /chinese community · curate SocialSight.telegram· write 0xluo.xyz · host /luo ·中文 @luo

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.

1000 $degen

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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.