Polygon’s CEO Critiques L3’s Impact on Ethereum’s Value

Last Updated on April 1, 2024

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Key Takeaways:

  • Marc Boiron, CEO of Polygon, argues that layer-3 (L3) networks detract from Ethereum’s value rather than enhancing its scalability. He believes L3 technologies siphon value from Ethereum, compromising its security.
  • Despite the potential for L3 solutions to offer application-specific functionalities and performance improvements, Boiron maintains that focusing on L2 solutions aligns with Polygon’s mission to scale Ethereum effectively without diverting its value.
  • The debate around the value and impact of L3 technologies on Ethereum’s ecosystem is ongoing, with industry experts and Ethereum co-founder Vitalik Buterin offering varying perspectives on their role and benefits.

Marc Boiron, the CEO of Polygon, recently stirred up a heated discussion on social media after expressing his viewpoint that layer-3 (L3) networks are not essential for the scaling of Ethereum.

Instead, he suggests they detract value from Ethereum’s main network. Boiron elaborated on April 1 that Polygon Labs, primarily focused on layer-2 (L2) scaling solutions for Ethereum, deliberately avoids engaging with L3 technologies because they do not contribute to the scaling efforts but rather, in his view, siphon value from Ethereum to L2s where L3s are constructed.

Boiron’s stance is that L3s are designed to divert value from Ethereum, thereby endangering its value capture and, consequently, its security.

This perspective, however, encountered opposition. In response to the argument that L2s inherently represent value for Ethereum, Boiron partially concurred but emphasized his belief that L2 value does not directly translate to value for Ethereum.

He posited a scenario where if all L3s were to settle transactions on a single L2, Ethereum would essentially lose its value capture, posing a risk to its security.

Further, Boiron clarified that while there is no restriction on building L3s on platforms, including those by Polygon, the focus is not on monopolizing value but on ensuring Ethereum receives its fair share of value.

He reiterated Polygon’s founding mission: to facilitate Ethereum’s scaling with the right technology, emphasizing parallelization of the Ethereum Virtual Machine (EVM) and privacy, and stated that L3s do not align with this vision.

Layer-3 protocols are developed atop L2 solutions to accommodate application-specific decentralized applications (DApps), offering diverse functionalities such as scaling, performance enhancement, interoperability, customization, and cost reduction.

Despite the proliferation of such solutions, including notable names like OrbsXaizkSync Hyperchains, and Degen Chain on Arbitrum Orbit, the L3 sector remains relatively nascent.

Contrasting opinions were presented by other industry experts.

Peter Haymond, from Offchain Labs, highlighted several advantages of L3s that purportedly do not detract from Ethereum’s value, such as lower costs for native bridging from L2s rather than L1s, reduced on-chain proving costs, the introduction of custom gas tokens, and specialized state transition functions.

Similarly, Patrick McCorry from the Arbitrum Foundation and Mert Mumtaz, CEO of Helus Labs, shared their insights, underscoring the ongoing debate regarding the role and impact of L3s in the Ethereum ecosystem.

Ethereum co-founder Vitalik Buterin previously weighed in on the L3 discussion, suggesting that L3s could serve distinct purposes beyond scaling, such as offering “customized functionality.”

This indicates a broader perspective within the blockchain community on the evolving roles of different layers in the blockchain architecture, highlighting ongoing debates about their implications for value distribution and the security of the underlying networks.

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Victor Fawole, a seasoned Web3 content creator and social media influencer, excels in bringing the pulse of the crypto world to our readers.

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