The most eye-catching news this week is that #OKB surged fivefold at once, and the reason is that it launched a Layer2 - XLayer.
Has anyone noticed that the past 'farming' of Layer2 is already a lost cause, and buying tokens has led to doubts about life as prices drop? This track seems odd no matter how you look at it.
Today, I will discuss what has really happened with Layer2 from perspectives of data, technology, and governance mechanisms.
1. Data: The collective Waterloo of Layer2.
Layer2 can be traced back to the launch of StarkEx in 2020, which was indeed a revolutionary product. However, five years down the line, the result is quite bleak.
TVL comparison: At the beginning of last year's bull market, BNB chain had 3.5 billion USD in TVL and ranked first, Arbitrum was second, Solana was third, and Base was just getting started. But now, Solana has surged fivefold, BNB has doubled, and Base has directly increased tenfold. However, Arbitrum has dropped to over 2 billion and has fallen to fourth place. Others like OP, Starknet, and ZKSync are worse off, basically suffering from 'knee cuts' and 'ankle cuts.'
Performance comparison: Theoretically, Layer2 TPS can reach thousands, but in reality, it can't run smoothly. Besides Base and Linea which can reach 100, most are still worse than L1 from a few years ago. Solana can actually run 5000, BNB can also run 500+, while Layer2 truly has the name but lacks the substance.
2. Technology: The awkwardness of centralization.
The core issue of Layer2 lies in the sequencer.
According to V God’s standards, from Stage 0 to Stage 2, the higher you go, the more decentralized it becomes. Unfortunately, the vast majority of projects are stuck at Stage 1, with still centralized sequencers. This kind of 'centralization' is convenient for control; for instance, when ZKSync was hacked for 5 million dollars, they directly rolled back transactions and saved the money.
But the problem is also very obvious - the gap between this and our ideal of decentralization is too large. Even if Base claims to be decentralized, the sequencer is still controlled by insiders, changing the soup but not the medicine.
3. Governance: Poor and stingy.
Layer2 mainly makes money from Gas fees, but almost all the revenue is taken by the development team. Taking Arbitrum as an example, 70% goes into the project's pocket, and only the remaining 30% is distributed to token holders.
In contrast, Ethereum destroys 70% directly and gives 30% to stakers, while Solana and BNB even fully return or destroy to enhance value. Compared to this, Layer2's 'stinginess' is speechless.
4. Future: The structure of the two major leaders has been established.
Although there are many problems, Layer2 is not without opportunities. In the future, there will likely only be two or three general Layer2 left, and I believe the most promising ones are:
Base chain (OP route): Backed by Coinbase, with dual guarantees of compliance and traffic, the TVL has increased tenfold in this bull market, showing significant ecological advantages.
OKX XLayer (ZK route): TVL increased from 5 million to 80 million in a week, with OKB becoming the Gas token while locking the total supply, making its resources and strategies stronger than Coinbase.
In the short term, look at OP, and in the long term, at ZK. Base and XLayer are almost destined to be the leaders of two major camps. The remaining Layer2 either have serious homogenization or are ecological islands, making it difficult to find a turnaround opportunity.
5. Opportunities in segmented tracks.
If the pattern of general Layer2 has been established, then there may still be opportunities in segmented fields. For example, OpenZK chooses to go all-in on RWA (real-world assets), directly connecting with traditional financial institutions. Such precise positioning might carve out a bloody path.
6. My conclusion.
Over the past five years, Layer2 has transformed from a blue ocean into a red sea, ultimately narrowing down to a few leaders. For us ordinary investors, it has become simpler; instead of casting a wide net, we should focus on the head or distinctive segmented tracks for heavy investment. The more brutal the competition, the higher the value of the survivors.
The blue ocean of Layer2 has ended, but the winners’ dividends have just begun.
The market comes in waves; it's easy to get lost when going solo.
If you want to seize the next doubling opportunity, feel free to join my circle and communicate with a group of old friends to bottom-fish together! Let's avoid detours and outperform in the next bull market!
