Author: Optimism co-founder Kevin Ho, Blockworks; Translated by Baishui, Jinse Finance
As the blockchain ecosystem grows, so does the need for flexible, customizable technology.
Scalability is about making technology more accessible to Web3 builders and consumers. If developers can build scalable applications, they can reach more users without significantly increasing costs or requiring additional resources. Layer 3 can be a promising opportunity for those looking to bootstrap a chain with limited resources.
By reducing overhead operating and entry costs, Layer 3 is quickly becoming an essential component of the blockchain ecosystem, providing developers with greater flexibility and growth opportunities.
When Layer 3 started to gain popularity, they were initially met with skepticism. Building on top of Layer 2 could add complexity and unnecessary fragmentation, and adding more layers could make the application ecosystem more difficult to navigate, leading to a lack of interoperability.
But as more use cases emerge, it becomes clearer that Layer 3 can lower the barrier to entry for new chains and reduce the cost of entry for users with minimal security trade-offs.
Layer 3 Accessibility
Data availability costs continue to decrease as blob sizes and alternative data availability layers increase. The cost of operating a chain then gradually becomes the cost of submitting data commitments and withdrawing state roots.
Therefore, the fixed overhead cost of operating Layer 3 is significantly lower than the fixed overhead cost of operating Layer 2. The cost of submitting data commitments and output roots to Layer 2 is significantly lower than the cost of submitting the same transaction to the Ethereum mainnet.
Additionally, when a new Layer 2 chain is launched, it can be expensive to deposit tokens into that chain as a new user. It requires acquiring tokens on Layer 1, then depositing those tokens from Layer 1 into Layer 2 — a total of two Layer 1 transactions. During the Ethereum mainnet fee spike, we found that these transactions became incredibly expensive for new users. With Layer 3, onboarding new users requires only two Layer 2 transactions, a fraction of the cost.
This provides app developers and chain operators with new, more cost-effective options to drive usage and attract new users.
We’ve already seen this trend with Base as an example; the chain has driven huge demand and expanded support for Layer 3s built on top of it.
The entire blockchain ecosystem can benefit from Layer 2’s commitment to the emerging Layer 3 ecosystem, with more developers able to leverage the power of the Layer 2 technology stack.
Key features driving the rise of Layer 3
From my perspective, the demand for Layer 3 is surging, and there are two features that are quickly becoming the most in-demand features.
The first is a custom gas token, which allows developers to use Layer 2 tokens as native gas tokens for Layer 3. Custom gas tokens are great for community development - if an existing community is gathering around a Layer 2 token, then using it as a native token to pay for gas fees is a concrete next step in building an ecosystem. Custom gas tokens can enable new use cases, such as game currencies for gaming ecosystem chains and token grants that directly subsidize developer and user fees.
The second popular feature is Alternative Data Availability (alt-DA). This allows developers to choose the DA layer of their choice, which greatly reduces transaction costs and thus minimizes security tradeoffs.
Combining Layer 3 with alt-DA can provide developers with lower overhead costs for publishing to Layer 2. Add to that the continued low data availability costs, and it all adds up to the cheapest deployment of the Layer 2 technology stack.
As Layer 3 momentum builds, I expect many of these chains to launch both custom gas tokens and alt-DAs.
Powering the Future of Layer 3
Developers have more choices than ever before and can “choose their own adventure” when deploying Layer 2 or Layer 3. Everything has its pros and cons, and there is room for both to succeed.
Layer 2 will always be the most battle-tested, forward-compatible way to launch a chain when deploying a standard configuration. However, Layer 3 increases the accessibility of launching new chains at a very low cost. I believe key features such as custom gas tokens and alt-DAs are very important for the growth and adoption of Layer 3, which in turn is very important for driving innovation through the shared vision of expanding Web3.
