Impact of Proprietary Chains on Ethereum's Layer 2 and Mainnet
According to PANews, the recent launch of proprietary chains by companies like Strip, Circle, and Tether has sparked discussions about their impact on Ethereum's Layer 2 solutions and the mainnet.
For Ethereum's Layer 2, these developments present a significant challenge. While Layer 2 solutions focus on enhancing security by inheriting the mainnet's security features, they may overlook the core needs of major clients like Strip, Circle, and Tether. These clients prioritize full-stack control from minting to settlement over decentralized security. The financial benefits of sequencer revenue, MEV, and gas fees are substantial, and there is little incentive to share these with Layer 2 solutions. Additionally, proprietary chains offer a faster and more efficient way to address regulatory inquiries and compliance issues, aligning better with traditional finance's risk control requirements. This shift undermines Layer 2's strategy of attracting real users and transaction volumes through stablecoins and RWA assets, as issuers bypass them entirely. Ironically, the more technically 'orthodox' Layer 2 becomes, the less commercially appealing it is, as these innovations do not address the pain points of stablecoin issuers.
Regarding Ethereum's mainnet, the impact depends on the perspective. The creation of proprietary chains by stablecoin giants essentially establishes an efficient payment settlement layer, reinforcing Ethereum's role as a global financial settlement layer. While these chains optimize throughput and latency for point-to-point payments, they lack true interoperability. Complex financial operations involving cross-asset transactions require atomicity and composability, achievable only within Ethereum's unified state machine.
The key to innovation in the DeFi derivatives market lies in permissionless liquidity aggregation. Innovations like Uniswap V4's Hook mechanism, Aave's cross-pool risk management, and GMX's synthetic asset model rely on access to diverse liquidity sources, which closed stablecoin chains cannot provide. Consequently, Ethereum will ultimately serve a dual role: acting as a neutral settlement layer between proprietary chains, akin to SWIFT's clearing function, and as a foundational layer for DeFi innovation, offering composability for complex financial products.