Andre Cronje, co-founder and architect of Sonic (formerly Fantom), has cautioned developers against using appchains—customized second-layer networks for specific dapp.
Why L2s as appchains are not logical for builders:
— Barely any infra when deploying (stable coins, oracles, institutional custody, etc)
— No foundation/labs to help support
— Centralised and open to attack
— Fragmenting liquidity and forcing it onto bridges
— No community of…— Andre Cronje (@AndreCronjeTech) October 13, 2024
The founder of the DeFi project yEarn Finance described such protocols as “illogical” and listed several issues that warrant their avoidance.
According to him, they lack the necessary infrastructure for launching stablecoins, oracles, institutional custody, and more. Meanwhile, the cost of these services is often underestimated.
Cronje noted that the Sonic team spent $14 million in 2024 alone on such expenses, as well as explorers, exchange access, tool stacks, cross-chain bridges, compliance solutions, and other services. These are mostly regular expenses, he added.
In this regard, Cronje supported Gabriel Gareth Fu from Mantle.
Agreed, many fail to realize that infra is the single most expensive recurring cost for any L2, which is oftentimes taken for granted.
— Gabe (@0xGabe_) October 13, 2024
“Agreed, many do not understand that infrastructure is the most expensive regular cost for any L2 protocol, which is often taken for granted,” wrote the DeFi development team lead.
Cronje added that service providers refuse to work with L2 appchains or prioritize them lowly, leading to unjustified time losses.
Among other drawbacks of such solutions, the expert listed:
- lack of support and community, both users and developers;
- fragmentation of liquidity or forced distribution across bridges;
- centralized nature and vulnerability to attacks;
- necessity to build the project alone and lack of network effects.
Polygon Labs CEO Marc Boiron countered Cronje, stating that most of the difficulties he mentioned are solvable. According to him, the AggLayer aggregation level from Polygon is suitable for organizing interaction, managing liquidity flows, and building a community.
Most of these things can be solved:
— Create an interop solution that includes native infra for all connecting chains (as will be the case with the AggLayer).
— Create a culture around an interop solution of helping others so the tide lifts all boats. Polygon Labs is the first…— Marc Boiron (@0xMarcB) October 13, 2024
Hilmar Orth, founder of Gelato Network, also presented counterarguments to Cronje’s points on almost all counts except one. He agreed that “building will have to be done alone” since applications are competitors—”that’s the reality.”
disagree.
— Barely any infra when deploying (stable coins, oracles, institutional custody, etc)
=> you get most of those one-click on Gelato RaaS
— No foundation/labs to help support
=> actually you get a lot of support by RaaS providers and framework teams
— Centralised…
— Hilmar | ser.eth (@hilmarxo) October 13, 2024
Earlier in October, the largest DEX by trading volume, Uniswap, announced the launch of its own L2 solution. According to analysts, this could bring the platform and UNI token holders up to $500 million in additional annual revenue.