L2s are boring

Just launch an L1 bro

Blast decided to become a “full stack chain”, shattering their alignment with Ethereum in the process. Why not? L2s and applications will forever want to own their sequencing revenue and MEV extraction opportunities, and the minute you introduce sequencer decentralization to a rollup, you’ve built another L1 blockchain.

So you might be thinking… Why do these Bitcoin L2s want to even use Bitcoin? Building your own blockchain enables you to optimize for specific tradeoffs (and make that little governance token a wee bit more useful!). It might even be a better base layer than Bit...

I’ll stop while I’m ahead. The entire point of L2s is to take transaction execution offchain and inherit L1 security. But, user trends show that they don’t care about L1 security. And that sequencer revenue and future MEV opportunities are all too sweet for the operators to turn down.

Oh sweet developer, to align or not align…

Cosmos as Bitcoin’s app layer

Speaking of L1s, I’ve seen Cosmos previously touted as the application layer for Bitcoin. And while this is somewhat unrelated, I’ve been reviewing a new L1, BounceBit, that is built on the Cosmos SDK. The thesis is that L1 blockchains are more secure (ahem, and sovereign) than L2s, and building these L1 application layers for bitcoin the asset is more long-term sustainable.

I’m not sure if BounceBit is spearheading the Cosmos & Bitcoin thesis, but it is an interesting trend that some other projects are following.

And don’t worry, the security budget will sort itself out.

Delicious data availability

We posted a tweet that highlighted that Bitcoin is the caviar of data availability solutions. This is a nice way of saying that only a few projects will even attempt to post their transaction data and those sweet little proofs to Bitcoin, and even fewer of us plebs will transact on Bitcoin rollups.

I’m not FUDing! Modularity enables these rollup-style blockchains to leverage alternative solutions for data availability. But this tradeoff isn’t just sacrificing Bitcoin’s security for better performance. The marketing department will lose their whole edge!

The narrative must remain intact! Introducing the superchain stack: We’ll make the L2 a settlement hub for L3s that don’t want to use Bitcoin for DA, but want to stay aligned… We’ll decentralize the sequencer to make it a better base layer. We could even use it for DA…

Aaaaannnnd we’re back 🙂 It’s okay. Just build an L1. You know you want to.

We won’t judge you (but we will assess your risks).