Why do we need so many L2 networks? 

1/10 - Why do we need so many L2 networks? 🧐 On the moment of writing, DeFiLlama tracks 16 rollup networks, while L2Beat shows 29 active L2 networks, including niche blockchains and other technical solutions. Some of them, like Base, opBNB, and OP Mainnet, are built on the same tech stack and offer similar features. But why does the market have so many "similar" Layer 2 networks? There are a few reasons.

2/10 - Evolution of technology 🌱 The technological foundation of L2 continues to evolve. Developers and the community are still determining the most optimal solution that ensures security, a quality user experience, and efficient transactions. Earlier L2 networks, like ImmutableX, were built on Validium and stored data off-chain. Optimistic Rollups gained widespread adoption thanks to Optimism, which allowed transaction bundling, reducing costs and data accessibility. ZK-Rollups are now actively used, requiring less storage space.

3/10 - The next generation of L2 will likely focus on privacy (e.g., Aztec). Additionally, the transformation of Ethereum itself lies ahead, which will also necessitate adaptation of second-layer networks. New projects are developing their own solutions - more efficient, secure, and technically advanced. The segment is still in its early stage of development.

4/10 - Standardization 🧩 The baseline standard for Ethereum Layer 2 networks is compatibility with the Ethereum Virtual Machine (EVM). This ensures system integrity and creates a unified environment for developers. However, L2 blockchains still have ample opportunities to set their own rules, whether it's the sequencing mechanism, fee structure, or data storage architecture. New L2 networks aim to establish a wide range of standardized parameters, improving compatibility through SDKs. Examples include OP Superchain and Celestia Rollkit.

5/10 - Moreover, developer tools accelerate and lower the cost of building second-layer blockchains, which also stimulates the emergence of new projects. For example, Optimism took 13 months from testnet announcement to mainnet launch, while Base only took six months. All thanks to the OP Stack.

6/10 - Specialization 🎯 Another reason for the proliferation of "similar" L2 blockchains is specialization. Different teams can utilize the same technical solution for their own purposes:

Arbitrum builds a universal network but has become the de facto "home" for DeFi.

Coinbase develops the technical foundation for its ecosystem.

Optimism aims to bridge different blockchains and attract developers.

7/10 - Alongside the evolution of technology and rule standardization, the L2 layer is moving from "universal" blockchains like Arbitrum to more niche-focused ones, such as DYDX V4 Protocol. On one hand, we see more L2 networks targeting different tasks; on the other hand, these networks are gradually standardizing, using shared tech stacks and solutions. Ultimately, truly unnecessary projects will lose liquidity and users, much like most "Ethereum killers" or Bitcoin forks.

8/10 - The presence of multiple L2 networks ultimately promotes innovation and healthy competition, pushing the boundaries of what's possible in terms of scalability and user experience in the decentralized ecosystem. It allows developers and users to choose the solutions that best suit their needs, fostering the growth and maturation of the overall ecosystem.

9/10 - So, while it may seem like there are "too many" L2 networks, they each bring their own unique contributions and play a role in the ongoing development of decentralized finance. With further evolution, standardization, and specialization, the L2 landscape will continue to refine itself, paving the way for a more robust and efficient decentralized future.

10/10 - Remember, diversity and choice are key ingredients in driving innovation, and the multitude of L2 networks showcases the vibrant and dynamic nature of the DeFi ecosystem. Embrace the variety, explore the possibilities, and be prepared for even greater breakthroughs in the L2 space. #DeFi #Layer2 #Innovation