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We learned this week that Stripe and Circle are planning to launch their own L1 chains.
Ethereum members of the community quickly wondered why companies should not launch L2S instead.
Ethan Buchman has a simple explanation: vertical integration is profitable.
Christian Catalini from Lightspark reflects this image in Forbes:
“… Stablecoin -emittent have strong stimuli to commodate the rails – by spending on multiple networks and positioning themselves in the center of interoperability opposite them – or to push most activities for a network that they control. Both strategy gives them a chance to conquer massive global fintech leaders and the largest part of the value of the leaders.”
Circle/Stripe just does what is best for them. But that means that these new chains do not contribute to the availability of the availability of Ethereum, which do not increase the bags of ETH token holders.
The team behind Phantom Wallet was confronted with similar questions about the “chain lines” when announcing the integration of hyperliquid cloth.
This is in contrast to a Perps Dex built on Solana such as Drift or Jupiter.
Reasoning from the point of view of chain tribalism is quite standard rate in this industry. But from the perspective of an outsider it is probably a very strange mental model to make decisions. Builders just have to do what is best for business.
Brandon Millman, CEO of Phantom, clearly put it on this week’s Lightspeed podcast:
“In the world of trade and Perps we get the best prices for users? If you only look at the objective figures, price, execution, liquidity … That is all an order of size bigger on hyperliquid. And therefore by completely ignoring that, I think we would have done a pretty big disembrow for users.”
In other words, Hyperliquid processed $ 371 billion in volumes in the last 30 days. Solana’s two largest Perp Dexs, Jupiter and Drift, processed a collective $ 52 billion in the same time.
That is about 7.1x more addressable volume, which should lead to a fairly simple business decision.
From my time to speak with application developers in the industry, most follow a multichain strategy, simply because it is best for business.
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