The launch of Degen, a layer 3 on the Ethereum blockchain, has made a big splash with impressive performance on its 1st day. However, Marc Boiron, CEO of Polygon Labs, expressed doubts about the relevance of these layer 3 solutions. In his view, these new layers could not only hijack Ethereum’s value, but also compromise its security.
Marc Boiron criticizes layer 3s in reaction to Degen’s success
Degen is a blockchain dedicated to the transfer of DEGEN, a community token exchanged by users of Farcaster, a Web3 social network running on Base. The latter is a 2nd infrastructure layer (layer 2) on Ethereum, making Degen a 3rd layer blockchain (layer 3) above Ethereum.
Launched on March 28, 2024, Degen was an immediate success, with $1 million transferred to the blockchain and over 24,000 active users on its first day. In the last 24 hours, it has recorded a trading volume in excess of $80 million.
At the same time, the price of the DEGEN token has risen by more than 500%, from $0.01 on the day of the blockchain’s launch to $0.05 today.
In reaction, Marc Boiron, CEO of Polygon Labs, the company behind the Polygon blockchain (MATIC), shared in a post on the X network his dissatisfaction with the relevance of layer 3 on Ethereum.
I’ll say the quiet part out loud: L3s exist only to take value away from Ethereum and onto the L2s on which the L3s are built.
*You do not need L3s to scale*
And this is why Polygon Labs does not work on L3s.
– Marc Boiron (@0xMarcB) March 31, 2024
“I’m going to say out loud what everyone else is thinking out loud: L3s only exist to divert Ethereum’s value to the L2s on which L3s are built. *You don’t need L3s for scaling* And that’s why Polygon Labs isn’t working on L3s. “
Here, Marc Boiron explains that Ethereum doesn’t need layer 3 to enable the blockchain to support wider adoption. In particular, he believes that layer 3 activity gives value to the underlying infrastructure, the Base blockchain in Degen’s case, but not to the core blockchain, Ethereum.
Could layer 2 be enough to accommodate mass adoption?
According to Marc Boiron, shifting value from Ethereum to layer 2 is detrimental to its security and, by extension, to the security of the entire ecosystem.
In a response to a comment, Marc presented an extreme scenario where all layer 3s could rest on a single layer 2, thus decreasing activity on Ethereum. This would reduce the transaction fees collected by the network, consequently affecting its security.
The concerns raised by Marc Boiron highlight a risk that could materialize if activity were concentrated solely on a few layer 3s. However, this scenario is unlikely in a context where Ethereum adoption continues to grow, there is a greater chance that network activity will be distributed across all infrastructure layers.
What’s more, the ability of certain Ethereum layer 2s to handle mass adoption raises questions. These blockchains have repeatedly experienced scalability problems, particularly during periods of high demand for on-chain subscriptions. The creation of layer 3s dedicated to certain applications could help prevent such problems in the future.
