L3s: Debating Their Impact on Ethereum, Says Polygon CEO

Polygon CEO Marc Boiron sparked a heated debate recently when he argued that layer-3 networks are unnecessary for scaling Ethereum and only serve to drain value from the mainnet. Boiron stated that Polygon Labs, a layer-2 scaling network, does not utilize layer 3s because they aren’t required for scaling existing networks. He asserted that layer-3s exist solely to divert value away from Ethereum and onto the layer-2s they are built upon.

Boiron’s comments were met with opposition, with one individual suggesting that layer-2s are, Valuable on Ethereum. Boiron partially agreed but emphasized that he doesn’t consider layer-2 value to be the same as Ethereum value. He argued that if all layer-3s settled to one layer-2, Ethereum would capture almost no value, thereby jeopardizing its security. He also made it clear that Polygon does not prohibit the building of layer-3s on any platform, including Polygon networks. The company’s objective is not to extract all value onto its own networks but to share a fair portion with Ethereum.

Boiron reiterated that Polygon’s mission is to scale Ethereum using parallelization of the EVM and privacy measures. According to him, layer-3s are not aligned with this mission. Layer-3 protocols are designed to support application-specific decentralized applications (DApps) and offer various solutions for scaling, performance, interoperability, customization, and costs. Some notable players in the layer-3 ecosystem include Orbs, Xai, zkSync Hyperchains, and the recently launched Degen Chain on Arbitrum Orbit. Despite these developments, the layer-3 sector remains relatively small, with only four tokens listed on CoinGecko.

Peter Haymond, the senior partnership manager at Offchain Labs, argued that layer-3s offer several advantages without siphoning value from Ethereum. These advantages include lower costs for native bridging from layer-2 rather than layer-1, cheaper on-chain proofs, customizable gas tokens, and specialized state transition functions. Patrick McCorry, a researcher at the Arbitrum Foundation, expressed surprise at Boiron’s stance. McCorry believes that layer-3s are a logical choice, particularly since they enable layer-2 to become a settlement layer and rely on Ethereum as a global ordering service and final arbiter of settlements.

Mert Mumtaz, the CEO of Helus Labs, seemed to support Boiron’s viewpoint in a separate post, describing layer-3s as essentially centralized servers settling on other centralized servers (layer-2s) controlled by multisigs. Ethereum co-founder Vitalik Buterin initially initiated the layer-3 debate in late 2022 when he proposed that layer-3s should serve a distinct purpose by providing customized functionality. He argued that adding a third layer to the blockchain only makes sense if it offers something different from what layer-2s already provide.

Rice Fullilove

Rice Fullilove

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