Do we really need so many Layer2? On the singularity of large-scale application of Web3

Author: Chen Jian, Jason All Things Research Institute

Author: The opinions in this article may be controversial, and they are all personal opinions. They are not aimed at any project, do not represent any investment advice, and do not represent any official position. Exchanges and discussions are welcome.

This year, whether it is the new public chain or Layer 2, it has fallen into the state of a hundred-chain war, especially Layer 2. Up to now, there are only 18 Layer 2s that have been counted by L2beat, and there are still a large number of Layer 2s that are in the process of launching and developing. Conservative It is estimated to be 30+, and Layer2 taiko, which is equivalent to ZKEVM, just announced that it has completed a financing of 22 million US dollars, setting off another carnival among the hair-raising army.

At present, only Arbtrum’s daily average TPS is approaching Ethereum, and there are still a large number of Layer 2 that have not even reached 1 and are in the state of ghost towns. But even so, there are still a large number of uninhabited ghost towns being built, and the first car is crowded. , and no one is sitting in the next 10 carriages. L2 has been launched, but users are still unwilling or have no motivation to migrate. Arbtrum’s Defi ecosystem has made a great contribution to user migration to L2. ImmutableX’s game ecosystem has not improved. Of course, TPS currently A certain degree of low is also related to the bear market.

I posted this picture on Twitter before, and many people laughed and said, “These Layer 2s claim to have a maximum TPS of over 10,000, but the actual TPS can’t even beat Ethereum.” In fact, this sentence is not accurate, maybe it is true experimental data It can carry over 10,000 TPS at the highest. It is like building a new city that theoretically can accommodate 10,000 people, but in fact, no one goes there after the city is repaired. In fact, only one person lives. The new city has become a ghost town, and the actual TPS is low. It’s not that these Layer2s are bragging. The problem now is not how high the TPS can be, but that no application needs such a high TPS. It’s like buying a batch of 8-core 32G game books in an Internet cafe. Play match 3.

But it cannot be said that high TPS and Layer 2 have no value. All the chains that focus on high TPS are betting that there will be applications that require such a high TPS in the future. If the bet is right, it will be Shenzhen Special Economic Zone. If the bet is wrong, it may It is a certain XX new area. Before the final construction, no one knows whether there will be such a big demand, but as a practitioner, I express my opinion from the bottom of my heart that the day of large-scale application of Web3 will definitely appear.

But there are more arguments in the market that “the reason why users don’t come now is because the infrastructure is not good, so we have to invest heavily in Layer 2”. First of all, I don’t think this argument is completely true, or it is a kind of hedging and risk seeking for certainty. In my lazy mind, infrastructure and large-scale applications are a two-way arrow relationship, not a one-way arrow. Layer 2 is a resource-driven track for deterministic large capital, so at this stage, cast a very powerful one. Layer2 is not great, but it is very powerful to vote for an application that explodes Layer2.

Then go back to the current Layer 2, as shown in the screenshot at the beginning of the article, you can see that the TPS activity of no chain exceeds that of Ethereum, and from the perspective of the public chain war in 2017, the chain itself has a head effect, and which one can win in the end? What about the chain? How should other chains that serve as cannon fodder end up?

Chains and applications are not the same. They can also be merged and acquired like a hundred regiments. Users will eventually aggregate into one application. Once the chain has no projects and applications, it will become a zombie chain. Of course, investors who should exit before that will also exit. , Who should bear the cost of the remaining chicken feathers? You can refer to who paid the bill for those public chains in 2017.

Now many Layer 2 chains are focusing on EVM equivalence, such as the Bedrock upgrade just carried out by the OP “Things you need to know about the OP mainnet will be upgraded to Bedrock on June 6”, and the focus of taiko is also an equivalent advantage. First of all To make an argument, EVM equivalence is very important, making Layer 2 and Layer 1 more and more similar, thereby lowering the threshold for developers and improving security.

But it is worth thinking about, is the real big cost of the project party the development cost? I don’t think so, the development cost is only a few, the labor cost of a few R&D personnel, the bulk of the cost lies in the liquidity cost of the project to maintain the application.

After an application is deployed on a chain, users will come to use it automatically. The project party needs to inject liquidity, including funds, traffic and other resources into the application, so that users can play it. Now that there are so many chains emerging, development The cost is low and even one-click migration is possible, but with so many resources in hand, every deployment of one more chain will dilute a certain amount of liquidity, and not deploying means giving up the ecology of this chain, which is a dilemma.

Therefore, the mouse pulls the shovel, and the equivalent EVM solves the small development cost. How to solve the large liquidity cost is an area that needs more thinking and value. This liquidity cost is not only for the project party, but also for the user, because the user’s Assets and data are also scattered on each chain.

How to aggregate the resources on each chain for both project parties and users is a very valuable topic.

For users, can we not let them feel the existence of the “chain” anymore? Can we let the user only have 1 ETH in his wallet and use it wherever he likes, and automatically route him to the corresponding chain behind the scenes? , including automatic conversion of gas fees? I have also seen some projects in this direction, and the general direction belongs to the category of account abstraction.

For project parties, no matter defi, games or social networking, etc., don’t let them stand in line to choose a certain chain, but deploy multi-chain applications, and the users, data and assets of multiple chains can also be owned. Once aggregated into a big pool, I only need to pay attention to this pool.

Neither end users nor project parties need to perceive the existence of the chain.

In addition, back to the large-scale outbreak of the application layer, this is indeed a matter that needs to be touched with ingenuity. When communicating with the Wanwu Island community last week, I recalled how I crossed the threshold from the PC Internet to the mobile Internet. Be Fruit Ninja.

At that time, I was just in junior high school, and smartphones were just new. Every time after class, a few people took out their newly bought Nokia N95s to cut fruit, surrounded by a group of classmates, and I was very friendly.

So I persuaded my mother to buy me a smartphone that can also cut fruit after class every day on the grounds that it is convenient to check information.

Fruit Ninja, a native game that is fully adapted to touch-screen smartphones, has made a great contribution to making a large number of people truly aware of the uniqueness of smartphones.

Therefore, breaking the circle of the mobile Internet is not to transfer the things of the PC Internet to it, but to adapt the native application of the characteristics of the mobile Internet. Think about how WeChat suddenly widened the gap with mobile QQ, which is a mobile product? shake.

Following this line of thought, I think that StepN is the fruit ninja of Web3. Although it cannot escape the hair-pulling and death spiral in the end, it has really made a great contribution to the understanding, acceptance and use of Web3 by a large number of users. A friend of the fund communicated. He said that he started playing Web3 because of SetpN. Because there are two children in the family who don’t exercise very much, he bought running shoes for the children. He said that you can earn pocket money by running downstairs every day, and the children are very happy, so Every day, the family of four enjoy themselves and go out for a run after dinner.

So follow this logic and continue to disassemble, what other products conform to this logic? Let me give you an example. Please note that just giving an example does not represent any investment advice. I was thinking about an idea before. Do you remember that there was an AR game of Pokemon during the Spring Festival in 2016? At that time, many people took their mobile phones to scan around , There is a map location in the mobile phone, you can go to the corresponding location to catch the elf, very interactive, once a big hit, I have been thinking that this game is very suitable for Web3, I feel that it is even bigger than StepN in terms of breaking circles and business .

The general logic is to use AR. The user will have a map with the mobile phone on which the position of the elf is marked. The user can see it on the screen when walking over with the mobile phone. Each elf is an NFT. You need to buy a poke ball to catch pokemon. This poke ball is similar to the nature of running shoes, and then the user can catch the pokemon, follow the logic of upgrading and fighting monsters, through some mechanisms such as the level of the poke ball and other parameters , to increase the winning rate of catching, and your own elves can also be fed, take the route of cultivation, have babies, or fight with other people’s elves, there will be a lot of articles that can be done and integrated into the economy The model is played.

And it can effectively break the circle. I still remember that in 2016, many media reported that many young people rushed to toilets, restaurants and other people’s offices with their mobile phones to catch them, and they were kicked out. The weird behavior of this group is very Grasping the attention of the media society, imagine a group of young people gathering together on the main road with a camera to scan around, there will be more circles, and it can also achieve a strong social interaction, forming a team together on weekends to go out to play Strange, very social. After all, StepN can only run by itself, and there are many channels for commercialization. In the later stage of StepN, Ponzi must find external income, such as cooperation with Adidas, etc., but the results are minimal, but the little elf The model can completely cooperate with brands in the business district. For example, just put a few Chanel elves at the door of Chanel, so that everyone can gather at the door to catch them, and if they catch them, they can hold them and buy Chanel with a 20% discount, which is very good. You can cooperate with brand owners, and the imagination space is much larger than StepN. Please note that this is just an example and does not represent any suggestion.

So back to the question of the title.

Do we really need so many Layer2? Compared with the number that has appeared now, no need.

Where is the singularity of the large-scale application of Web3? It lies in the emergence of the next product that is natively adapted to Web3 features, has a higher degree of sustainability to solve the death spiral, and can break the circle.