Long term promotion: From the perspective of the pure terminal market, re-examine L2 and Ethereum

Note: The original text comes from @ thecryptoskanda's long push.Instead of discussing "Is L2 in trouble?" or "Is Ethereum in trouble?", let's discuss why Ethereum and L2 have come to this situation

Note: The original text comes from @ thecryptoskanda's long push.

Instead of discussing "Is L2 in trouble?" or "Is Ethereum in trouble?", let's discuss why Ethereum and L2 have come to this situation.

If the smartest group of us are so obsessed with proving that our grand narrative is so accurate that it is divorced from reality, then we are not worth the next bull market.

Let's calm down and re-examine L2 and Ethereum from a pure end market perspective.

Let's sneak in.

If it looks like a duck, swims like a duck, and calls like a duck, then it may be a duck

Let's put aside the narrative of "expansion" and "security" for a minute and try to see from the perspective of a user, what is the difference between L2 and EVM public/side chains such as BSC, HECO, and Polygon?

Firstly, the entry end: L2 and EVM public chains both share the same wallet address, which can be converted and used through barrier free RPC switching

2/Asset transfer: The most commonly used option for users is centralized exchange transfer, whether L2 or EVM, which is just a network option when withdrawing coins.

Next is the cross chain bridge. Both L2 and EVM have their own official bridges, as well as third-party bridge support. There is little difference in cross chain difficulty between the main L2 and EVM. The biggest difference is that L2 theoretically can unconditionally withdraw assets from the ETH main network, but the cross chain time is longer than EVM. Overall, each has its advantages and disadvantages.

3/Ecological distribution:

If we want to talk about L2 as a different paradigm, for retail investors, you need to do something different from EVM to be persuasive. Let's take a look:

Let's take @ DefiLlama as the top ten for each ecological TVL ranking. Firstly, the order from top to bottom and left to right is BSCARBPOLYGONOP.

4/Come again, top to bottom, left to right: ETH/BASE/ZKSYNC/AVAX

Out of a total of 80 projects in 8 ecosystems, there are up to 32 overlapping projects, accounting for 40%. Among them, UNISWAP, AAVE, and Stargate account for the top 10 of the 5 ecosystems.

In terms of classification, DeFi has three types: DEX, Lending, and cross chain bridges, accounting for nearly 70% of the top ten L2 projects. ZKSYNC is even more outrageous, with all the top 7 being DEX. On the contrary, the BSC senior three only occupy 4 seats, which is relatively unique.

What does this mean? It indicates that both L2 and EVM ecosystems are highly overlapping, and L2 is largely benefiting from ETH liquidity spillover dividends. What can be done in the ETH main chain is to repeatedly build wheels for each L2, which shows the low level of the L2 moat.

For end users, since the function is the same, there is no difference between L2, BSC, or even ETH itself.

Does it look like a physical therapy device being promoted to your elderly family? A regular foot wash basin that sells for 5000 yuan is the same thing as a regular foot wash basin that sells for over 100 yuan.

6/You mentioned the security of L2 sharing ETH, but of course you don't deny it. But so far, there has been no L1 fund security accident caused by the consensus mechanism, regardless of whether EVM has experienced it or not. The accidents are all caused by bridges. How do you use this argument for pajama retail investors?

Excluding the technical narrative, is L2 really like @ AndreCronjeTech saying, which is a bridge with a side chain attached, just to compete for ETH's liquidity?

Buying a bridge with a valuation of billions, how can everyone not be disappointed.

7/Talking about the Way to Break L2's Game? Firstly, we should first re understand the logic of the ether economy.

As an inflation mechanism, Ethereum has survived to this day, largely because of the emergence of projects in the ICO era. These targets raised funds with ETH, leading to the successful transformation and splitting of ETH. A large number of targets shared the foam, giving Ethereum enough time to make new offers, or according to the official, to build infrastructure, so as to curb the pressure of Ethereum by various means and form a control panel.

8/

For example, the term 'expansion' and 'composability' we often hear means allowing Ethereum to continuously expand the number of new drives initiated and operated simultaneously, while unit costs continue to decrease. DeFi and POW to POS essentially share the same goal from the official perspective of Ethereum. The original intention of L2 is to accelerate and expand its economic boundaries without changing the ETH standard, thereby achieving ETH deflation. However, in a bear market, L2 exacerbates liquidity fragmentation and has few breakthroughs

9/

The Ethereum core group is aware of the backfire of L2, which will inevitably limit the development of new L2. As is well known, the liquidity distribution of Ethereum is positively correlated with the distance from the project narrative to the Ethereum roadmap. The more "orthodox" you are, the more money you can get from the ETH core circle, and vice versa. This also explains why using another DA's Rollup was kicked out of L2BEAT, and ZKSync urgently shouted Layer3. Both Polygon and Celestia know the fate of their former comrades turning into heretics.

Therefore, for non OP and ZKSync L2, in terms of benefits, the future will only be more marginalized and excluded. It is not meaningful to talk about ecological construction outside of one's own ecological niche reality. Simply relying on grants can only bring about nomadic teams deployed in multiple chains. It is better to focus on replicating the success of the Ethereum ICO era than internal corruption, forming alliances with the Old Sickle team, and personally leading a few flagship products. On this point, I agree with @ JinzhouLin boss

11/But let me mention one more step: the ecological side personally takes the market making effect and turns a 5 million U ecological grant into an equivalent hot money fund, which is enough to boost and revitalize any low liquidity target market, encourage the issuance of imitations and local dogs, and allow a large number of targets to emerge quickly. It doesn't matter if there is a "rag", let alone the bullshit of "exacerbating liquidity fragmentation" - that's the reverse effect. Liquidity is never homogeneous, it flows from places with low ROI to high places.

12/Finally, user consensus is always greater than technical language - with FT, who careBASE uses what roll up. The L2 ecological construction stage is no longer about toVCcx, but about maximizing individual consensus. Those who have gained consensus among retail investors have obtained dev, VC, and BTC application products, but why are they so popular? That's why. You cannot replicate the BTC consensus, but you can choose not to offend the market and start by not offending the Mao Studio. If you want to send an air drop, send it generously

13/Here, I will name and praise @ LineaBuild for its clear air drop and price tag, as well as for the casino's large reward ecological project, where both Rain and Dew are involved. A group of real talents work with the potential of ARB back then. That's better than a bunch of PUAs. The ecological core team's understanding of why users bring money should be the top priority for every dev team in choosing an ecosystem. This is the lesson we learned in exchange for huge time costs.