This is the Smoothie Newsletter.
Things have been shaky for crypto exchanges.
The CEO of Binance US just left and they cut 1/3 of their workforce.
Wishing our best to our friends at Binance.
Matt & Vineet
Binance launched the opBNB mainnet.
The question I’m asking…
How many Layer-2s do we need?
Arbitrum, Optimism, Polygon, Base, Loopring, Scroll, Linea, Mantle, Immutable X, zkSync Era, zkSync Lite, Aztec Network, Starknet…. the list goes on!
Many of these L2s are built on OP Stack including Base, DeBank Chain, opBNB.
With so many L1s already competing for userbase, are L2s just cannibalizing each others’ userbase?
Solana co-founder, Anatoly Yakovenko, believes that most of the layer-2 chains emerging, primarily on Ethereum, won’t serve as sustainable scaling solutions in the long term.
Think of each L2 chain as a database on Notion.
It’s good when there are a few of them and relatively small in size.
But as soon as they get bigger and you start fragmenting them into other databases, it becomes hard to create links between databases and which user gets access to which folders.
If you’re a large team, you know the difficulty.
To track consistency between two different databases (L2s), you have to synchronize everything through the L1.
This fragmentation creates a massive composability issue i.e. linking L2s in a permissionless way at a zero cost.
Technology-wise, that’s very hard to deal with.
If you want to buy a specific NFT from a marketplace, you have to go to that marketplace to buy. You can’t have it in every rollup.
Does that mean it’s a winner-takes-all situation for L2s? Probably!
Having just one main L2 chain solves the composability issue.
With so many biggies entering the war, it’s hard to say who will win the ultimate L2 wars.
Seedify is a leading incubator and launchpad for Web3 projects, which boosts top-tier blockchain initiatives, providing support in several fronts.
Pioneering a digital future focused on financial freedom Flashwire is a fintech service provider working to revolutionize the way people interact with financial services.
Passport protocol is key management infra enabling frictionless onboarding and transactions.
Stablecoin issuer Paxos accidentally overpaid $510,750 on a single Bitcoin transaction fee.