Thoughts on Competition between L2 and Solana

Some L2 projects overly mimic the DeFi model of Ethereum L1, leading to path dependency issues. However, L2 has its unique characteristics and should pave new paths suitable for high-performance application needs. What the market truly needs is a brand new development direction for L2, rather than a simple copy of Ethereum.

High-frequency applications are a direction worth exploring. The efforts of a certain public blockchain in the DePIN field are a great example. Repeating old paths lacks explosiveness, while this public blockchain ecosystem has a good grasp of this. Of course, this is also related to certain joint investment institutions. But ultimately, new attempts have brought new narratives, which in turn ignite the market.

For mainstream L2 projects, how can they compete with this public chain? The primary task is not to focus on replicating Ethereum L1 DeFi. While this is important, it is not a breakthrough solution. The key is to open up new narratives and find breakthroughs in areas like Web3 gaming, AI, and DePIN. It is also hoped that developers will not create old wheels, but rather strive to open up new battlefields. As a second option, developing DePIN vigorously is also a viable direction.

In addition, these L2 projects also need to direct valuable economic support ( tokens ) towards projects and developers in new sectors. The L2 ecosystem has a late-mover advantage in token economics and can completely design ecological incentive plans that are superior to those of previous public chains.

The breakthrough of a certain public chain serves as a good example for these L2 projects, worthy of learning rather than underestimating. If several blockbuster applications emerge in areas such as Web3 gaming, AI, or DePIN after the Cancun upgrade in the first half of next year, the situation may change.

The real competition between these L2 projects and the public chain may officially begin in the second half of next year, and who will emerge victorious can basically be seen in the next two years. The cycle is relatively long, and it is still too early to draw a conclusion.

The Ethereum ecosystem should also thank the innovative breakthroughs on other public chains. Without this catfish effect, the Ethereum network might become too complacent. The stimulation from other ecosystems is enough to draw the attention of the Ethereum community. The most important thing is not to underestimate or be hostile, but to learn from the breakthroughs of other ecosystems. Only in this way can we continue to move forward. Ethereum has faced many doubts in history, and I believe in the resilience of Ethereum ecosystem developers and the community.