A wave of business blockchain networks gathered on the horizon and promises faster Stablecoin payments and smoother adoption. The long-awaited vision of companies that embrace blockchain technology finally seems to take shape, but not in the way many crypto veterans expected.
Payments Giant Stripe, supported by Crypto VC Firm Paradigm, builds its own layer 1 -chain, pace, for global payments, choose to renew the network completely instead of making another layer 2 on Ethereum.
Circle, one of the largest stablecoin emission, also develops its own L1 for its stablecoin, while Google is working on its own chain, although it does not focus on retail users like the other two.
But despite big names behind the initiatives, the decisions have received great criticism from some in the crypto community, who say that operating chains are leaving the open, decentralized vision Bitcoin’s maker Satoshi Nakamoto in mind.
L1 vs L2 Debate
The pace of Stripe and Paradigm distinguishes itself between the business L1s in the sense that the team behind it has made an attempt to present the protocol as a more open, publicly focused network, compared to product -specific chains such as Circle’s Arc or Google’s GCUL. In contrast to competitors, Tempo positions itself as a “neutral platform with regard to stablecoins, so that users can make transfers and pay gas costs in a stablecoin,” said a post of Tempo’s official X account.
Matt Huang, co-founder and managing partner at Paradigm, said in an X-post on 6 September that the plan is to “have permissionless validation and permissionless smart contract implementation”, comparison with Bitcoin, Ethereum and Solana.
Anurag Arjun, co-founder of modular blockchain infrastructure project, as well as a co-founder of Polygon, The Defiant said that the pace should not be viewed purely by the usual L1 versus L2 debate.
“Tempo is both positive and controversial. Because it brings a real transaction flow, possibly billions of payments, in crypto-rails. Controversial because it reflects a very business path: a specially built chain, bootstrapped by a validator set of large institutions, who are asking about decentralization and these aspects would be more, but these aspects are more, but these aspects are more for more, as well as they would be more for its aspects. More operational details are, “explained.
According to Arjun, by moving Fiat to Stablecoins and steering over the rails of pace, Stripe could offer a faster, cheaper settlement worldwide while he remains completely compliant. The co-founder of De Beput has also noted that although there is public attitude to be ‘permissionless’, the chain will first serve business customers and backend needs, making it different from most crypto-native projects.
Arjun told The Defiant:
“Of course there is a public attitude of ‘permissionless’, but in practice this will first serve for the own customers of a company and backend needs. That makes it very different from most crypto-native projects. It is less about chasing token economies or defi-ecosystems, and more about the inclusion of compliance and payment infection.”
‘Antithetic to crypto’
Huang van Paradigm acknowledged that the network will start with a permitted validator set, but said that it will gradually make decentralization, it is a bridge between the adoption of companies and open crypto rails.
But even that bridge still has critics in line. Michael Nadeau of the Defi report called the Move “Antithetical to Crypto”, warning that Stripe wants to “possess the network” and want to move Mastercard and Visa, who also immerse their toes in the crypto space.
‘Stripe looks you straight into the eyes. And you say that they ‘want to possess the network’. They want to move Mastercard and Visa. That is literally what they do.
Omid Malekan, a deputy professor at the Columbia Business School reading lectures on Crypto, it was that Sentiment agrees and wrote on 5 September in an X -post that, in contrast to Bitcoin of Ethereum, are known for operating chains and are legally responsible. Malekan explained:
“In a permitted chain, the protocol is more of a ‘best practice set of recommendations’ than something inviolable. This is a problem because it takes us back to the butt-covered Hel Satoshi. Both the participating validators and the gatekeepers can be held liable because they have the power to violate liveliness, safety and CR.”
The gatekeeper can change the protocol, reverse transactions or stop the chain under regulatory pressure, a scenario that is impossible for permissionless networks, he further implied.
Speaking with the challenging, Eneko Knörr, co-founder of Yield-bearing Stablecoin Project Stabolut, said that the movement of Stripe clearly shows the wish of the company to total control over a blockchain that is specifically built for the payment purposes.
“It is clear that Stripe wanted total control over a blockchain specially designed for their payment purposes, and although their entry is an enormous validation for the crypto industry, the approach of ‘walled garden’ is worrying,” said Knörr.
Although this step validates the crypto industry, the current approach puts the current approach and goes against the ethos of decentralization, Knörr argued, adding that choosing a new L1 instead of an L2 on a public blockchain can be seen “as a voice of no confidence in the current State of Ethereum’s scale.”
Failed attempts
Crypto history is strewn with L1 -Mislukingen from companies. Christian Catalini, who created Meta together with the scales, sees striking parallels and says that the price for this big bargain “simply hands the fintech giant the keys to global payments”. He has framed the business launch as an experiment with high-stakes in combining business control with the rhetoric of neutrality.
“If business chains such as Tempo and Arc succeed, this means that the crypto experiment was not a revolution, but a failed coup. The backend technology would be different, yes, but the market structure would be creepy,” Catalini said in an X -Thread last Friday.
The co-founder of Paradigm admitted that some of the functions of pace are technically possible on an L2, but can be “complex, slow to implement and/or introduce many external dependencies.”
“We are not Bitcoin, Ethereum or Tempo-Maximalists. We are maximalists for permissionless crypto. We want Ethereum L1 to scale and we want L2S to thrive,” Huang added.
‘Public block chains remain the standard’
Jake Chervinsky, former counselor of Crypto Lending Protocol Compound, pointed out to the legal motivations behind companies that build their own L1s, and pointed out that supervisors do not even need permitted validators.
“If you have a great commercial reason to build (or build a product -specific L1), you have it. If not, and you will just worry about compliance issues, decentralized public block chains De Standaard,” he wrote in a post of 5 x.
That tension between company use and crypto principles defines the debate. Sandep Nailwal, co-founder and CEO of Polygon Labs, suggested connecting business chains with Multichain-Frameworks, so that companies can remain sovereign and at the same time share interoperability.
“Stripe says that pace is open to everyone and PayPal could use it if they wanted, but in reality PayPal would rather launch their own chain,” Nailwal be in an X -post Monday.
The defenders of Tempo claim that adoption pressure will justify some centralization in the launch. Huang emphasized that Real-World partners may need a network where validators and finality can be trusted. But critics show that the introduction of gatekeepers the resistance of neutrality and censorship erodes that makes crypto unique.
In response to the request of the challenging comment, a paradigm spokesperson dealt with the challenging to Huang’s the above X-post. Stripe did not respond to the request of the challenge to confess over time.
The controversy reflects a wider pattern. When companies try to control blockchain infrastructure, the community responds. Stripe, paradigm, circle, Google and others bet that predictable infrastructure will bring scale, but the cryptom community is ensuring that the regulations and liability will bring.
Malekan from Columbia Business School says that business chains inevitably end under heavy control, warning that because they are run by careful professionals with lawyers, “they will censor. They will reverse the chain if something bad happens. They will even stop if the government forces them.”