Debate: Should Stablecoin Chains Have an Ethereum L2 or Their Own L1? - Ep. 907
🎯 Summary
[{“key_takeaways”=>[“The immediate reality shows that many hyped new L1s lack basic functionality, while top L2s handle significant TVL, challenging the immediate decentralization claims of new L1s.”, “Stripe’s Tempo opting for an L1 over an L2 was justified by their desire for a permissionless validator set and avoiding single admin keys that could compromise user funds.”, “Justin argues that Ethereum’s codebase (and by extension, L2s built upon it) inherits unparalleled robustness from years of adversarial testing, making new L1s inherently riskier.”, “Hounan counters that current L2s are often centralized (Stage 1) and that alternative L1s like Solana currently offer a better user experience regarding fees, speed, and decentralization metrics than Ethereum L2s today.”, “Hounan advocates for highly specialized L2s (like his stablecoin-focused Codex) that focus on narrow verticals to accrue value back to Ethereum L1, rather than generalized rollups.”, “The debate touches on the concept of ‘decentralization theater,’ questioning whether near-term L2 features like permissionless withdrawals are meaningful checks against centralized admin keys.”, “Empirical evidence regarding stablecoin deployment shows a massive preference for Ethereum (10x more stablecoin value than Solana), which Hounan cites as proof of Ethereum’s structural advantage despite scaling issues.”], “overview”=>”This debate centers on whether new stablecoin ventures should build their own Layer 1 (L1) chains or leverage existing Ethereum Layer 2 (L2) solutions. The discussion highlights the trade-offs between the perceived decentralization and robustness of Ethereum’s ecosystem versus the immediate scalability and industry-specific focus offered by new L1s or specialized L2s. Participants clash over the current state of decentralization on existing L2s versus alternative L1s like Solana, and the long-term viability of each approach for mass adoption.”, “themes”=>[“L1 vs. L2 Architecture Choice for Stablecoin Chains”, “The State and Path to Decentralization in Rollups”, “Incentives and Sequencer Centralization Risks”, “Empirical Adoption Metrics (Stablecoin TVL) vs. Theoretical Security”, “The Value Proposition of Specialized Rollups”, “Credible Neutrality and Business Decision Making”]}]
🏢 Companies Mentioned
💬 Key Insights
"I would say 10 billion worth of stablecoins that can actually serve as money and can actually be used for commerce in a permissionless way, I actually think is more valuable than a 100 billion in either an unscalable system that is actually kind of pointless and useless because people can't actually use it or locked up in alt L1s that are, you know, centralized and, you know, funds can be stolen and it's not censorship-resistant."
"I think first observation is that most of the stablecoins are on Ethereum. And look, you know, this one doesn't have an EIP number, right? So maybe sounds less like, you know, highbrow, but I think that group fact is extremely important."
"I think folks have heard that content from you just then. And the if Maxis have said that L2 talking points and I don't want to just do that again, right? I'll throw some, uh, you know, I'll throw some controversial views in here, right? I think, um, certainly many of the L2s today that are in my view, uh, set up incorrectly and targeting raw markets are parasitic to L1."
"Most of them are at the boundary between on-chain and off-chain. And so what we're focused on today as a first-order priority is to eliminate that boundary between off-chain and on-chain."
"Can you today, for a user, if they want to seek out the, say, the best user experience from the perspective of decentralization, security, and fees and speed, that they better off on Solana than they are on an Ethereum L2 or Ethereum itself."
"Or you could use an Ethereum L2, which means there's an admin key, which can still use the funds, which means they can censor..."