Since the pioneering efforts of Arbitrum and Optimism in building Layer 2 networks on Ethereum to support faster and cheaper transaction experiences a few years ago, Layer 2 networks have emerged like mushrooms after the rain. According to data from L2Beat, there are currently 73 operational Layer 2 networks and 20 Layer 3 networks, with 81 upcoming projects and 12 projects already in the pipeline.
However, Andre Cronje, the director of the Fantom Foundation who is known as the "Father of DeFi", and Andre Cronje, the Chief Technology Officer of Sonic Labs, tweeted today, targeting Layer 2 networks. They argued that Layer 2 networks, as application chains, are illogical for developers, and listed multiple reasons:
- Almost no basic infrastructure (stablecoins, oracles, institutional custody, etc.) upon deployment
- No foundation or lab to provide assistance
- Centralized architecture prone to attacks
- Fragmented liquidity and forced through cross-chain bridges
- Lack of user and developer communities
- Spending time addressing the above issues instead of focusing on applications and users
- Elimination of network effects
- Still relatively long transaction confirmation times (some providers are unwilling to cooperate)
- Standalone development (no collaborative teams)
Andre Cronje also stated that application chains have severely underestimated the costs of infrastructure and compliance (including browsers, hosting, trading platforms, oracles, bridges, toolkits, integrated development environments, deposits and withdrawals, native issuance and integration, regulation, and compliance), and that by 2024, application chains will have spent $14 million on expenses, a large portion of which are recurring costs.
Regarding Andre Cronje's statements, developers have been discussing them extensively. Some developers expressed agreement, stating "100% agree, it's meaningless to build products on application chains without the support and assistance of a foundation" and "Given such high expenses, I'm curious why there are even more L2s being launched, as they need a large volume of transactions to make money".
However, there are also developers with different opinions. One developer stated that although the available basic infrastructure for generic L2s is limited, the stronger composability between L2 (and even L1) completely eliminates the need for local stablecoins, oracles, and institutional custody, and that few people understand the framework shift.
This developer also disagreed with many of Andre Cronje's points, emphasizing that L2 application chains are indeed decentralized and secure, and acknowledged that the infrastructure costs for application chains may be higher than for standalone applications, but believes that as service demand competition intensifies, the costs of much of the infrastructure will tend towards zero.
Andre Cronje Pushes for Sonic
In Andre Cronje's view, Layer 1 should focus on enhancing its scalability through technology, rather than constantly creating Layer 2 problems. He has recently been leading the design and development of the Layer 1 blockchain Sonic (formerly Fantom) network, with the Fantom Foundation first disclosing last October that it would launch Sonic to enhance scalability and performance.
In early September this year, the Sonic testnet was officially launched, and on September 25th, Andre Cronje announced that the Sonic mainnet will be officially launched in December this year, inviting developers to build applications on its ecosystem. He also stated that Sonic has introduced a credit scoring mechanism, with the potential to become the first public chain to unlock the $11.3 trillion unsecured loan market.
Further Reading: Andre Cronje Previews "Sonic Mainnet" Launch in December, FTM Surges 40%, Is There a Bargain to Be Had?
At the time, Andre Cronje had heavily promoted the performance of his Sonic network, including that up to 90% of the transaction fees would be returned to developers, the transaction per second (TPS) would exceed 10,000, the transaction finality (TTF) would be around 1 second, and it would support native stablecoins. He also focused on developing a new native bridge technology, Sonic Gateway, to significantly improve the security and convenience of asset transfers from other chains.
