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Low-2 chains would be the next evolution of blockchain scalability, and in some respects they delivered themselves. They made transactions faster and cheaper, helped to scale up projects quickly and gave Ethereum (ETH) space to breathe in the midst of an increase in network activity. But while the dust covers, an uncomfortable truth is difficult to ignore: L2s do not retain the value they generate. Instead, they leak it back to the mother chain, back to the liquidity hubs and back to administrative structures that were never really theirs in the beginning.
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This may not have been a problem in 2021, when projects race to reach speed and scale above everything else. But we are now in a different cycle and the number of projects that compete for users has increased exponentially. Projects must now think in the long term. They optimize for sustainability, sovereignty and coordination. And increasingly they turn to app-specific “appchain” layer 1s-not as a novelty, but as a necessity.
L2S: fast, cheap and economic hollow
Let’s call it the way it is: L2s are electric environments. They inherit security, arrange transactions and rely on Ethereum (or any other L1) to complete everything that matters. That dependence has economic consequences.
Every time a transaction is processed on an L2, it is eventually rolled up and established on the L1. The result? Costs flow back to Ethereum. Data availability costs flow back to Ethereum. MEV value – also upstream. It is a one -way transfer of value, from the economy of the L2 back to the L1 that it protects it. If you build a project on an L2, you are not a compound value in your own ecosystem – you subsidize that of someone else.
Although these costs may seem trivial – after all, they are only a small percent of the network’s turnover – they count quickly, endlessly the liquidity runs away. For every project that tries to scale up, these persistent overhead costs can seriously limit growth and sustainability in the long term.
Although these reimbursements can seem smaller – only a small fraction of the total income – they quickly collect, quietly draining the liquidity of the ecosystem. Over time, the costs of the availability of data and repairing layers become considerable. For every project that approaches the scale, these persistent overhead costs can seriously limit growth and sustainability in the long term.
And it does not stop with costs. Liquidity and governance are also rooted in the mother chain. Most Defi protocols still rely on liquidity pools and bridges based on the Ethereum Meminnet. Token holders often stuck or vote in training with systems that are built upstream. Even when L2’s have their own tokens, they are often structurally connected to the economic and political dynamics of Ethereum.
In other words: L2s give your speed, but they take away your independence and slowly drain your token economy of resources.
Appchain L1S: keep the value you make
Appchains, on the other hand, have been built to retain the value they generate. When you start your own sovereign chain, you will not settle elsewhere. You do not take any costs or depending on the validator set of another network. The economic activity that you generate – transaction costs, rewards, mev, administrative power – it all remains locally.
That creates a fundamentally different growth model. Instead of value that flows from your ecosystem, it is internal. Your token records more usefulness. Your community has a direct interest in the success of your chain. Your infrastructure becomes a motor for growth, not a cost center that feeds the economy of another chain.
You will also receive a full Stack operating element, no longer tied to the limitations of a parent chain. Do you want to set adjusted validator unintcentives? Go for it. Do you want to experiment with gasless transactions or dynamic tokenomics? Do it. With L1S you can build infrastructure that matches the needs of your application, not the other way around.
But what about fragmentation?
For years, the biggest knock against AppChains was that they would create insulated ecosystems. That criticism used to hold weight, but no more.
Thanks to interoperability solutions such as Layerzero, Avalanche Warp Messaging and IBC, we now have reliable ways to relocate data and assets about chains. AppChains can connect to wider ecosystems and yet retain their sovereignty. They can be connected and independent – no longer forced to choose between integration and control.
The fragmentation argument is outdated. In practice, AppChains becomes a natural expansion of the Multichain world, and the tooling around them improves rapidly.
The market is going
More and more projects are choosing to follow the Appchain route and the trend keeps getting steam. Builders want autonomy, they want economic sustainability, and they want the freedom to design their infrastructure around their users, not around Ethereum’s bottlenecks.
That does not mean that L2S leaves. They are a decent starting point for many projects at an early stage. But they are not built for scale. They are not designed to retain value. And they are absolutely not built for projects that want sovereignty about their infrastructure and their economy.
If you try to build something sustainable – something that is not only fast and cheap, but aligned, sovereign and sustainable – you should not settle for a layer of 2. You should think as an ecosystem manager. You should possess your pile. You must be committed to building a chain that meets your own custom needs, without transferring sources.
An L2 spinning may seem like the simplest go-to-market strategy, which discharges responsibilities, so that you can get on the market faster, but investing in L1 infrastructure is one crucial Get to long -term success. It didn’t take long, every project will race to build its own appchain.
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Steven Gates
Steven Gates Is the founder of Hypha, an extensive platform for launching block chains, making it easy to configure a Validator License sales.