According to PANews, the recent launch of proprietary chains by companies like Strip, Circle, and Tether has sparked discussions about its impact on Ethereum's layer 2 solutions and the main network.
For the second layer of Ethereum, these developments represent a significant challenge. While second-layer solutions focus on enhancing security by inheriting the security features of the main network, they may overlook the fundamental needs of key clients such as Stripe, Circle, and Tether. These clients prioritize complete control from minting to settlement at the expense of decentralized security. The financial benefits of serial revenues, MEV, and gas fees are substantial, and there is little incentive to share these with second-layer solutions. Additionally, proprietary chains provide a faster and more efficient way to handle regulatory inquiries and compliance issues, allowing for better alignment with risk control requirements in the traditional financial sector. This shift undermines the second-layer strategy to attract real users and transaction volumes through stablecoins and RWA assets, as issuers completely surpass them. Ironically, the more technically traditional second layer becomes, the less commercially attractive it is, as these innovations do not address the vulnerabilities of stablecoin issuers.
Regarding Ethereum's main network, the impact depends on the perspective. The creation of private chains by stablecoin giants lays the foundation for an efficient payment settlement layer, enhancing Ethereum's role as a global financial settlement layer. While these chains improve productivity and payment latency from point to point, they lack true interoperability. Complex financial operations involving atomic transactions and composability require what can only be achieved through Ethereum's unified state machine.
The secret of innovation in the decentralized finance derivatives market lies in aggregating liquidity without the need for permission. Innovations like the Hook mechanism in Uniswap V4, risk management through pools in Aave, and the synthetic asset model in GMX rely on access to diverse liquidity sources, which closed stablecoin chains cannot provide. Therefore, Ethereum will ultimately play a dual role: acting as a neutral settlement layer among proprietary chains, akin to the clearing function in SWIFT, and as a foundational layer for decentralized finance innovation, enabling the aggregation of complex financial products.
