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Polygon Labs CEO Condemns Ethereum Layer 3 Networks Amid Surge in Meme Coin Trading

Marc Boiron, CEO of Polygon Labs, has criticized Layer 3 (L3) networks on the Ethereum blockchain, contending that they are superfluous for scaling the network and primarily function to deplete value from the mainnet.

In a recent article on X, Boiron conveyed his doubts regarding L3 networks, asserting that Polygon Labs, a prominent Layer 2 (L2) scaling solution for Ethereum, does not operate on L3s because they are not indispensable for scaling existing networks.

He argued, “L3s are solely designed to siphon value away from Ethereum and onto the L2s upon which they are constructed.”

Community Divided on L3s

Boiron’s remarks have sparked a lively discussion within the industry, with one participant asserting that while Layer 2 solutions on Ethereum are beneficial, the concept of “taking value away from Ethereum and onto the L2s” is flawed.

“I disagree that L2 value is Ethereum value,” Boiron countered. “Consider the extreme scenario: if all Layer 3 settlements converged onto one Layer 2, Ethereum would essentially lose its value, jeopardizing its security.”

He went on to clarify that while Polygon does not oppose the development of Layer 3s on other networks, including Polygon itself, their primary objective is to scale Ethereum while ensuring equitable value distribution between Polygon and Ethereum.

Layer 3 protocols are engineered to operate atop Layer 2s, offering application-specific decentralized applications enhanced scaling, performance, interoperability, customization, and cost-efficiency.

The L3 landscape encompasses a range of solutions derived from L2 networks, such as Orbs, Xai, zkSync Hyperchains, and the recently introduced Degen Chain on Arbitrum Orbit. Despite burgeoning interest, the L3 sector remains relatively modest, with only four L3 tokens featured on CoinGecko.

Peter Haymond, Offchain Labs’ senior partnership manager, countered Boiron’s assertions by spotlighting the advantages of L3s that do not erode Ethereum’s value. He highlighted benefits such as the economical native bridging from L2, cost-efficient on-chain proofs, customizable gas tokens, and specialized state transition functions.

On a similar note, Patrick McCorry, a researcher at the Arbitrum Foundation, underscored the compelling advantages of L3s, including their capacity to empower L2 networks as settlement layers and harness Ethereum as a global ordering service and ultimate arbiter of settlement.

He remarked, “Surprised by the stance. L3s appear to be a logical choice, particularly when they enable L2 to potentially serve as a settlement layer (thus reducing bridge execution costs) and ultimately rely on Ethereum as a global ordering service and final settlement arbiter.”

L3 Network Degen Chain Gathers Momentum

The discourse surrounding L3 networks coincides with the recent debut of the Degen Chain network. Launched on March 28th, Degen Chain operates on Arbitrum Orbit and was introduced by infrastructure provider Syndicate as a specialized ultra-low-cost network tailored for the Degen token ($DEGEN).

This token has emerged as the favored choice among users of the Farcaster Web3 social media service, which operates on Base, an Ethereum Layer 2 network. Consequently, Degen Chain serves as an L3 network.

It’s noteworthy that early adopters of Degen have witnessed substantial returns on their modest investments. For instance, one trader, initially investing less than $7,000, reaped profits exceeding $2 million.

While accruing wealth through meme coins is not novel in the crypto sphere, the adoption of Degen as one of the pioneering L3 chains to garner significant traction is remarkable. On Degen Chain, an ecosystem of additional meme coins, denominated in $DEGEN, has generated tens of millions of dollars in trading volume.

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I want to save money. Will cryptocurrency work?

Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

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