Polygon Labs CEO Marc Boiron has criticized Layer 3 (L3) networks on the Ethereum blockchain, stating that they are unnecessary for scaling the network and only serve to drain value from the mainnet. Boiron emphasized that Polygon Labs focuses on Layer 2 (L2) scaling networks for Ethereum and does not work on L3s because they do not play a crucial role in scaling existing networks. He argued that L3s exist solely to take value away from Ethereum and onto the L2s they are built on, sparking a debate among industry participants.
While Boiron’s comments have stirred controversy, some have disagreed with his stance on L3 networks. One respondent pointed out that L2s on Ethereum are valuable to the network, arguing that there is no such thing as “taking value away from Ethereum and onto the L2s.” Boiron responded by explaining that if all L3s settled on one L2, Ethereum would capture little to no value, putting Ethereum’s security at risk. He clarified that Polygon does not oppose the development of L3s on other networks but aims to scale Ethereum while ensuring fair value distribution between Polygon and Ethereum.
Layer 3 protocols are designed to operate on top of L2s and provide decentralized applications with enhanced scaling, performance, interoperability, customization, and cost-efficiency. The L3 ecosystem includes various solutions from L2 networks such as Orbs, Xai, zkSync Hyperchains, and the recently launched Degen Chain on Arbitrum Orbit. However, the L3 sector remains relatively small, with only four L3 tokens listed on CoinGecko. Supporters of L3 networks highlighted benefits such as low-cost native bridging from L2, cost-effective on-chain proofs, custom gas tokens, and specialized state transition functions.
Amid the debate over L3 networks, the recent launch of Degen Chain on Arbitrum Orbit has gained momentum. Introduced by infrastructure provider Syndicate, Degen Chain is a specialized ultra-low-cost network designed for the Degen token ($DEGEN) and functions as a Layer 3 network. Early adopters of Degen have witnessed significant profits, with one trader turning a small investment of less than $7,000 into over $2 million in profits. The ecosystem on Degen Chain includes additional meme coins denominated in $DEGEN, generating tens of millions of dollars in trading volume.
The community remains divided on the role and importance of L3 networks on the Ethereum blockchain, with some arguing that they provide compelling advantages without depleting Ethereum’s value. Supporters of L3 networks see them as crucial for enabling L2 networks to become settlement layers and leveraging Ethereum as a global ordering service and final judge of settlement. Despite differing opinions, the development and adoption of L3 networks continue to evolve, with new solutions emerging to address scalability and performance challenges in the blockchain ecosystem.
As the debate surrounding L3 networks continues, industry experts and stakeholders are exploring the potential impact and benefits of these protocols on the broader Ethereum network. While some believe that L3 networks have advantages that can enhance scalability and interoperability, others like Polygon Labs CEO Marc Boiron caution against the potential risks of draining value from Ethereum and onto L2 networks. The ongoing evolution of Layer 3 solutions and the emergence of networks like Degen Chain demonstrate the complexity and diversity of approaches in the blockchain space, highlighting the need for ongoing discussion and collaboration to drive innovation and growth.
