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The rapid expansion of layer-2 (L2) solutions, fueled by {Ethereum} (ETH) Dencun upgrade, has led to a proliferation of new blockchain projects, with 73 currently listed and 82 more in development. Despite this surge, industry experts are expressing concerns about the long-term viability of such a high volume of layer-2 solutions.
Adrian Brink, co-founder and CEO of Anoma, suggests that the current number of L2s far exceeds the industry’s needs, estimating that only a fraction of these solutions are necessary. He argues that while there is a strong push for new infrastructure, there is a significant gap in user-focused applications to drive meaningful adoption. "We need to find applications to run on all these things, and this is the bigger challenge," Brink stated.
Similarly, Italio Dervoed, CEO and co-founder of Composability Labs, shares concerns about the potential negative effects of the excessive number of L2 solutions. He warns that an overabundance of L2s may lead to reduced interoperability and could ultimately harm the broader crypto ecosystem. Dervoed notes that the current proliferation of L2s reflects a trend driven more by hype than by genuine demand for new infrastructure.
The potential pitfalls of incentivized airdrop campaigns also raise concerns. For example, LayerZero's issuance of its ZRO token in June, following a Sybil attack to create duplicate accounts, highlighted that many participants lacked genuine interest in the long-term success of the project. This resulted in a 17% drop in the token price after its issuance. Brink argues that airdrop farming and similar strategies may not be sustainable in the long run.
On the other hand, some experts believe there is room for a diverse range of L2 solutions if they address unique needs and applications. Elena Sinelnikova, co-founder of Metis, emphasizes that each L2 project can succeed if it maintains a clear vision and offers distinct features, such as decentralized sequencers.
The ongoing debate suggests that while the growth of L2s presents opportunities, success will likely depend on their ability to deliver tangible use cases and avoid becoming redundant in the rapidly evolving blockchain landscape.
