The Debate on Layer 2 App Chains: Insights from Industry Experts
Andre Cronje, co-founder of Sonic Labs (previously known as Fantom), has expressed strong reservations about the use of layer 2 (L2) application chains. These app chains are specially designed L2 blockchains tailored to meet the unique requirements of specific applications.
Challenges Highlighted by Cronje
In a recent post on X, Cronje outlined several significant challenges that could impede the adoption of app chains:
- High Infrastructure Costs: Cronje argues that the expenses associated with setting up and maintaining app chains are often underestimated.
- Fragmented Liquidity: He notes that these chains can lead to liquidity division across various platforms, making them vulnerable.
- Lack of Developer Support: There is a notable absence of essential infrastructure, including stablecoin deployment, oracles, and custodial services, which could hinder developer activity.
Cronje’s team has reportedly spent about $14 million this year on costs related to custody, exchanges, oracles, and bridges—most of which are recurring expenses.
h3>Contrasting Views from Industry Peers
In stark contrast to Cronje’s views, Hilmar Orth, the founder of Gelato Network, argues that developers can successfully navigate these challenges through rollup-as-a-service (RaaS) providers. Orth claims that RaaS and framework teams offer substantial support, countering Cronje’s assertions.
Addressing Liquidity Concerns
Further, Cronje pointed out that app chains can fragment liquidity, which can lead to reliance on fragile bridges. In response, Marc Boiron, CEO of Polygon Labs, noted that the creation of an AggLayer—an aggregation layer—might effectively tackle liquidity issues by facilitating the sharing of resources among sovereign blockchains.
However, Orth contends that each rollup has its own distinct bridges and market makers, resulting in the potential concentration of liquidity among chains with a high total value locked (TVL). This suggests that other chains may only access this liquidity according to demand.
Orth also noted that advancements in zero-knowledge (zk) proofs would streamline the process of transferring funds across rollups.
Influence of Community and Network Dynamics
Cronje further emphasized that app chains often lack a strong community of builders and users, which can stifle network effects. Conversely, Boiron asserted that network effects would thrive within the AggLayer, which aims to consolidate users and liquidity.
“So many frens contributing to the AggLayer and all are going to want to help grow the pie.”
Orth, however, expressed skepticism towards this notion, suggesting that applications are inherently competitive and will vie for user attention, indicating a less collaborative dynamic.
Key Figures Mentioned in the Discussion
- Andre Cronje – Co-founder of Sonic Labs
- Hilmar Orth – Founder of Gelato Network
- Marc Boiron – CEO of Polygon Labs
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