Layer-3s are a necessary innovation in crypto

The next is a visitor submit from Rob Viglione, CEO at Horizen Labs.

If we had stopped at dial-up web, we’d by no means have gotten Netflix, real-time gaming, or cloud computing. The evolution of web infrastructure paved the way in which for mass adoption. In the identical manner, Layer-3s are an inevitable evolution of blockchain infrastructure—eradicating friction, reducing prices, and making blockchain really prepared for mainstream customers. But, critics proceed to argue that they add pointless complexity.

This debate concerning the position of Layer-3s is an lively one for us at Horizen Labs. The Horizen DAO has not too long ago handed a vote to hitch the Base ecosystem, a pivotal governance resolution that marks the start of Horizen’s transition to Base, Coinbase’s Layer 2 community, as an appchain specialised in privacy-preserving functions. We’re satisfied by the Layer-3 thesis and imagine that Layer 3s characterize the subsequent evolution in blockchain scalability.

Horizen’s transfer to Base isn’t nearly following traits, it’s about recognizing {that a} extra modular, interoperable blockchain stack is the important thing to driving real-world adoption. We’re not simply theorizing; we’re constructing.

The Historical past

For crypto to achieve a billion customers, transactions should be quick, low-cost, and seamless. Layer-3s aren’t an instructional train—they’re a sensible response to the truth that even Layer-2s aren’t low-cost sufficient for mass adoption. Layer-3s additionally optimize for particular options that aren’t presently potential on Layer-1s and Layer-2s—resembling enhanced ZK capabilities.

Essentially, Layer-3s handle a core drawback: If Ethereum (Layer-1) is pricey, Layer-2s assist by processing transactions off-chain and solely committing last state proofs to Layer-1. Layer-3s take this additional by selecting Layer-2s as a substitute of instantly on Ethereum, making a hierarchical mannequin that minimizes prices at every stage.

Layer-3s emerged naturally as blockchain architects sought better efficiencies. StarkWare first outlined the idea in late 2021 below the time period “fractal scaling.” Vitalik Buterin explored Layer-3 designs in 2022, suggesting specialised functions past easy scaling. By 2023, main Ethereum scaling groups started implementing Layer-3 frameworks. Arbitrum launched Orbit for launching Layer-3 “Orbit chains.” Matter Labs launched ZK Stack for constructing zk-rollups as both Layer-2s or Layer-3s. These developments have pushed Layer-3s from concept to observe.

Not Everybody Is a Fan

Critics argue a number of factors in opposition to Layer-3s: many imagine Layer-2 options haven’t reached full maturity but, and making Layer-3s is untimely. Some argue Layer-3s add complexity. However nice expertise is about making complexity invisible to customers—similar to the web did. Some view Layer-3s as redundant, arguing their targets may very well be achieved by optimizing Layer-2 options.

Nonetheless, an important realization is rising that makes Layer-3s much more well timed: even Layer-2s, constructed to allow quicker, cheaper transactions, would possibly nonetheless fall quick.

In some circumstances, a Layer-3 can summary prices even additional, guaranteeing near-zero fuel charges. This price abstraction is important. Blockchain adoption requires transactions which are almost free to the tip person, and Layer-3s present exactly this functionality.

That brings a chain-abstracted future nearer. In the end, that’s higher for onboarding new customers, higher for liquidity, and higher for incentivizing the constructing of latest dApps onchain. When customers can transact with out worrying about fuel charges, adoption accelerates. Builders can construct functions that wouldn’t be economically viable on higher-fee networks, and liquidity flows extra freely when not constrained by transaction prices. Your entire ecosystem advantages.

However abstraction isn’t nearly price financial savings; it’s additionally about usability and customization.

Customization and Connectivity

Layer-3s are additionally a pure response to the worry of ecosystem isolation. Chains don’t wish to be siloed. Standalone Layer-1 blockchains face important challenges: they need to bootstrap their very own safety, appeal to customers from scratch, and construct a wholly new infrastructure. Many “Ethereum killers” like Cardano, Fantom, or Tezos have found how tough this journey might be.

Layer-3s supply an alternate path the place chains can stay related to established ecosystems whereas offering higher customization choices: that is the place their true potential lies. Software-specific chains can optimize for his or her distinctive use circumstances, whether or not it’s zero-knowledge proofs, gaming, DeFi, social networks, or enterprise functions. They will implement customized digital machines, consensus mechanisms, or privateness options tailor-made to their wants, all whereas staying related to the broader ecosystem, benefiting from its liquidity and safety.

This mix of customization and connectivity makes these application-specific apps excel at what they do, finally benefiting the tip customers.

A Pathway to Abstraction

Individuals could declare that Layer-3s make web3 too sophisticated, however there’s a great likelihood that it may clear up its personal drawback. The complexity can be invisible to finish customers if applied accurately.

Fashionable dApps can summary away the underlying layers by good pockets designs and intuitive interfaces. Customers needn’t know which layer they’re transacting on any greater than web customers want to know TCP/IP protocols. They merely expertise quicker, cheaper transactions, and higher merchandise.

This pure evolution in blockchain structure is a optimistic step. Layer-3s stability sovereignty with interoperability. They maximize price effectivity with out sacrificing safety. They permit specialised optimization whereas sustaining ecosystem connections. These aren’t simply nice-to-have options. They’re important for blockchains to realize mainstream adoption.

The web didn’t take off as a result of customers understood packet-switching or HTTP protocols. It took off as a result of it simply labored. Layer-3s convey us nearer to a blockchain world that ‘simply works’—seamless, quick, and cost-effective. And that’s how crypto wins.