When Layer 2s Attack: The Hilarious Downfall of Ethereum!

Ah, dear reader, gather ’round as we delve into the curious case of Offchain Labs, those audacious architects of the Ethereum layer-2 network known as Arbitrum. In a most peculiar twist of fate, they have forged an alliance with the Arbitrum Foundation to unveil a new incubator-style program, whimsically dubbed Onchain Labs. One might wonder, is this a noble endeavor or merely a farce? 🤔

As proclaimed in a post dated March 17, this incubator seeks to hastily augment Arbitrum’s existing decentralized application (DApp) offerings, with a particular penchant for supporting “innovative and experimental” projects. Ah, the sweet scent of innovation! Or is it just the smell of desperation? 😏

Offchain Labs, in their infinite wisdom, have declared that their support shall manifest primarily as product and go-to-market advice, while engineering resources remain a distant dream. How generous! And yet, they caution that their venture capital arm, Tandem, may or may not indulge in the purchase of these project tokens in the public markets. A gamble, indeed! 🎲

In their grandiloquent statements, Offchain Labs have boasted of Arbitrum’s evolution into one of the “most performant ecosystems in the space.” But lo! With the advent of Onchain Labs, the focus shall shift to the construction of a veritable application landscape. A landscape, one might say, fraught with peril and uncertainty! 🌪️

“Through Onchain Labs,” they declare, “we’re dedicating resources to support developers looking to rapidly expand the application layer.” A noble cause, indeed! Yet, one cannot help but chuckle at the irony of it all. Will they truly bring forth the best user experiences, or merely a cacophony of chaos? 🎭

“With Offchain Labs’ support, we’re confident we’ll see industry-leading applications that are uniquely possible on Arbitrum.”

But, dear reader, it is not merely about the proliferation of applications. Nay! The firm has proclaimed that they shall only support projects that launch fairly. A commendable stance, one might argue, yet one cannot help but smirk at the notion that the industry’s recent trend toward extractive zero-sum launches “stands in stark contrast to the core ethos of crypto.” Oh, the irony! 😂

They seek to counter this trend by collaborating solely with teams that commit to equitable launches, which they deem “essential for fostering community alignment.” A utopian vision, perhaps? Or merely a pipe dream? 🌈

The rise of layer 2s is creating problems for Ethereum

Arbitrum, once a pioneer among layer 2s (L2s) on Ethereum, now finds itself amidst a veritable explosion of new L2 networks since the Dencun upgrade. According to the oracle known as L2Beat, there are now over 70 layer 2s, with many more lurking in the shadows. This proliferation has birthed a host of issues for Ethereum, as some industry sages have noted. 🧙‍♂️

The first of these woes is the fracturing of the Ethereum ecosystem, as disparate DApps flit about on various layer 2s, some of which may or may not be interoperable. A recipe for disaster, if ever there was one! 🍽️

“We currently have too many,” lamented Vitali Dervoed, co-founder and CEO of Composability Labs. “The more L2s we build, the less interoperability we will have.” A sage observation, indeed! Yet, one cannot help but wonder if developers, in their quest for the next super-fast, low-gas-fee blockchain, are merely sowing the seeds of fragmentation. 🌱

Another conundrum arises as lower-cost layer 2s like Base and Arbitrum feast upon Ethereum’s revenue, gnawing at the very fabric of layer 1’s market cap. A most unfortunate turn of events! 😱

On this very day, Standard Chartered has downgraded its 2025 price target for Ethereum by a staggering 60%, from US$10,000 to a mere US$4,000. Geoff Kendrick, the bank’s head of digital asset research, has ominously proclaimed, “We expect ETH to continue its structural decline.” A foreboding statement,

2025-03-18 05:33

The rise of layer 2s is creating problems for Ethereum

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