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Layer-2 chains have been speculated to be the following evolution of blockchain scalability, and in some methods, they delivered. They made transactions quicker and cheaper, helped initiatives scale quickly, and gave Ethereum (ETH) room to breathe amid a surge in community exercise. However because the mud settles, one uncomfortable reality has turn out to be arduous to disregard: L2s don’t retain the worth they generate. As an alternative, they leak it again to the guardian chain, again to the liquidity hubs, and again to governance buildings that have been by no means actually theirs to start with.
This may not have been an issue in 2021, when initiatives raced to attain pace and scale above all else. However we’re in a distinct cycle now, and the variety of initiatives competing for customers has elevated exponentially. Tasks now need to suppose long-term. They’re optimizing for sustainability, sovereignty, and alignment. And more and more, they’re turning to app-specific “appchain” layer 1s—not as a novelty, however as a necessity.
L2s: Quick, low-cost—and economically hole
Let’s name it like it’s: L2s are downstream environments. They inherit safety, settle transactions, and depend on Ethereum (or one other L1) to finalize every thing that issues. That dependency has financial penalties.
Each time a transaction is processed on an L2, it will definitely will get rolled up and settled on the L1. The consequence? Charges movement again to Ethereum. Knowledge availability charges movement again to Ethereum. MEV worth—additionally upstream. It’s a one-way switch of worth, from the L2’s economic system again to the L1 that secures it. Should you’re constructing a mission on an L2, you’re not compounding worth in your individual ecosystem—you’re subsidizing another person’s.
Whereas these expenses could seem trivial—in spite of everything, they’re only a tiny p.c of the community’s income—they add up shortly, endlessly sapping away liquidity. For any mission making an attempt to scale, these persistent overheads can significantly restrict progress and long-term sustainability.
Whereas these charges might seem minor—only a small fraction of general income—they accumulate quick, quietly draining liquidity from the ecosystem. Over time, prices from the info availability and restaking layers turn out to be substantial. For any mission approaching scale, these persistent overheads can significantly restrict progress and long-term sustainability.
And it doesn’t cease with charges. Liquidity and governance are additionally rooted within the guardian chain. Most DeFi protocols nonetheless depend on liquidity swimming pools and bridges based mostly on the Ethereum mainnet. Token holders usually stake or vote utilizing techniques constructed upstream. Even when L2s have their very own tokens, they’re usually structurally tied to Ethereum’s financial and political dynamics.
Put in a different way: L2s offer you pace, however they take away your independence and slowly drain your token economic system of assets.
Appchain L1s: Preserving the worth you create
Appchains, in distinction, are constructed to retain the worth they generate. While you launch your individual sovereign chain, you’re not settling elsewhere. You’re not leaking charges or relying on one other community’s validator set. The financial exercise you generate—transaction charges, staking rewards, MEV, governance energy—all of it stays native.
That creates a basically totally different progress mannequin. As an alternative of worth flowing out of your ecosystem, it compounds internally. Your token captures extra utility. Your group has a direct stake in your chain’s success. Your infrastructure turns into an engine for progress, not a value heart feeding one other chain’s economic system.
You additionally get full-stack management, now not certain by a guardian chain’s limitations. Need to set customized validator incentives? Go for it. Need to experiment with gasless transactions or dynamic tokenomics? Do it. L1s allow you to construct infrastructure that matches your utility’s wants, not the opposite means round.
However what about fragmentation?
For years, the largest knock towards appchains was that they’d create remoted ecosystems. That criticism used to carry weight, however not anymore.
Because of interoperability options like LayerZero, Avalanche Warp Messaging, and IBC, we now have dependable methods to maneuver information and belongings throughout chains. Appchains can plug into broader ecosystems whereas nonetheless retaining their sovereignty. They are often each linked and unbiased—now not pressured to decide on between integration and management.
The fragmentation argument is outdated. In follow, appchains have gotten a pure extension of the multichain world, and the tooling round them is bettering quick.
The market is catching on
An increasing number of initiatives are selecting to go the appchain route, and the pattern will proceed to achieve steam. Builders need autonomy, they need financial sustainability, and so they need the liberty to design their infrastructure round their customers, not round Ethereum’s bottlenecks.
That’s to not say L2s are going away. For a lot of early-stage initiatives, they’re a good place to begin. However they’re not constructed for scale. They’re not designed to retain worth. They usually’re undoubtedly not constructed for initiatives that need sovereignty over their infrastructure and their economic system.
Should you’re making an attempt to construct one thing enduring—one thing that’s not simply quick and low-cost, however aligned, sovereign, and sustainable—you shouldn’t be settling for a Layer 2. Try to be considering like an ecosystem supervisor. Try to be proudly owning your stack. It is best to decide to constructing a sequence that meets your individual customized wants, with out siphoning assets.
Spinning up an L2 might seem to be the only go-to-market technique, offloading duties so you will get to market quicker, however investing in L1 infrastructure is a essential step to long-term success. Earlier than lengthy, each mission shall be racing to construct its personal appchain.
