- Degen Chain’s explosive growth has sparked debate on the utility of L3s.
- Polygon Chief claims that L3s could undermine Ethereum’s security and value.
Polygon [MATIC] CEO Marc Boiron has expressed his reservations about Ethereum [ETH] layer 3s (L3s) and highlighted their risks.
Penning his thoughts on X (formerly Twitter), Boiron stated that L3s siphon value from Ethereum to the L2s they are based on.
“I’ll say the quiet part out loud: L3s exist only to take value away from Ethereum and onto the L2s on which the L3s are built. (You do not need L3s to scale). And this is why Polygon Labs does not work on L3s.”
Boiron’s criticism comes a few days after meme mania, through Degen Pepe [DEPE], engulfed the Degen Chain, an L3 on Base that leverages Arbitrum’s Orbit Chains.
In less than a week, its native token, DEGEN, has recorded explosive user growth, with over $130K active addresses and over 4 million transactions.
Degen Chain: L3 pros and cons
Degen Chain’s impressive performance in less than a week has attracted debate across Crypto Twitter (CT).
Other crypto users and figures explored the L3 pros and cons, extending the debate over the Easter weekend.
For instance, Polygon developer relations engineer Jarrod Watts stated that L3s are cheap but have worse decentralization than L2s.
“L3s are super cheap with worse decentralization than L2s. Current L2 decentralization is not great, maybe worth waiting for this to improve before building L3s on top. L3s still face almost all of the same problems that L2s have today without interoperability.”
Additionally, Watts acknowledged that L3s are great for cheaper onboarding.
However, he maintained that interoperability protocols like Polygon’s Aggregation Layer (AggLayer) can solve most of the problems L3s aim to address.
For his part, Polygon Chief Marc Boiron added that Ethereum security could be at risk if it can’t capture any value as L3s settle on L2s.
“If all L3s settled to one L2, then Ethereum would capture basically no value and, thus, Ethereum security would be at risk.”
Furthermore, Boiron noted that such development could slump ETH’s value,
“If Ethereum earns no fees and has no prospect of earning fees other than a tiny amount of fees from this one L2, then the value of ETH will drop.”
Coinshares previously highlighted that Ethereum liquidity fragmentation could partly be solved through L3s and interoperability protocols like Polygon’s AggLayer.
However, the recent debate shows that L3 trade-offs could impact Ethereum security and calls for more research.